AUXILIARY FINANCIAL CONTROLS 2023 FALL DTRAIN 23

slide1. AUXILIARY FINANCIAL CONTROLS 2023 FALL DTRAIN
23 September 2023
Mark F. Letavish DSO-FN
Slides taken from NTRAIN Presentation developed by Donna Miller ANACO-CFd
28 April 2022 (used with permission.) 1<br>
slide2. Welcome Key Points:

Developed at the National Level

16790 / AUX-SOP-008(A)
25 February 2022

Currently the guiding document for all financial policies and procedures at all levels of the Auxiliary 2<br>
slide3. Overview PURPOSE – Establish Standard Operating Procedures (SOP) for control and management of Auxiliary Unit Funds
BACKGROUND – In the absence of tight financial controls, significant risk exists for loss of unit funds. SOP provides guidance to prevent unchecked and unaccountable fund access and addresses potential conflict of interest 3<br>
slide4. Overview Con’t REGULATORY GUIDANCE • Auxiliary Manual COMDTINST M16790.1 (series)
Auxiliary Flotilla Procedures Manual COMDINST M16791.5 (series)
14 USC Subpart 3901
33 CFR Subpart 5
ALAUX 021-18 of 25 Aug 18
Information & Life Cycle Management Manual COMDINST M5212.12 (series)
National Archives & Records Administration, General Records Schedules Transmittal 31 of April 2020 4<br>
slide5. Organization UNIT FINANCE OFFICER
Unit finance officer required by 33 CFR Subpart 5.5 and the authorized unit officer to collect and distribute the unit funds
Appointed by elected leader within 30 days of assuming office.
Finance officer or appointed assistant shall NOT be familial-related to the current elected leaders or immediate past leader in the chain of leadership. 5<br>
slide6. Organization Con’t Workload of additional offices shall be reviewed before finance officer appointments. 6<br>
slide7. Organization Con’t ELECTED LEADERSHIP
Unit leaders authorized to create and manage unit bank accounts by 33 CFR Subpart 5.7. Leadership ensures accounts are created and oversees the management of the accounts through the unit finance officer
Elected officer at any organizational level shall not concurrently serve as a finance or materials officer at any organizational level. 7<br>
slide8. Organization Con’t DIRAUX may grant a waiver upon validation of need by the District Commodore (DCO) not to exceed one year.
Finance office must be relinquished prior to commencing elected office unless a waiver has been granted 8<br>
slide9. Bank Accounts and Funds Management BANK ACCOUNT ESTABLISHMENT
Only federally-insured (FDIC or NCUA) banks or credit unions shall be used.
Multiple accounts permitted (i.e. checking, savings, and/or certificate of deposits)
Auxiliary TIN 52-1500576 shall be used for all unit accounts.
Auxiliary is considered a “government entity” not a “non-profit”. 9<br>
slide10. Bank Account and Fund Management Con’t Signatures cards on accounts shall be updated within 4 weeks of replacement of unit elected officers or the finance officer.
Bank notification service shall be set to notify the elected officers and finance officer of activity on the accounts 10<br>
slide11. Bank Account and Fund Management Con’t BANK STATEMENTS
Unit bank statements shall be reviewed monthly by unit leader and the finance officer.
Unit leader and finance officer shall have separate usernames and passwords for accessing bank account(s).
Upon completion of the monthly review, an email attestation shall be maintained for audit purposes. 11<br>
slide12. Bank Account and Fund Management Con’t SAFEGUARDING ACCOUNTS
Bank account information shall be limited to individuals with a need-to-know 12<br>
slide13. Bank Account and Fund Management Con’t ACCOUNT CONTROLS
Auxiliary operates on a cash basis with income recorded when deposited and expenditures recorded when payment is made.
Original or image copies (photocopies or scanned) of original and cancelled checks shall be maintained.
With written consent of unit leader, the finance officer may close an account and transfer funds to another federally-insured institution. 13<br>
slide14. Bank Account and Fund Management Con’t Unit leader must approve payment before the finance officer executes disbursement.
Public Education funds shall be tracked separately to ensure they are not used for social events, gifts, or subsidizing membership dues. May use the FIN-1A for PE Funds 14<br>
slide15. Bank Account and Fund Management Con’t ELECTRONIC FUNDS MANAGEMENT
Electronic transfers between accounts are limited to accounts owned by the unit and approved in advance by the unit leader
PayPal and Square accounts managed by the finance officer are authorized.
Zelle and Venmo applications are not authorized for use 15<br>
slide16. Bank Account and Fund Management Con’t CREDIT AND DEBIT CARDS
Unit credit card and/or debit cards are not authorized 16<br>
slide17. Bank Account and Fund Management Con’t COMMON AUTHORIZED EXPENDITURES
Materials for teaching boating safety classes
Flags, pennants, and patrol signs
Auxiliary insignia (one-time basis for new member enrollment kit)
Design and development of Auxiliary
Design, development and procurement of Auxiliary office and unit coins 17<br>
slide18. Bank Account and Fund Management Con’t Materials and services needed for conducting unit conference, meetings, ceremonies, and training events
Materials and equipment needed to meet Auxiliary-specific facility acceptance criteria
Authorized award and recognition items
Materials and services for conducting unit administration 18<br>
slide19. Bank Account and Fund Management Con’t Gift presentation to Coast Guard unit or individuals within authorized limits (no PE funds)
Expression of joy or sorrow specifically regarding unit members
Auxiliary unit dues derived from membership dues 19<br>
slide20. Bank Account and Fund Management Con’t COMMON UNAUTHORIZED EXPENDITURES
Dues obligation of any unit member regardless of their status including resignation or disenrollment.
Presentation items for a non-retirement-eligible member’s disenrollment from the Auxiliary
Public Education funds may not be used for social activities or gifts 20<br>
slide21. Donations, Gifts and Grants CGAuxA, Inc. is the vehicle for all national, regional, or broad fundraising initiatives that may benefit the Auxiliary, its units, and its programs.
The DCO shall act as the Auxiliary gift acceptance authority, accepting gifts on behalf of the Auxiliary, for unsolicited gift offers at the district, division, or flotilla level, and if the market value of the offered gift does not exceed $5,000. 21<br>
slide22. Donations, Gifts and Grants, Con’t For unsolicited gift offers having a market value in excess of $5,000 but no greater than $50,000, the DCO shall forward the gift offer (e-mail is acceptable), with an acceptance recommendation, the advice and guidance of the DSO-LP, and the prohibited source analysis, to the Director.
The Director shall determine whether or not to authorize the DCO to accept this type of gift offer, and will so notify the DCO. 22<br>
slide23. Donations, Gifts and Grants, Con’t Exception to the above provisions may be exercised in the event an Auxiliary unit is approached by a non-federal entity with an unsolicited gift of funds (cash or check) not exceeding $100.
In such circumstances and if the DCO is not present, the Auxiliary unit leader may represent the DCO for the purpose of acknowledging and accepting the gift 23<br>
slide24. Membership Transactions ENROLLMENTS
Initial membership dues shall be paid after DIRAUX has approved enrollment and a member identification (ID) number has been assigned 24<br>
slide25. Membership Transactions Con’t MEMBERSHIP DUES
Dues start at enrollment and are later collected annually as authorized by the unit Standing Rules.
Member’s dues are composite of national, district, division, and flotilla dues.
Annual dues list is pulled on 1 January of each year and units are obligated to pay annual dues for any member on this list 25<br>
slide26. Membership Transactions Con’t Initial dues for new enrollees may be quarterly prorated based on the enrollment date.
A membership list shall be pulled to track/log payments, which include member name, check number (or PayPal or Square), date of payment, and date of deposit 26<br>
slide27. Financial Reports and Records STANDARD UNIT FINANCIAL REPORTS AND RECORDS
Annual budget
Reconciled bank statements
Receipts, disbursement vouchers, & authorization for payment
Deposit slips or records of deposit
General ledge tracking transactions (QuickBooks, Quicken, Excel, checkbook, or paper ledger) 27<br>
slide28. Financial Reports and Records Log(s) of membership dues collection & public education payments
Membership meeting financial reports
Meeting minutes with special motions for authorized expenses
Copy of the unit’s inventory • ANSC 7025 forms
Copies of contracts, agreements, and/or grants 28<br>
slide29. Financial Reports and Records Con’t ANSC 7025 FINANCIAL REPORT OF AN AUXILIARY UNIT
Prepared in January for previous year after all bank statements have been received.
Change of elected leaders or finance officer will trigger a new ANSC 7025 and must be submitted to DIRAUX within 30 days of change. 29<br>
slide30. Financial Reports and Records Con’t Unit leader in the chain of leadership may direct an ANSC 7025 from the subordinate unit any time during the year and it shall be submitted within 30 days 30<br>
slide31. Financial Reports and Records Con’t MONTHLY FINANCIAL REPORTS
Finance officer shall prepare a financial report of deposits, disbursements, and bank accounts monthly and provide it to unit elected leadership and membership in writing.
Report shall reflect segregation between general funds and public education funds to track balances and ensure proper management. 31<br>
slide32. Financial Reports and Records Con’t VAILABILITY TO MEMBERSHIP
Financial reports and records shall be made readily available for review by members, chain of leadership, and Coast Guard.
External requests outside of the Auxiliary and Coast Guard shall be referred to the Coast Guard as Freedom of Information Action (FOIA) request 32<br>
slide33. Financial Reports and Records Con’t MAINTENANCE, SECURITY, AND SUBMISSION
Finance officer shall maintain the financial report and records for the unit.
Unit financial report , records, and materials (i.e., checkbooks) shall be kept secure by and in the custody of the unit finance officer whenever not in use.
Proper safeguards shall be employed to prevent loss of financial records throughout the retention periods. 33<br>
slide34. Financial Reports and Records Con’t RETENTION
Upon completion of the current year, financial reports, records, and supporting documentation shall be retained for a period no less than eight years.
Paper reports, records, and documents may be converted to electronic form and retained in that manner after six years. 34<br>
slide35. Financial Reports and Records Con’t MEETINGS
Finance officer shall render a financial report at each regular meeting

End of session 35<br>
slide36. References Mark Letavish, DSO-FN
Email: DSOFN5NR@gmail.com
Phone: 302-603-4322
http://agroup-bx.wow.uscgaux.info/content.php?unit=BX-GROUP Go to SOP tab. Look for Auxiliary Financial Controls

FIN-3 Audit Committee Guide and Checklist:
https://5nr.org/d5nr-programs/administrative-services/finance/ 36<br>
slide37. AUXILIARY FINANCIAL CONTROLS – Budgets and Audits 2023 FALL DTRAIN
23 September 2023
Mark F. Letavish DSO-FN
Some slides taken from NTRAIN Presentation developed by Donna Miller ANACO-CFd
28 April 2022 (used with permission.) 37<br>
slide38. Budgets and Financial Planning UNIT BUDGETS
Annual operating budget extends from January 1st through December 31st and operate on a cash basis.
The unit budget should be established in advance of a new year but no later than 3 months of the start of the new year.
Unit income should have a goal in mind for future disbursement for authorized Auxiliary activities. 38<br>
slide39. Budgets and Financial Planning Con’t A budget approved by the unit members authorizes the unit leader to approve expenditures and the finance officer to execute the disbursements of funds.
Bills/invoices presented for payment that were not included in a budget line item and have no pre-approval shall not be paid without approval of the unit membership or board, as appropriate 39<br>
slide40. Budgets and Financial Planning Con’t Units shall strive for a balanced budget and develop plans for use of excess accumulated funds.
Units may not overspend their cash balance or maintain petty cash 40<br>
slide41. Budgets and Financial Planning Con’t TAX IDENTIFICATION AND EXEMPTION
Federal Taxpayer Identification Number (TIN) for all units is 52 - 1500576.
Some states may authorize sales tax and use tax exemptions.
Tax Exemption Certificate for Federal Government Agencies for Occupancy of Hotels, Motels, and Similar Accommodations available for Auxiliary conferences, training, and other remote locations 41<br>
slide42. Budgets and Financial Planning Con’t GRANTS AND CONTRACTS
Primary concern is to avoid prohibited sources.
Indemnification and Hold Harmless Clause shall not be included in any grant or contract agreement.
All agreement shall be reviewed and approved by Legal Staff Officer (DSO -LP) before being signed by unit elected leader with copies to DCO and DIRAUX. 42<br>
slide43. Budgets and Financial Planning Con’t Auxiliary TIN shall be used for Employer Identification Number (EIN) on agreements and contracts.
AuxA can assist with grant writing or to provide grant application development consultation. 43<br>
slide44. Budgets and Financial Planning Con’t FINANCIAL PLANNING SCHEDULE 44<br>
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slide47. Budgets and Financial Planning Con’t Typical Revenue Line Items
Membership Dues
Public Education Fees
Contributions
Gifts
Interest on Accounts
Other Income 47<br>
slide48. Budgets and Financial Planning Con’t Typical Expense Line Items
Awards
Bank Charges
Building Maintenance
Conferences/Meetings
Dues
Donations
Equipment
Insurance 48<br>
slide49. Budgets and Financial Planning Con’t Typical Expenses Line Items Con’t
Materials
Meeting Fellowship
Office Expenses
Public Education Courses
Uniforms
Utilities
Rents
Other Expenses 49<br>
slide50. 2023 Dues Proration 50<br>
slide51. 2024 Dues Proration 51<br>
slide52. Audits FINANCIAL AUDIT
Audit shall be completed within 30 days of the end of the year, turnover of elected officers or finance officer, or direction of unit leader, DIRAUX or other Coast Guard authority.
Audit shall examine associated documentation for any expenditure including checks.
Financial Audit Committee shall not include the unit’s current elected leaders, finance officer or any of their family members. 52<br>
slide53. Audits Con’t Audit shall be conducted in-person unless circumstances warrant other means, i.e., pandemic, excessive distance to convene in-person, in which case the audit may be conducted by electronic means.
Committee should be comprised of at least three members and must include the incoming unit elected leaders and finance officer if the positions have turned over 53<br>
slide54. Audits Con’t Failure to comply with the SOP or if financial irregularities are suspected/discovered, the DCO may direct a financial audit followed by additional actions deemed necessary. 54<br>
slide55. 55 SCHEDULE
NOTE: If an auxiliary unit fails to comply with its submission deadline, the DCO may authorize an audit.<br>
slide56. Audits Con’t INVENTORY AUDIT
Inventory shall be completed within 30 days of the end of the year, turnover of elected officers or materials officer, or direction of unit leader, DIRAUX or other Coast Guard authority.
Unit inventory shall be included as part of the ANSC 7025 submission, but attachments to the form are permitted. 56<br>
slide57. Audits Con’t Inventory Committee shall not include the unit’s current elected leaders, materials officer or any of their family members.
Audit shall be conducted in -person unless circumstances warrant other means, i.e., pandemic, excessive distance to convene in -person, in which case the audit may be conducted by electronic means (i.e., visual sighting of inventory items via video connection). 57<br>
slide58. Audits Con’t Committee should be comprised of at least three members and must include the incoming unit elected leaders and finance officer if the positions have turned over.
Failure to comply with the SOP or inventory irregularities are suspected/discovered the DCO may direct an inventory audit followed by additional actions deemed necessary.
The Audit and Inventory Committees may be the same. 58<br>
slide59. Audits Con’t CONDUCTING THE AUDIT
The unit’s Finance Officer (FSO-FN; SO-FN) is staff to the Audit Committee
Prepare and present the following documents to the Committee for review and verification:
Previous year’s ANSC 7025.
Previous year Audit Committee Report
Draft current year ANSC 7025
Complete year’s Bank statements showing beginning and ending balances on all accounts 59<br>
slide60. Audits Con’t Documents Con’t
Check book register (may be from financial software such as Quick Books or Excel spreadsheets)
Record of Receipts and Disbursements
Copy of General Ledger if computerized
Certificates of Deposit or Savings Account Statements
Cumulative monthly Financial reports. (ex. FIN-1 Reports; Monthly Financial Officer’s Reports, etc.)
Receipts and Invoices to support transactions 60<br>
slide61. Audits Con’t Documents Con’t
Unit Budget
Minutes of Unit Meetings – showing monthly review of financials by membership. 61<br>
slide62. Audits Con’t Conducting the Audit Con’t
CASH Accounts
See that all Bank Accounts are reconciled to the balances shown in the financial records
Verify the existence of all savings accounts or certificates of deposit and reconcile to the balances shown in the financial records
Determine the authorized signers and the number of signatures required on all accounts
All checks are appropriately signed
Verify receipts are being timely deposited 62<br>
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slide64. Audits Con’t Revenues
Verify member dues are paid (number of members x dues rate)
Review interest income from bank statements 64<br>
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slide67. Audits Con’t Expenditures
Assure that all expenditures have been approved
Examine original invoices
Check for appropriate approvals
Compare checks to invoices, NOTE: If bank does not return canceled checks with bank statements, look for a photocopy of check attached to invoice 67<br>
slide68. Audits Con’t Expenditures con’t
Compare categories and amounts of expenses against budget for reasonableness. 68<br>
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slide71. Audits Con’t Materials
If the unit maintains any materials review detail of materials on hand, showing date purchased or if disposed, date of disposal and evidence of disposition. 71<br>
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slide74. Audits Con’t Items NOT to be included as Inventory:
General Office Supplies – pens, pencils, paper, envelopes, stamps, ink cartridges, thumb drives, etc.
PA Materials – brochures, give-aways, trinkets whether bought by the unit or Coast Guard
PE Materials – text books, training devices or aids, charts, etc.
Maintenance or Housekeeping Supplies – trash bags, cleaning supplies, mops, buckets, vacuum cleaners, etc.
Paper Products – plates, cups, plastic utensils, toilet paper
Operational Items that are inventories by the FSO-Ops as part of the annual RSS process such as EPIRBS, PFDs etc, as these are already recorded in AUXDATA II. 74<br>
slide75. Audits Con’t Items that SHOULD be included as Inventory
Capital Items or fixed equipment such as buildings, boats, vehicles, trailers, furniture, computers, radio equipment such as repeaters, HF equipment, etc. (not part of a facility or other asset).
If such items are owned by the unit, they should be listed on the ANSC 7025 form.
If owned by the Coast Guard but being used by the unit, then listed on the ADMIN-7 form. 75<br>
slide76. Audits Con’t Items should remain as inventory from year to year until such time that they are replaced, become unusable, disposed or destroyed.
Items being removed should note the reason for the removal, date removed and the disposition of the item. 76<br>
slide77. Audits Con’t Financial Reports
Review draft of current year’s ANSC 7025.
Verify beginning balances agrees with prior year ending balances.
Verify revenues and expenses agree with financial records
Verify form is mathematically correct
Verify ending balances agree with the reconciled accounts. 77<br>
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slide79. Audits Con’t Audit Committee Report and Recommendations
Confirm that established procedures are being followed
Verify approvals
If recommendations are to be made, prepare a letter to the unit Senior Elected Officer summarizing those recommendations 79<br>
slide80. Audits Con’t Audit Committee Report and Recommendations con’t
The Lead member of the Audit Committee should sign the ANSC 7025 and forward to the Unit Senior Elected Officer for further signatures (if not previously signed.)
If a Flotilla Audit, report should be sent to Division Commander. The Division Commander will forward all Flotilla Reports along with Division’s Report to DSO-FN according to above schedule, 80<br>
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slide84. Audits Con’t Audit Committee Report and Recommendations con’t
All Auxiliary entities (e.g. SARDETS, training centers, etc.) should conduct annual audits following the same procedures as described above. Those reports should also be forwarded to the DSO-FN
Use of a checklist can be an effective tool in conducting the Audit, making sure that all items are reviewed as required. 84<br>
slide85. Audits Con’t Completing the ANSC 7025 Form
Only Version dated 11/22 will be accepted. This version automatically does the math. Older versions will be returned and the Audit will not be accepted until the current version is submitted.
Remember to fill out all of the Header Information, ie, Reporting Unit Name; Unit Number; Type of Unit being reported (check box) 85<br>
slide86. Audits Con’t Completing the ANSC Form 7025 con’t
Typically check the “Regular” box. May also check the “Relief” box if either the FSO-FN (SO-FN) or FC DCDR) is changing.
Fill in the Dates Line 1 and Line 8.
Complete each line as necessary. Let the form do the math.
Line 8 MUST match Line 9
Sign the form as indicated. Cross out “Outgoing Officers” if not a Relief Report. 86<br>
slide87. Audits Con’t Completing the ANSC 7025 Form con’t
Complete Page 2 – Unit Inventory Record – as needed. If no inventory simply indicate N/A on the top line.
As on page 1, remember to sign the form as indicated. Cross out “Outgoing Officer” if not Relief.
Only submit the 7025 form to DSO-FN; do not need the Audit Checklist. 87<br>
slide88. References Mark Letavish, DSO-FN
Email: DSOFN5NR@gmail.com
Phone: 302-603-4322
http://agroup-bx.wow.uscgaux.info/content.php?unit=BX-GROUP Go to SOP tab. Look for Auxiliary Financial Controls

FIN-3 Audit Committee Guide and Checklist:
https://5nr.org/d5nr-programs/administrative-services/finance/ 88<br>