Hello, fellow PORAC members. I hope everyone had a wonderful holiday season with their family and friends.
I would like to thank everyone who has put their trust in me to be PORAC’s new treasurer. In the next two years, I look forward to being more involved in PORAC and working with the Board of Directors and PORAC staff to represent you all as the treasurer.
Throughout 2021, I plan to keep you all informed on PORAC’s financials and the essential responsibilities of an association treasurer.
PORAC’s financials encompass a wide variety of accounts, ranging from general funds to political activity to all our invested portfolios. Knowing I do not have a lot of space to write and not wanting to bore you all to death, when needed I will be giving updates on the status of the funds. If something big happens, I will try to focus on one aspect and still give the basic status of all the funds.
I would like to review the basic responsibilities of an association treasurer: the legal responsibilities you have to the association, fiduciary responsibilities to the membership and some possible issues that you can face if you do not properly handle the finances of your association. Managing the association finances is one of the biggest responsibilities a board of directors has. Strong finances allow your association to pay for charity work in your local area, conduct public outreach (political or nonpolitical), assist during contract negotiations and help out your members.
For these reasons, the directors need to ensure the proper amount of dues is being collected from the association’s members. If an association is not interested in politics (not sure why that would be), all you should need is money to pay for legal defense and negotiations at a minimum. That can cost a lot, depending on politics in your area or the legal issue. You might only need 1% to 2% of monthly salary or a flat fee from all members. Whatever you choose, it has to be sufficient to the needs of the association. It is the job of the treasurer to ensure you keep to the budget and/or request a large enough amount of money.
The directors, and especially the treasurer, need to know how to set up financial accounts that will prevent illegal activities. We have all read about associations losing money to someone because there were not redundant checks and balances on distributing money. The easiest is a dual signature on checks. This means two people have to sign the check and agree to the distribution of the money. Other steps are monthly or quarterly audits or reconciliation of the accounts.
The above are just a few of the basics of being a treasurer for an association. Over the next year, I will be covering these in greater detail and having question-and-answer interviews with financial organizations PORAC uses. Hopefully, it will be informative and helpful to you as members and association leaders.