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Chart of Accounts Maintenance

Where can I find (and can you answer for me with your own practices) documentation to support one person being responsible for chart of accounts maintenance? Here is the scenario. Church - main entity School - trade name operating under main entity tax id Sending Mission Agency - trade name operating under main entity tax id Converting to QB Enterprise Accountant 2014 (not MY choice) In order to continue with some level of security where staff in the Mission Agency are typically responsible for entering their own transactions (my staff in the church handle both church and school), the decision was made to keep separate databases (company files) for each of the entities. There is a desire by the Deacon Board to receive consolidated statements. Our current chart of accounts is honestly a mess across the board, so I am working on synchronizing, redesigning, streamlining, etc. When I brought up at our first QB conversion meeting that once I have completed the chart of accounts re-haul, only one person would be responsible for the maintenance of the chart of accounts....there was all sorts of push back. I tried to explain the importance of maintaining integrity of the chart of accounts, etc., but the other members of the team are mostly non-financial people. I'm trying to find documentation that will support my case. Any help you can provide is much appreciated! :) Desperate for some support. My title is Financial Manager and I oversee the finances of all three "entities". I do not have a CPA/CFO designation.

Answers

Anonymous
(Head of Department) |

I am not aware of publicly available documents to support your case.

Current place allows for users to create new account code. It could be difficult to effect streamline coding, definition and grouping and thus seamless additions across the group for ease of consolidation and group reporting. Prima facie, I support your view.

Strictly speaking, code creation and amendment should be restricted to ADMINISTRATOR. Within administrator pool, you either assign specific person to create code or all could create code. The latter requires a written NORM of Coding Convention, and even then, only the trusted ones could be worthy for amending the chart without messing up the definition and consistency across the Group.

What my former Group CFO did was to amend the Chart by moving things and order around to streamline across the Group. This could be an alternative avenue.

Rebecca Baxter
Title: Director of Finance
Company: Davidson Fink LLP
(Director of Finance, Davidson Fink LLP) |

Check with your independent accountant / external auditor. I believe that they will support your stand and may have specific reasons. It definitely is a best practice and an important step in minimizing risk.

Louise Woiteshek
Title: Controller
Company: Leabo Foods Distribution Inc
(Controller, Leabo Foods Distribution Inc) |

One approach to this is to design and present to the board a pro-forma financial statement and ask them if this gives them the detail they need to manage the operations. Once they have indicated the breakdown of expenses they need, then no accounts should be added unless an entirely new expense has arisen. 99 percent of the time, the new accounts serve no purpose and give no aid to the readers of the statements. It is just that the person cannot quickly find the correct account. Also, in QB Enterprise - in the Vendor center information, there is a field to set 3 most frequently used accounts. This helps the person entering the bills to quickly find the correct account for all reoccurring expenses.

Louise Woiteshek
Title: Controller
Company: Leabo Foods Distribution Inc
(Controller, Leabo Foods Distribution Inc) |

Regarding consolidated statements - in Enterprise, if you use identical charts of accounts in all three operations, there software will generate a consolidated financial statement. The key is that the account number and the name of the account must be identical. I use this with a 3 file operation and it works well.

Mark Sutherland
Title: CFO
Company: Profit By Design CFO & Controller Servic..
(CFO, Profit By Design CFO & Controller Services) |

I concur with what the others have said. I wonder how the School Administrator would feel if you took it upon yourself to re-write some of the curriculum! Nobody should be messing with the COA accept the Chief Administrator of the accounting system (Controller, CFO, etc.).

Peter Peters
Title: Consultant
Company: Peter Peters Accounting Consulting
(Consultant, Peter Peters Accounting Consulting) |

Control it… It is important to have proper control over adding and deleting items from the chart of accounts. Establish internal control system for authorising changes to the chart. It is critical part of your financial management and control. Review your chart of accounts on a regular basis (at least annually) to ensure it’s relevance, accuracy and completeness. A proper chart will help you monitor the business activities and optimise use of accounting systems monitor and improve performance.

What are internal controls?

Internal controls are the financial processes and procedures that enable the organization to safeguard its assets.

How is this done?

The most effective procedures are those that have the greatest segregation of duties. The more people involved in the process, the less likely it is that an error or defalcation will occur.

For example, the person who writes the checks should not be the person signing the checks. The person who orders the service or product should approve the invoice. The person with budget responsibility should also approve the expenditure and should code the invoice.

Who establishes the procedures?

Generally management establishes the system of controls. It is helpful to have an accounting manual detailing the procedures to be followed.

Ernie Humphrey CTP
Title: CEO & COO
Company: Treasury Careers
LinkedIn Profile
(CEO & COO, Treasury Careers) |

There was a just a webinar delivered by Proformative, "Is Your Chart of Accounts out of Control?". You can view the webinar recording here that addresses the issues being discussed here. https://www.proformative.com/events/your-chart-accounts-out-control-0

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

Wow, you are working with some people who want to control things they don't really understand. That is a recipe for disaster. You need to put your foot down. You also need to be in control of the administration of the G/L. It belongs to you. If you are responsible for reporting results, you have to be in control of the system that does that.

I realize in a church setting it is difficult sometimes to be assertive. But this is one case where the outcome is non-negotiable.

This is an issue of internal control, if people are seriously challenging you on this, you need to do some auditing of their accounts. Something is wrong and you need to find out what it is. Fraud also occurs in church accounts.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

https://info.undp.org/global/popp/frm/pages/maintenance-and-usage-of-the-chart-of-accounts.aspx#RolesResponsibilities Look under 7.0 Roles and Responsibilities.

http://www.ous.edu/departments/controllers-division/policies-procedures/ous-fiscal-policy-manual/roles-and#.160 Look under .160 High Level Responsiblities.

http://policies.uga.edu/FA/nodes/view/824/Chart-of-Accounts Look under Responsibilities at the bottom.

Hope that helps.

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