AFFILIATE GROUP FUND MANAGEMENT

By Ronald A. Secrist
Director of Recreation Champaign Park District

The management and control of funds raised by programs sponsored or affiliated with park and recreation agencies is a topic of concern to commissioners and administrators as well as to auditors responsible for reviewing departments' fiscal procedures.

The senior citizen program participants who collect funds from the sale of bake goods or bazaar items, the hockey league parents booster association's sale of candies for purchase of new uniforms or the recreation center's youth advisory council's car wash are common fund raising programs found in park and recreation agencies throughout the state. It is not uncommon for groups like this to raise several thousand dollars per year. Many of these non-renting groups establish their own bank accounts and spend funds with no agency scrutiny or authorization. This practice is questionable in regard to the park and recreation agency's accountability for all funds collected by individuals or groups using the agency's name or facilities.

Because funds are collected under the guise of a public tax supported agency, it is reasonable to assume that the park and recreation district is accountable for the collection and subsequent disbursement. Although not likely to occur, it is certainly possible numerous irregularities may take place if affiliated organizations maintain their separate bank accounts.

Incomplete recordkeeping and a lack of back-up information is a common problem with participant controlled funds. Club officers may change frequently causing a lack of continuity in fund management. If the group's treasurer or presiding officer leaves the community, dies or has a "falling out" with other members, questions may arise regarding the correctness of the funds. Purchasing procedures, including the use of receipts is almost always lax. The safekeeping of the monies in between deposits may be a cause for concern. Groups may incur bad debts or receive a bad reputation among vendors for slow or inadequate bill paying procedures. Inappropriate items may be purchased and there is always a chance of gross misuse of funds.

Even yearly audits of independent accounts by the park and recreation agency's auditors cannot insure proper fund management and if irregularities are discovered, who is ultimately held responsible?

No park board or administrator wishes to question or doubt the honesty or intent of an affiliate group. There is little doubt the group is attempting to serve their members and their interests the best they can. However, as public officilas, we are accountable and responsible for the mangement of all income and expenses of our agency and this responsibility requires much of our attention.

A consolidation of Activity Accounts into a Program Activity Fund, administered and reconciled by park and recreation department personnel and annually audited with all agency funds is a recommended solution to the problem of booster and affiliate group fund management.

Program Activity Funds should be maintained separately and not co-mingled with other district funds. Monies cannot be spent without the authorization of group officers whose names are on file with the agency's business office. Purchases are handled in the same manner as are department purchases, including appropriate purchase orders, receipts, bidding guidelines, and other approved purchasing procedures. All funds collected are immediately deposited and receipts issued.

The question of loss of interest will most certainly be asked by those affiliate groups who earn large amounts of money and may have depended upon interest revenue in the past. Consultation with group officers can determine future cash needs for upcoming activities and incurred expenses, thus allowing a specified amount to be invested along with other agency funds. The interest earned at maturity is then returned to the group's account.

Monthly, the group will receive a statement of all income and expenses for the month, including interest earned, funds invested, and the current balance. These figures may be compared with those of the group's treasurer as a back-up system.

Although initially the establishment of a Program Activity Fund may be more time consuming

Illinois Parks and Recreation 12 September/October, 1977

than the separate and independent bank accounts and may cause some hard feelings or questions of honesty from the affiliate groups, in the long run, the park and recreation agency and affiliate will realize the benefits of this form of accountability. Commissioners and administrators, who by law are bound to be responsible for all revenue collected by or through their district, will sleep more comfortably at night.

Illinois Parks and Recreation 13 September/October, 1977