IBMA is taking steps to implement some of the recommendations noted in the recently released independent audit.
Auditors for Collinsworth, Bright and Co. gave the association a relatively clean bill of health in their review of finances from Jan. 1, 2006, to Dec. 31, 2010. But they did suggest the beefing up of some internal controls and recommended improvements in the way funds were handled.
“We did not see any co-mingling of funds,” the auditors noted in one section of the report. In another they wrote there was no suggestion “that expenses from vendors have [been] systematically shifted between various programs in an effort to cover losses in one sector.”
But, in addressing the need for beefed-up policies for petty cash, the report noted, “It is near impossible to trace cash … six years after the transaction took place, especially with the lack of policies and procedures in place.” And, in another instance, the auditors noted the lack of receipts made accounting for some expenses impossible.
Action has already been taken or is under way on two of the major recommendations spelled out in the document, according to IBMA Executive Director Nancy Cardwell. On a Nov. 8 conference call, the board approved a policy requiring two signatures on any check for more than $5,000.
Also, the board of the IBMA Trust Fund and the IBMA board are working on an agreement to formalize the 50-50 split of Fan Fest profits. The policy, drafted by IBMA board member Dwight Worden, was approved by the Trust Fund board on Nov. 12, and is expected to win approval of the IBMA board during its Dec. 12 videoconference meeting.
Other recommendations by the auditors are still being studied. “Jill Crabtree and I will be going over the rest of the suggestions from the auditors and will provide the Finance Committee with a list of what changes we can realistically make happen, given the size of our staff,” Cardwell told me.
Other recommendations in the report:
- Require two signatures for any check written to petty cash for more than $100, and require that any leftover money be redeposited in the bank.
- Have policies spelling out the delineation of duties so a person collecting cash is not also the person responsible for depositing it. Cardwell said this is already standard practice.
- Spell out details of any arrangements with vendors in a contract. This grew out of a 2007 agreement with The Event Co., which built a scrim for the awards show at a cost of $3,900, and later had possession of the scrim. According to the report, former Executive Director Dan Hays told auditors that The Event Co. was merely storing the scrim because IBMA didn’t have space, and that IBMA owns it, not the company.
- Better procedures for keeping track of tickets to various events. While tickets are numbered, auditors said IBMA doesn’t track the numbers to keep tabs on how many tickets are sold and how many are given away. A better ticket policy will keep track of revenue and “will also prevent a person with access to pre-sold tickets from stealing tickets prior to an event and selling them for profit or giving to unrelated parties free of charge.”
Cardwell said the IBMA board has authorized an audit every year, while the Trust Fund board will submit to an audit every five years.
IBMA members can obtain copies of the audit and recommendations by contacting the IBMA office.
Category: Bluegrass Asociations News
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