Anonymous said...
INTERAL CONTROL ISSUE.
As others has mentioned before in this blog, The key to prevent any similar accidents and controversy we currently facing is to improve the internal control and “Check and Balance” mechanism within NWSC organization. NWSC need to revise its by-law and financial guidelines to better protect its assets, assist in its proper management and prevent potential abuse of power or corruption by any individuals. With this goal in mind, I hope the new BOD will consider setting up and implementing some of following financial control measures to monitor and record assets received, held and expended.
These financial controls should be described in an accounting policies and procedures manual. The manual should be reviewed with and given to all directors and Administrative staffs, employees and volunteers. It may include procedures for:
º Preparing an annual income and expense budget and periodic reports – at least each semester preferably monthly - comparing actual receipts and expenditures to the budget with timely variance explanations.
º Writing and signing checks or vouchers and receiving, recording, securing and depositing cash and other receipts. Such procedures should ensure that no single individual is responsible for receiving, recording and depositing funds or writing and signing checks.
º Ensuring that tuitions, fees and contributions received are properly recorded, accountings required as a condition of any contribution are completed and restrictions on the use of such funds, such as contributions given for a restricted purpose (e.g. scholarships, classroom funds), are obeyed.
º Requisitioning, authorizing, verifying, recording and monitoring all expenditures,
including payment of invoices, petty cash and other expenditures. Such procedures should ensure that no single individual is permitted to request, authorize, verify and record expenditures. For example, the same person should not be responsible for cash disbursements and bank reconciliations. These functions should be assigned to different individuals.
ºProviding for regular oversight by an audit committee or, if there is no audit committee, by the board of directors itself.
º Reporting to the audit committee or board by employees and volunteers of allegations of fraud or financial improprieties.
º Ensuring that timely and appropriate financial reports are distributed to all directors and reviewed by them, as well as the president and treasurer.
º Providing procedures for approving contracts to which the organization is a party,including securing competitive bids from vendors.
º Making clear the responsibility of all individuals involved with the organization, including the board of directors, employees, volunteers and consultants, maintaining an organizational chart and updating such information as necessary.
º Developing a prudent investment strategy and providing proper oversight of the investment assets. i.e CDs.
º Complying with governmental and other reporting requirements, including watchdog agencies.
º Complying with obligations to members, employees and the public, including their right to view NWSC's tax return.
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June 12, 2007 8:26 PM
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If we will have to take care of the root problem for sure.
INTERNAL CONTROL ISSUE--CONTINUED
In addition to financial control discussed yesterday, other aspects listed below need to be addressed also:
--- Various Roles in the NWCS
There should be written job descriptions for BOD, present, staffs and volunteers. The work of NWCS will be more easily accomplished and problems will be avoided if all involved understand what is expected of them and the limits of their authority.
A comprehensive description of the president’s job should make clear his or her responsibilities in the day-to-day activities of the school and set forth exactly what information is expected by the board and when it must be communicated. For example, if the board expects monthly or quarterly financial reports and programmatic reports, making those expectations clear from the beginning will avoid ambiguity and will clarify the responsibility for accountability to the board.
Similarly, teachers and staffs should have written job descriptions and be advised of what is expected of them. PTA and its volunteers are no exception. The role of PTA need to be clearly defined and its volunteer members should be given job descriptions that clearly describe what is expected of them. Volunteers are indispensable part of NWCS’s function and their hard works are really appreciated. However, if any of them do not understand his or her responsibilities or do not act professionally, the school could be at risk too.
--- Personnel Policies and Training
Personnel policies for teachers and admin staffs, including benefits, evaluations, ordinary and bonus compensation, conflicts of interest and code of ethics, and grievance procedures (including protections for “whistle blowers”) should be in writing and given to all employees prior to hiring, with changes in policies communicated on a regular basis. (My uderstanding is that NWCS already have employee handbook, I would assume it already covered what is discussed above.) As Appropriate training should be arranged for all involved. New directors, officers, employees and volunteers should be trained by those who are familiar with the school operations. For all involved, familiarity with the school’s internal controls is essential.
--- Conflicts of Interest Policies and Code of Ethics
BOD, Presidents and other key personnel should not have any personal or business interest that may conflict with their responsibilities to NWCS. To avoid such conflicts, it is wise to have a “conflicts of interest policy” that clearly states the procedures to be followed if a board member’s personal or financial interests may be advanced by an action of the board. The conflicts of interest policy should require an individual to fully disclose any interest the individual and/or the individual’s family has in any entity that does business with the NWCS and that any change in the information concerning potential conflicts should be provided to the BOD immediately. The policy may be set forth in NWCS’s by-laws. The policy must require that such individual may not participate in any decision to approve doing business with the individual or any entity in which the individual has an interest, and such decision must be made by a disinterested majority of BOD. NWCS should also have a code of ethics addressing issues such as transparency, disclosure in fundraising solicitations, and integrity in governance. The BOD may need to consult with professional such as attorneys and auditors prior to adoption of such policies.
All board members, employees, volunteers and others should be given copies of both policies and sign a statement acknowledging that they have read them.
In sum, we DO have lots of devoted BODs, employees and parent volunteeers who really care about our school and have been working dilligently and contributing to the success of NWC. I admire them! Like other parents,I just hope that with better internal control system in place, we can avoid unnecessry conflicts and disputes in the future. Let us united and work together to rebuilt trust, understanding among NWCS community, for the NWCS's noble mission!
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