North Carolina Chess Association
Review of 1999 and 2000 Check Activity

Dear President Harris:
Thank you for your confidence in my ability to serve the organization. I have reviewed the bank statements and checks for the period January 01, 1999 through December 31, 2000. This review included summarizing the activity as provided by the bank (see spreadsheet tab Bank stmts) and categorizing all the checks to the best of my ability (see tab Check details). I have not detected any fraud; however, bad judgment, mismanagement, and lack of basic internal controls were found.

The following Internal controls are needed:
1. Prepare annual budget and present to the membership in the first Gambit after business meeting
2. Reconcile bank account monthly (did not appear to be done at all during the Jones administration)
3. Prepare a simple financial statement at each business meeting and publish in Gambit
4. Require a second officer to sign check if one is written to an officer (Jeff wrote checks to himself)
5. Write what a check is for on the memo line of the check
6. Write checks in numerical order (Jeff had checks out of sequence. It was as if he had some blank checks and Evan had some). You cannot easily reconcile or audit in this situation.

The following indicate bad judgment and mismanagement:
1. Committed funds to the NC Invitational for hotel rooms. In the future, this money should be saved.  There are plenty of players willing to act as host to the event and to individual players and directors. I would be willing to host the NC Invitational at my home if you can't find a more suitable place.
2. Purchased software (MS Publisher). This money should have been saved since so many people in the NCCA have computers and software already.
3. The Knights Tour cost $550, and I can't see where it helped the NCCA get more members. In the future this program should be reevaluated.
4. Did the NCCA need to spend $395 on the Internet website?
5. The NCCA is too small to be buying $350 worth of office supplies. Request donations from the members.
6. Jeff wrote himself four checks totaling over $1,000. Of those $620 were for cash. That is ill advised because there is no audit trail. The procedure should be to have the person pay for the required item out of his/her pocket and present a receipt for reimbursement by check. It is even better to write checks directly to the businesses that provide the service so that any impropriety is avoided.
7. Could the NCCA afford to send Matthew Hoekstra to the T of C at a two-year cost of $1,026?
8. Why did the NCCA pay for gas for some people to visit the NC Invitational?
9. It appears that John von der Leith was paid twice for the NC Open, ck# 847 for $175 on 10/31/99 and again on 11/23/99 ck# 874 both written by Jeff Jones.
10. I suggest that the NCCA try to find more volunteers rather than paying for everything themselves. My review did not include the deposits since no detailed information was given to me regarding them. In addition, I did not have the check register. Most of my review materials were provided by the bank. Again, thank you for entrusting me with this responsibility.

Sincerely,

Kenneth J. Baxter, CPA
Past President of the NCCA