So you were elected to be the treasurer for your association and you have attended your first board meeting. During the meeting, you gave a treasurer’s report to the board and they more than likely voted to approve the report. For many treasurers, this report is extremely simple because you have a checking account and possibly a savings account. There is not a lot of money moving from the association to other businesses or bills. So does this mean that the treasurer and board should not worry about having rules on the duties of the treasurer, rules on the expenditure of finances and oversight on budgeted funds?
The simple answer is, of course you should worry. Without rules, regulations and policies regarding the financials of an association, you are asking for problems.
First, as treasurer, you should be able to look in the association’s bylaws and find out your duties as the elected/appointed treasurer. Usually, the section is not that long, but it outlines the great responsibilities carried by the treasurer. PORAC’s Bylaws read as follows: “The Treasurer shall be the chief financial officer responsible for ensuring compliance with the fiscal policies of these Bylaws, the Board of Directors, and Executive Committee. (S.R.).” A chief financial officer (CFO) is the officer of the company/association responsible for managing the company’s finances, including financial planning, management of financial risks, record-keeping and financial reporting. PORAC also clarifies this by stating that the CFO will ensure compliance with the Bylaws and Standing Rules. Now, most associations will not have a long list of standing rules, such as those of PORAC, but you can. According to PORAC’s Standing Rules, the treasurer’s duties include the preparation and filing of state and federal taxes, audits, financial reports (quarterly reports to the Board), keeping financial records/transactions of PORAC, expending budgeted funds and managing reimbursements. As I said before, most associations do not go this in-depth, but it might be a good idea to do so to protect the association.
Second, as the treasurer, you should have a budget committee and possibly a financial committee. These committees would be organized by the president, and the treasurer should be the chair of the committees. The budget committee should meet at a minimum once a year to review the previous year’s expenditures and to finalize the budget for review by the board of directors. Once the board of directors approves the budget, the treasurer now has guidance to oversee and ensure compliance with the fiscal policies of the bylaws. So who checks the treasurer and board on the expenditure of the financials? This is the purpose of a financial committee. The financial committee reviews the books, vouchers and records to assure compliance with the fiscal policies of the bylaws. At the end of the year, the financial committee reports to the members of the association on its findings.
All these steps might seem like a lot of work for the treasurer and committee members. The short answer is, yes, it is a lot of work. But it is extremely important to members of any association to be informed of the financials of their organization. As leaders in small or large associations, we have a responsibility to protect the financials of the association. Any member of any association should be able to ask for the financial records of the association. And the treasurer or board of directors should be happy to share the information without worry of their actions on expenditures.
Finally, and probably the most important part, is to contact your labor representatives and ask them to review your bylaws. The following are some examples of questions that should get answered: What is my responsibility as the treasurer? Is there ability for wrongdoing? Do we need to set standing rules for reporting expenditures, financials and budgets annually? Do you know of an attorney to look over our state and federal tax requirements? There are several more questions we could all come up with — there are no stupid questions. Once you believe your bylaws are satisfactory, take all your records to a CPA or labor representative and have them review the association financials.
I truly believe that if you just spend some time reviewing your bylaws and how the financials of your association are managed, you will be much more confident as a treasurer. Stay safe and make it to retirement healthy.