Steps for Improving Financial Management in Student-Managed Houses
(Issued Spring 1997/98, Updated Fall 2001)

(New Requirements Effective Fall 1998, Updated Requirements Effective Fall 2001)

Student management, as a whole, is designed to give students the opportunity to serve in leadership positions and to develop experience in managing small businesses. Collectively, Financial Managers (FMs), in student-managed houses, are responsible for managing over $5.5 million dollars a year. It is essential that FMs use sound accounting practices and regularly share information with residents so that students may be assured that their money is being spent for its intended purposes, within the house budget, and in accordance with the wishes of the house residents.

It is the role of the Office of Residential Education, through the Assistant Director for Student Management, to educate, advise and support FMs in the development of sound accounting practices and fiscal responsibility. In order to ensure the safety of student funds and to improve the financial management systems operating in student-managed houses, the following requirements went into effect in Fall 1998, and were updated Fall 2000:

A. Banking & Checking Requirements

1) FMs must have canceled checks returned with bank statements. A letter indicating this service must be sent to the Assistant Director of Student Management.

2) At minimum, the House, Kitchen and Financial Managers all must have signature authority on the house account (all should sign the signature card at the bank). A letter indicating this service must be sent to the Assistant Director of Student Management.

3) FMs may only have DEPOSIT ONLY ATM cards (the house can decide to not have one at all). A letter indicating this service must be sent to the Assistant Director of Student Management.

B. House Policies Regarding Finances

FMs must develop and write out house policies on the following:

1) Refund policy (including the amount of the house "emergency/start-up reserve" to be left at the end of every year -- recommendation is 10% of the Fall Quarter Budget)

NO REFUNDS ISSUED UNTIL AUGUST 1, 2002

2) Houses with a surplus over their "emergency/start-up reserve" must:

a) First, determine if that money belongs to a specific year of students and refund it if that is the case. However, if not:

b) Put that money into a separate account

c) Develop a plan and write a policy about its usage

d) If a surplus occurs, please inform residents that rebates or refunds will not happen until after July 1, as all house damage bills are not available until that date.

e) All expenses voted on by any house leadership groupmust be documented and posted for public view.

3) Policy regarding use and requirement of dual signatures on checks (if you require this, you must set up the agreement with the bank)

The following are Row Office suggestions:

a) All checks be signed by two staff members

b) All expenses be pre-approved by a staff member

c) All reimbursement requests be signed by the authorizing staff member

d) When issuing a blank check prior to purchase, the FM write on the check "not to exceed $ ___")

NOTE: All policies should be made in conjunction with the house and submitted to the Assistant Director for Student Management

C. All houses will be required to use QUICKBOOKS as their accounting software

1) The Row Office will BUY & PROVIDE the software (for Macs and PCs)

2) The Row Office will provide HANDS ON training in September

a) Budget templates, suggested categories and reports will be set up (FMs can customize to the house)

b) There will be a special session for FMs who are currently using QUICKEN to help them import their data into QUICKBOOKS

3) QUICKBOOKS will allow FMs to print or hand write checks

D. Maintain Financial Manager Binder provided by the Row Office

In the Fall all FMs will receive binders, organized with Row Office forms, and sections to file documents specific to each house.

1) The Row Office will provide:

a) Sample budgets and reports

b) A variety of sample forms for reimbursement and board bill payment plans etc.

c) Forms and information on placing and releasing holds

2) FMs must file the following documents in their binder:

a) Cook's employment agreement (not co-ops)

b) Supplemental Housing Agreement

c) Quarterly budgets/(rent) board bill statements

d) Monthly reports and bank statements

e) Quarterly reports and completed audit checklists

E. Monthly Requirements for Financial Managers

1) Reconcile (i.e.. balance) check register to bank statement. A copy of this monthly function must be provided to the Assistant Director of Student Management.

2) Post budget vs. actual income/expenses-to-date (including known commitments). A copy of this monthly function must be provided to the Assistant Director of Student Management.

3) Post itemized income/spending report by account. A copy of this monthly function must be provided to the Assistant Director of Student Management.

F. Quarterly Requirements for Financial Managers

1) Post budget and board bill payments (with due date, and late fees if applicable). A copy of this quarterly function must be provided to the Assistant Director of Student Management.

2) Post End Quarter Report (including accounts receivable, accounts payable and checking account balance). A copy of this quarterly function must be provided to the Assistant Director of Student Management.

3) Post Audit Checklist as described below. A copy of this quarterly function must be provided to the Assistant Director of Student Management.

G. Required Internal Quarterly Audit

An Audit Checklist will be provided and someone other than the FM must review/verify that:

1) All canceled checks are accounted for

2) There are no unauthorized withdrawals

3) Receipt amounts and purpose match what is entered in the check register (by spot checking receipts)

4) Register entries match canceled checks

5) All checks have been signed according to each in-house policy

6) Deposits and all board bills paid or noted as past due

7) Documentation of any RA or Student Manager requests

H. External Audits

In order to ensure sound accounting practices and fiscal responsibility, the Assistant Director for Student Management will be conducting random audits throughout the year.

Questions regarding these requirements should be addressed to the Assistant Director for Student Management, Stephenie Petrilla, at (650) 723-0778.

9/2001