Suggested Financial Procedures For School Support Groups
INTERNAL CONTROLS
To start establishing internal controls, you'll need to review your booster club's current financial
procedures. Once you see what's already in place, you'll be able to determine what, if any, additional
financial controls should be added.
When developing appropriate internal controls for your booster club, there are several key areas to
consider:
1. Division of labor. One person should not be responsible for all the money handling. Use
different people to receive and log cash and checks, prepare and make deposits, issue checks,
and reconcile bank accounts. For example, designate someone other than the treasurer to
review bank statements and reconciliations. Have them compare these records with monthly
financial records and review all transactions. Rotate these tasks periodically. If the number of
available individuals makes proper separation of duties impossible, a second person (perhaps
the booster club president) should review financial records.
2. Handling Checks. Each check should be stamped "For Deposit Only" upon its receipt, and
invoices and supporting data should be reviewed before checks are signed. Booster rules should
require two signatures on all checks or on checks above a specified amount. Checks should
never be written for “Cash”. Only pre-numbered checks should be used, and no one should sign
blank checks. Do not permit use of a signature stamp. Booster club officials should review the
documentation for each check prior to signing it, and they should not sign checks without an
invoice, original receipt, or adequate backup. Officials should also attach invoices or receipts to
a duplicate copy of the check issued for payment and review canceled checks and
endorsements. They must account for every check, including voided or canceled checks, and
secure checks, petty cash, and deposits in a locked location.
3. Making Deposits. The person responsible for handling deposits should create a separate deposit
slip for each business day and deposit funds as quickly as possible after receiving them. For
consistency, he or she should compare deposit slips to a daily log of receipts, check them against
monthly bank statements, and retain deposit slips with the log sheets or attach them to monthly
bank statements.
4. Caring for cash. When cash is received, two people should count it and sign reconciliation forms.
Frequently rotate the individuals who count cash. Use a numbered receipt book that provides a
duplicate copy for the booster club's records. Do not permit people who receive or count cash
to create the deposit slip or take the deposit to the bank. Limit access to cash, which obviously
should never be left unattended.
5. Require reporting. A monthly financial report should be generated and presented to the
booster club board of directors and to the athletic administration. Periodic reports should be
given to all booster club members.
6. Audit Annually. The simplest form of audit is a compilation. This includes preparation of
financial statements showing revenues and expenses based upon bank statements, receipts,
and checks.
With a bit more effort, you can conduct a review. In addition to the details stated above, a
review involves an in-depth discussion with those involved in financial transactions along with a
comparison of current and prior years' account activities.
The most comprehensive analysis is an actual audit where, in addition to the items included in a
compilation and review, supporting documentation is examined, confirmation of year-end
account balances is obtained from banks, internal control procedures are reviewed, and the risk
of embezzlement or fraud based upon current internal controls is assessed.
When deciding which type of audit best suits your booster club, consider the level of financial
activity, completeness of available documentation, number of questionable items, and
availability of individuals with whom to review financial records. In general, use a compilation
for annual amounts less than $20,000, a review for $20,000 to $50,000 and an audit for
amounts above $50,000.
ADDITIONAL SAFEGUARDS
1. Bank Deposits It is recommended that deposits be made daily, if the total receipts on hand exce
ed $250.00. If daily receipts are less than $250.00, deposits shall be made within one week even
if the receipts for all days combined are less than $250.00. All money must be deposited prior
to holidays and weekends. Bank deposits should be prepared, as follows, to ensure the integrity
of the financial reporting.









Separate all currency and coins by denomination and carefully count and record it in the
appropriate section of the bank deposit form.
A tape may be run of any checks included in the deposit rather than indicating the
checks individually on the deposit slip.
A copy of the tape should be retained with your copy of the deposit records.
Total the deposit slip.
Tally the pre‐numbered cash receipts and make certain this total matches the deposit
total.
Attach the cash receipt verification with a copy of the deposit clip and file in date order.
For large deposits, have another individual independently count the currency only (not
the coins or checks) and verify the currency has been correctly recorded on the deposit
slip.
Both individuals should initial the deposit slip next to the currency amount on the
deposit slip.
Seal the deposit in a deposit bag in the presence of the second individual. This is called
dual control and places the organization in a better position to challenge any claim that
the bank may make that the currency received was not correct.
2. Bank Reconciliation Upon receipt of the monthly bank statement, the balance indicated on the
statement shall be reconciled to the bank account balance in the general ledger as of the last
day of the month. The reconciliation should be completed within thirty (30) days of the date of
the bank statement. Items that are needed for reconciliation are listed below.






Bank reconciliation form
Prior month’s bank reconciliation
Bank statement
Check register and/or cash disbursement journal
Cash receipts journal
General Ledger
3. Internal Controls Booster clubs are responsible for ensuring that proper internal controls exist f
or all of their financial activities. Internal controls are the foundation of sound financial manage
ment. They include the policies and procedures that an organization establishes to do the follow
ing.









Ensure that operations are effective and efficient
Safeguard and preserve the organization’s assets
Promote successful fundraising ventures
Protect against improper fund disbursements
Ensure that unauthorized obligations cannot be incurred
Provide reliable financial information
Reduce the risk of fraud and abuse
Protect members and volunteers
Ensure compliance with applicable laws and regulations
It is critical to establish good policies and procedures relative to internal controls. Internal
controls not only protect assets such as money and equipment, they also protect people. For
example, establishing good internal controls for fundraising events significantly
reduces the risk that anyone participating in the event will be accused of any impropriety.
Internal controls include segregating duties according to employees’ functions so that one
person is not handling a transaction from beginning to end. This is a critical part of a system of
checks and balances.
Functions that need to be segregated include the following.





Those who initiate, authorize or approve transactions
Those who execute the transactions
Those who record the transaction
Those who reconcile the transaction
Those responsible for the item resulting from the transaction
4. Verify that 1099s were issued, if applicable.
5. Retention of Records Since voluntary organizations often suffer from the constant turnover of
officers and members, it is important that the activities of the organization be clearly document
ed and that a procedure for retaining those documents be established. Listed below are
documents that should be retained by the organization.





Cash receipts
Cash disbursements and general ledger
Bank records
Income tax returns
Minutes of meetings as defined by the organization by‐laws
It is recommended that the organization obtain a safety deposit box or a similar storage facility
to ensure security of important documents.