Everyone remember Rita Crundwell? She's the horse lady that gave Dixon, Illinois a long face when it was discovered that she had been helping herself to the city's money. About $53 million or so over a couple of decades. That's not Madoff, Stanford, or Petters money, but it's not exactly a small sum. Last summer Dixon […]
As you may have heard, there is a number of mighty upset people occupying various streets around the country. By reading some of the signs being held by these occupants, it’s obvious they’re peeved about a number of things. With such a wide range of gripes, the crowds have gotten quite large and since many people sympathize with the protestors, lots of donations are being made by those passing by, usually in the form of cash. This, as any accountant worth their salt knows, can be problematic, as evidenced by this video:
As the protests have grown, so have the donations. And since protests aren’t exactly bastions of internal controls, the problem of tracking the money coming in and being spent has become quite a chore. That chore has fallen on one person named Victoria Sobel who is functioning as Occupy Wall Street’s “chief treasurer.”
There’s no indication that Victoria is an accountant and, oddly enough, there doesn’t seem to be a lot of ready accountants amongst the occupiers, so the methods currently being used aren’t exactly robust. They started housing collections using “a large cooking pot covered in cardboard and duct tape” and gradually moved towards high-tech tools such as “donation buckets” and “a yellow messenger bag.” Despite these improvements, this system still needs some work Fortunately for Ms. Sobel, a person with some relevant experience recently turned up:
Then the first consultant, a certified public accountant sympathetic to the cause, came to help. Jo Ann Fleming […], who besides her accounting work has a radio show called Flash Talks Cash, sat down in a red tailgating chair next to three activists volunteering on the Occupy Wall Street finance committee.
Fleming heard a rundown of how the operation is working so far: Most of the money comes in through two donation buckets stationed at the ends of the park, where a steady throng of tourists and commuters is always passing by.
Teams of volunteers are split up into working groups for areas like food, sanitation and medical supplies, then spend the money on communal goods. Anyone who wants to be reimbursed for expenses has to get approval from a finance committee member before making a purchase. If it’s less than $100, they’ll sign out some cash, with orders to return with the goods and the receipt. If it’s more than $100, the purchase is supposed to be approved at a town meeting.
Once again, a CPA to the rescue! But since Ms. Fleming can’t quit her day job, she gave the best advice she could to the team on the ground:
After some probing, accountant Fleming determined the group needs to come up with a clear policy on how to get reimbursed for expenses. She suggested more frequent collection of the donation buckets, to avoid the temptation of dipping hands in—“cash is very troublesome.” And she urged them to create a spreadsheet tracking how much was received and paid.
More frequent collections. Clear, common sense policies. Spreadsheets. All excellent suggestions. But perhaps most importantly, Ms. Fleming recognizes when someone is doing the job of three people and is on the brink of cracking up (an important instinct in today’s accounting firms) so she gave Victoria some advice.
She turned to Sobel: “One woman can’t run the show. You’re exhausted; I can hear it in your voice. You need to delegate. You’re going to get burned out.”
Any double-entry experts that have some time on their hands and want to help the cause need to get downtown ASAP.
From the mailbag:
Just thought I’d share some developments from the audit world. Some financial institutions which respond to our audit requests are adding disclaimers such as the following:
“…The recipient acknowledges that [the respondent] does not represent and warrant that the information is complete and accurate. The recipient further acknowledges that the information may not disclose the entire relationship between the customer and [the respondent]…”
Basically, this is making the confirmation process entirely pointless as banks are saying that even if they sign and respond to a confirmation, they aren’t guaranteeing that their response actually means that the balance is accurate. They are also doing this in the fine print attached to a lot of confirmations so it wasn’t entirely obvious until some people started actually reading that fine print. This is causing issues as we can no longer rely on these confirmations for our audit procedures if they contain such a disclaimer.
As global cash transactions have become increasingly complex, both the familiarity and training of accountants in the cash area may have actually declined. Most young adults no longer keep check books, and consequently, no longer perform the reconciliation process on their personal accounts. Instead, they simply check available balances either online or at an automatic teller machine, and adjust their spending habits accordingly. [SmartPros]