BP 11122023 129pm - Flipbook - Page 71
all together and on the face of the IRF. We also recommend that advances not be expensed but
recorded as a receivable until proper documentation is provided to support the advance. A copy
of funds returned deposit or receipts submitted associated with the advance should be attached
and maintained with the original cash advance check support. Once documentation is provided
and/or an accounting of funds is returned, the transaction should be reversed and income
properly recorded.
FINANCIAL REPORTING 3 most festivals operate initially with a deficit, as some planning
expenses are incurred in advance of when portions of the income come in. As long as there is
sufficient working capital in the parish to fund the payment of such expenses, the parish business
manager, and the head of the festival planning group should use the monthly budget to actual
reports that come from the accounting system to best manage the variances in both expenses and
revenues.
PURCHASE ORDER SYSTEM 3 if there are major expenses to be involved, the parish might
consider using a purchase order system, and competitive bids might be received to help make
sure expenses are held to a reasonable, competitive price level.
DONATIONS 3 there may be individuals who make donations of goods or services for the
festival. Donations of goods that can be easily valued or have receipts could be considered a taxdeductible donation to the festival; however, donations of services can never be recognized as
tax-deductible by the IRS. For example, if a company donates refreshments, the receipts for
those donations could be the basis for a taxable donation but if an individual donates his/her own
services towards an effort, the labor expense is not tax-deductible.
CASH RECEIPTS 3 handling, managing and safeguarding cash is critical. The parish should
consider the controls that are described in the Accounting Best Practices document on the AOA
web site.
In general, the basis of cash controls should be based upon such key steps such as: having dual
control of cash at all times; using tamper-evident bags in the collection of cash to help ensure
that cash deposited into the bags makes its way all the way to the normal parish count team, and
then to the bank; determining how cash collection sites might be minimized, perhaps through the
use of bracelets or tickets, stamps or vouchers; having a well-thought out process for collecting
uncounted cash, using tamper-evident bags during the collection; using a drop safe for depositing
the cash collected, etc. This area should be carefully understood by the festival leaders, who
should work closely with the parish business manager to make sure that there are no lapses in
internal control. Ultimately, the cash collected, a summary of all expenses incurred, and financial
reports should all provide a thorough snapshot of the financial results of the festival.
We recommend the use of tickets to track sales so that expected revenue can be calculated to
verify all funds collected are included in the deposit. This could include a place on the income
remittance for starting ticket number and ending ticket number. You would also need to know
the amount charged (hopefully fixed fee). For example, if a spaghetti supper is $5 per adult and
71
