Transparency and oversight of SSC financial processes

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Over the last year, the SSC has been working to improve transparency and oversight of its financial processes. Our 2016 audit (completed in June 2017), identified several weaknesses in the SSC’s financial procedures. These are outlined below, along with actions taken by the SSC to address these weaknesses. This list is adapted from a report presented to the Board in May 2018.  Some technical points have been combined into broader headings, but the issues are all listed.

  1. Reconciling section funds with our accounting records was difficult and time consuming
    • Additional review of financial records is now conducted by the executive, the office and our bookkeeper, before providing records to the auditor. 
    • Adjustment errors that had accumulated from previous years were corrected in June 2017 by interfund transfers. Moving forward, any necessary corrections will be applied annually
  2. Recording errors in financial records, and missing details on some entries
    • A monthly reconciliation spreadsheet is now used to track income and expenses. This can be viewed by the treasurer, the office and our bookkeeper, as well as signing authorities (see below).
    • A revised chart of accounts was developed and implemented for 2018. In revising the chart of accounts, all account codes were reviewed, and account codes added, removed and changed to better reflect SSC financial operations. For example, new account codes are in use to track donations made with different designations. The revised chart of accounts is intended to reduce errors due to ambiguous coding.
    • The office and our bookkeeper are entering invoices as soon as received and then later marking as paid.
    • For 2017 and 2018, entries include more details
  3. Single signing officer: Expenses were approved for payment by only the treasurer. Invoices lacked visible proof of approval.
    • At its June 28, 2017 meeting, the Board passed a motion establishing the Treasurer, President and Secretary as its three signing officers.
    • All cheques now require signatures of two of the three signing officers.
    • The Treasurer can issue etransfer payments under a single authorization for amounts no greater than $3000.
    • However, all financial claims and invoices are approved by two of three signing officers.
    • The office has revised the workflow for approval and payments and is cataloging regularly recurring expenses and revenue.
    • The Board has approved policies on payments and fund transfers, developed by the financial procedures committee.
    • The Board has approved a motion that the SSC set up electronic funds transfer for payments. Such a system will include approval from two signing officers for each payment and be possible for amounts over $3000.
  4. Payments made to the treasurer were approved and authorized by the treasurer
    • In addition to moving the creation of 3 signing officers, the Board moved that: If a claimant is a signing officer, the claim must be approved by two other signing officers.
    • Any claims submitted by a signing officer since July 2017 have been approved by the other two signing officers.
  5. Only the treasurer had access to banking information
    • All three signing officers have access to view banking information
  6. The auditor made several adjusting journal entries to reconcile both balance sheet and income statement accounts
    • In preparation for the 2017 year-end audit, financial records were not provided to the auditor until there had been a period of internal review and review by our bookkeeper.
  7. For Board expense reports, there was no written approval by an independent Board member evident on the expense reimbursement form.
    • Expense claim forms have been revised to require approval by two of three signing authorities.
    • Any claims submitted by a signing officer since July 2017 have been approved by the other two signing officers.
    • Additionally, the SSC has revised its travel claim form, and adopted a set of policies for travel claims.
  8. For specific expense transactions examined by the auditor, there was not adequate supporting documentation. Honoraria and award claims were specifically identified.
    • The minutes of Board meetings now include the names of all recipients of travel grants awards,  presentation awards, and awards for case studies in data analysis.
  9. The auditor did not note a consistent review by the Board of monthly financial reports or section statements in the minutes.
    • The Board reviewed a year-to-date financial report at the October 2017 Board meeting. The three signing officers and Executive Assistant have reviewed the financial reports more regularly – twice in the last half of 2017 and at year-end. This is done through the reconciliation of the journal entries and the financial reports generated from the profit and loss files by our bookkeeper.
    • The SSC is working with our bookkeeper to increase the frequency of regular reporting.
    • The SSC Treasurer does not have access to section accounts. Section accounts merit further consideration.
  10. There is no policy or procedure in place with respect to the timing of payments of expenses. Expenses are often paid ahead of time, before invoices are received. Other invoices are not paid for periods of time.
    • Any advance payments (most notably, funds provided to the host university department for expenses incurred in advance of an Annual Meeting) require an invoice and approval of two of three signing officers.
    • The Treasurer currently works to issue payment within one month of receipt of an invoice or claim or within the timeline specified on the invoice. This was largely achieved in 2017, with some exceptions.

Additional financial changes during the last year, not related to the weaknesses identified by the auditor, include:

  • Establishment of an endowment fund, managed by the Ottawa Community Foundation. The fund holds a portion of donations for future projects. In 2018, $20,000 was placed in the endowment.
  • Adoption of policies governing the management of GICs and other investments.
  • Groundwork in setting up an electronic fund transfer system
  • Discussions with our bookkeeper on setting up an electronic system for entering and tracking transactions

The significant changes are the result of work by many people, including Treasurer Edward Chen, Executive Secretary Llwellyn Armstrong, Executive Assistant Miaclaire Woodland, Past-President Hugh Chipman, bookkeeper Rachel Boutet of Envolta, Inc., the ad-hoc “financial processes group” (Hugh Chipman, Edward Chen, Llwellyn Armstrong, Shirley Mills, Robert Platt, Miaclaire Woodland and Rachel Boutet) and the Committee on Financial Procedures (John Koval (chair), Edward Chen, Shirley Mills, Jean-François Plante and Patrick Brown).

Friday, October 12, 2018

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