Financial Controls and Procedures for Auxiliary Units

Establishment of Standard Operating Procedures (SOP) to ensure control and management of Auxiliary Unit Funds, guided by regulatory frameworks and leadership appointments in place to safeguard against financial risks and conflicts of interest.

• Financial controls
• Auxiliary units
• Standard Operating Procedures
• Regulatory guidance
• Leadership appointments

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1. AUXILIARY AUXILIARY FINANCIAL FINANCIAL CONTROLS 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

2. Welcome 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

3. Overview 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

4. Overview Overview Con t 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

5. Organization 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

6. Organization Organization Con t Con t - Workload of additional offices shall be reviewed before finance officer appointments. 6

7. Organization Organization Con t 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

8. Organization Organization Con t 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

9. Bank Accounts and Bank Accounts and Funds Management 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

10. Bank Account and Fund Bank Account and Fund Management 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 Con t 10

11. Bank Account and Fund Bank Account and Fund Management 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. Con t 11

12. Bank Account and Fund Bank Account and Fund Management Management Con t SAFEGUARDING ACCOUNTS Bank account information shall be limited to individuals with a need-to-know Con t 12

13. Bank Account and Fund Bank Account and Fund Management 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. Con t 13

14. Bank Account and Fund Bank Account and Fund Management 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 Con t 14

15. Bank Account and Fund Bank Account and Fund Management 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 Con t 15

16. Bank Account and Fund Bank Account and Fund Management Management Con t CREDIT AND DEBIT CARDS Unit credit card and/or debit cards are not authorized Con t 16

17. Bank Account and Fund Bank Account and Fund Management 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 Con t 17

18. Bank Account and Fund Bank Account and Fund Management 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 Con t 18

19. Bank Account and Fund Bank Account and Fund Management 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 Con t 19

20. Bank Account and Fund Bank Account and Fund Management 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 Con t 20

21. Donations, Gifts and Donations, Gifts and Grants 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

22. Donations, Gifts and Donations, Gifts and Grants, 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. Con t 22

23. Donations, Gifts and Donations, Gifts and Grants, 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 Con t 23

24. Membership Membership Transactions Transactions ENROLLMENTS Initial membership dues shall be paid after DIRAUX has approved enrollment and a member identification (ID) number has been assigned 24

25. Membership Membership Transactions 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 Con t 25

26. Membership Membership Transactions 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 Con t 26

27. Financial Reports and Financial Reports and Records 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

28. Financial Reports and Financial Reports and Records 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

29. Financial Reports and Financial Reports and Records 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. Con t 29

30. Financial Reports and Financial Reports and Records 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 Con t 30

31. Financial Reports and Financial Reports and Records 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. Con t 31

32. Financial Reports and Financial Reports and Records 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 Con t 32

33. Financial Reports and Financial Reports and Records 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. Con t 33

34. Financial Reports and Financial Reports and Records 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. Con t 34

35. Financial Reports and Financial Reports and Records Records Con t MEETINGS Finance officer shall render a financial report at each regular meeting Con t End of session 35

36. References 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

37. AUXILIARY FINANCIAL AUXILIARY FINANCIAL CONTROLS CONTROLS Budgets and Audits 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.) Budgets 37

38. Budgets and Financial Budgets and Financial Planning 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

39. Budgets and Financial Budgets and Financial Planning 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 Con t 39

40. Budgets and Financial Budgets and Financial Planning 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 Con t 40

41. Budgets and Financial Budgets and Financial Planning 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 Con t 41

42. Budgets and Financial Budgets and Financial Planning 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. Con t 42

43. Budgets and Financial Budgets and Financial Planning 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. Con t 43

44. Budgets and Financial Budgets and Financial Planning Planning Con t FINANCIAL PLANNING SCHEDULE Con t Date Activity Immediately New bank signature cards for newly elected officers and/or finance officer Completion of unit financial and material audits 31-Jan 31-Jan Unit budget established at first membership meeting of the year Annual national membership dues invoice received at district Unit ANSC-7025 due to District 31-Jan 01-Feb 44

45. Date Activity 28-Feb Division submits annual national and district membership payment. Division submits 1st quarter national and district membership payment Division submits 2nd quarter national and district membership payment FSO-FN collects membership dues prior to 30 Sep Final date for receipt of flotilla membership dues for next year Certified letters mailed to members still owing dues. Division submits 3rd quarter national and district membership payment 30-April 30-June 30-Sept 30-Sept 1-Oct 30-Oct 45

46. Date Activity 1-Nov Begin membership disenrollment for non- payment of dues 30-Nov Audit Committee appointment before last regular meeting of the year. 30-Nov Budget Committee appointment before last regular meeting of the year. 15-Dec Last day district membership disenrollments are processed by DIRAUX 31-Dec Unit membership count is frozen for following year s annual dues payment 46

47. Budgets and Financial Budgets and Financial Planning Planning Con t Typical Revenue Line Items Membership Dues Public Education Fees Contributions Gifts Interest on Accounts Other Income Con t 47

48. Budgets and Financial Budgets and Financial Planning Planning Con t Typical Expense Line Items Awards Bank Charges Building Maintenance Conferences/Meetings Dues Donations Equipment Insurance Con t 48

49. Budgets and Financial Budgets and Financial Planning Planning Con t Typical Expenses Line Items Con t Materials Meeting Fellowship Office Expenses Public Education Courses Uniforms Utilities Rents Other Expenses Con t 49

50. 2023 Dues Proration 2023 Dues Proration Annual Q1: Jan - Mar Q2: Apr - June Q3: July - Sept Q4: Oct - Dec National $24.00 $18.00 $12.00 $6.00 $0.00 District $15.00 $15.00 $10.00 $5.00 $0.00 Total $39.00 $33.00 $22.00 $11.00 $0.00 50

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