mandible -
Do you have any reason to think the financial records are inaccurate, mishandled, or misrepresented? Do you have any reason to think someone has misappropriated money? If not, and all you're dealing with is a lack of organization, then you can probably just get in control and move forward. If you have the records from the past, you could possibly conduct an audit to ease the minds of your current officers.
A financial review ("audit" for lack of a better term) can only be done if there are adequate financial records to review. The objectives are to verify that reasonable financial controls are followed, that the records are accurate (especially that the account has been reconciled monthly), and that the money has been handled properly. You need bank statements, receipts, invoices, deposit tickets, cancelled checks and preferably some type of monthly treasurer's report to conduct that type of review. Bylaws (for verification of money handling policies) might also come into play. If your PTO doesn't have those records, the desire to do an audit may be a moot point. Your best bet in that case might be to accept the bank's current balance for your account as accurate, and move forward.
Sorry for that ramble...you didn't say your records were incomplete, only that an audit had not been done in the past.
If I were on your new board, and we couldn't conduct an audit (for lack of records), I would be certain that our new board publically announced (in the form of meeting minutes) that we are accepting unaudited books, and that we are now implementing financial control procedures XYZ to protect our PTO and our officers in the future. I'm no attorney, but that seems a reasonable way to assert that you have nothing to do with the way the money was handled in the past (if there were any misappropriation).
Regarding two signatures on every check...If you require two signatures, you are demanding that two of your leaders agree with the expense. Thus, no one person has the authority to spend PTO money on her own. Two signatures is a way to acknowledge and formalize the responsibility ALL your officers share in the handling of the PTO's money. It is a way to keep the spending in control so a free-thinking treasurer doesn't take financial matters into her own hands. You might have a very fastidious, super sensitive treasurer this year, but who knows about next year or the next year? What if the next treasurer goes on a power trip? What if she is really tight with the principal and starts writing checks based only on the principal's requests. Sounds silly, but situations like that are written about on this forum all the time. Implementing a two signature policy just helps avoid those situations.
Some people will argue that requiring two signatures is too slow and inefficient. We need checks on the spur of the moment!, they'll argue. I just know that in my four years as treasurer, I think there was only one time we needed a check ASAP, and that was because we forgot to write it in advance, not because it was an unexpected urgent request. Think carefully about your PTO - are there really expenses that must be paid RIGHT NOW!?
Some people will adopt a two signature policy and then circumvent it by having one of the authorized officers presign several blank checks. Duh! Where's the financial control that?? The signer should perceive her signature as her personal approval of the check. Would anyone sign a contract without reading it? It's basically the same thing. Don't fall into that trap.
Now your bank will probably tell you that they can't enforce your two signature policy. The bank will cash your checks even if there is only one signature. This must be your own internal policy that you enforce rigorously. No exceptions even though you know the bank will not care. There is no reason to tell your members that the bank doesn't enforce this policy. Do order your checks to have two signature lines, though, so you are always reminded that two signatures are required.
We have three officers on our bank's signature card: the president, one VP, and our treasurer. I've read here recently that your treasurer should never sign checks. I don't agree with that policy as long as you have two signatures. When a check needs to be signed, the treasurer signs and then tracks down one of our other two authorized signers. We also have a policy that says if you never sign a check for yourself. So if the tresurer is being reimbursed for a PTO expense, the Prez and VP must sign the check.
In addition to the actual check, we have standard forms we fill out to substantiate every financial transaction. The same two signers must sign the related form. This is another way the signers are demonstrating their agreement with the check since the form includes a reason for the check, what budget account it comes from, and more info that isn't on the check itself.
You've hit a hot button with me, obviously. My best advice at this point would be have your PTO invest in a copy of the Treasurer's Toolkit manual available from this website. It includes all this info plus loads more, plus forms and samples for your treasurer.
As far as your bylaws go, yes, until new ones are adopted, the old ones are in effect.
[ 10-20-2005, 09:39 AM: Message edited by: Critter ]
