Treasurer’s Message

Marcelo Blanco
PORAC Treasurer

As mentioned in a past article, PORAC fared well during an audit of our prior year’s financials. However, in a management letter, the auditor noted a few areas of concern, including segregation of duties and oversight of chapter funds. PORAC controller Kim Busman refers to the management letter as a report card of her ability to properly manage PORAC’s finances. The size of our organization makes it cost prohibitive for us to segregate duties because we would need a much larger accounting department.

However, we don’t take this issue lightly; as such, we have numerous checks and balances in place to ensure the organization is protected from being defrauded by one of our own. Those checks and balances include the regular review of our financials by the PORAC President, Vice President, Fiscal Management Committee, Budget Committee, Board of Directors and Treasurer. Interestingly enough, the auditing group did not mention segregation of duties. I believe Kim hammered them enough with the various safeguards listed above for them to realize we are not going to hire another accountant and there are plenty of measures in place to protect the organization from wrongdoing.

Consequently, the auditors were also concerned that PORAC wasn’t monitoring how chapters spend their reimbursement monies. Furthermore, the auditors noted that some chapters kept large balances of cash, which could increase PORAC’s risk of fraud. The issue was deferred to the Fiscal Management Committee to evaluate and come up with a possible solution. As such, Kim and I developed guidelines for how PORAC can better monitor our chapters’ general fund income and expenses and how those items are documented and reported to PORAC. The sticking point is the auditors view this as PORAC’s money. They have difficulty with PORAC relinquishing control of these sums of money to chapters to monitor, particularly large sums of money, of which PORAC has little oversight. We are asking each chapter to provide PORAC with copies of their bank statements to ensure the monies are being used to further PORAC’s direction in support of their members.

It’s important that chapter members and leaders use their reimbursement monies for the betterment of our members. For example, chapters should consider selecting an active small association to send to Conference or symposia to help develop the association’s leadership to better serve their members. Or chapters could cover the expenses of the chapter Executive Board to attend Conference or Symposium. Other options consist of practices many of you currently use, such as supporting member association fundraising events, socials, or — everyone’s favorite — golf tournaments.

For the most part, everyone is doing a great job with reporting expenses. We appreciate everyone’s diligence in completing the reporting form, which helps to provide us with additional information and justification for how your monies are being spent. Kim and I understand that chapter treasurers volunteer their time. We need to ensure that we address the concerns of the auditors and ensure we are not overly tasking our chapter treasurers with complex financial requirements. On the other hand, the chapter Executive Board and members should also be reviewing the chapter’s financials to ensure the chapter is spending its monies properly.

The last issue brought up was an insurance mechanism for our PIC/PAC monies. As we are all aware, PORAC has substantial funds in our PIC/PAC accounts. As such, the auditors were concerned those monies were not properly insured against loss. Kim and I, along with our PIC/PAC firm, are working on a solution for insuring those funds.

Once again, thank you for your efforts and I look forward to being able to provide you with an update at Conference and the chance to offer additional insight on the positive work your PORAC financial team is accomplishing.

Over the past several years, I have made a commitment to be your fiscal watchdog and I continue to stand by that. PORAC has made great financial strides during the past few years and we need to ensure that the organization continues to remain financially strong through prudent fiscal management and oversight. As a side note, our investments have grown substantially since Mark Sikorski and I began monitoring those funds. The funds have grown in excess of 122%, considering 25% of our funds are in fixed income.

Protecting PORAC’s mint financial footing.