How to Improve Internal Accounting Procedures for College Foundations

College foundations play a critical role in creating opportunities for students, but managing the internal accounting procedures of those organizations can be complex. In this fourth and last video in our college foundations series, Dan Swanson, shares his perspective on the unique challenges and opportunities college foundations face. Dan discusses best practices for financial reporting, common issues foundations encounter and how clear communication can help organizations stay focused on their ultimate goal, which is supporting students through scholarships and funding.

Transcript

Welcome, everybody. I’m very excited to be here today. My name is Dan Swanson. I am an assurance manager here at Cray Kaiser. I’ve been with the firm for about 12, 13 years now, and I wanted to talk about a subject matter that I’m very passionate about, and that is college foundations and some of the important factors that we need to be considering, some of the hot topic issues. I want to talk about some success stories, some issues that they commonly face.

One of the reasons I’m very passionate about this, because we always hear that question, if I wasn’t an accountant, what would I be doing? I’m a big fan of education. My parents were teachers. I have brothers that are teachers. So if I wasn’t an accountant, I would be a teacher. So by serving these college foundations, I feel like I get the best of both worlds. I’m helping students while getting to use my accounting knowledge and expertise. So it’s very near and dear to me.

So I wanted to kind of talk about foundations and how we here at CK have helped foundations on a number of different areas. So where I think Cray Kaiser can really add value and where I believe sets us apart from either having an internal full-time person or another outsourced firm, assisting with the monthly accounting is I’m a big fan of the education piece and the communication piece.

So what I always try to do is explain to the foundation and the staff is here’s what I’m doing. Here’s why I’m doing it. And here’s kind of the end game. Here’s the goal. Start with the end in mind. So here’s what we’re trying to get to. But in order to get there, we got to do these three, four, five things. So really helping them understand my process or CK’s process. Here’s how we’re going to go through it. Here’s how we’re going to work through it. I think really helps them understand kind of the efforts and what it takes and the value that they are getting from this.

Because I don’t ever want to be just an expense item on their income statement. I want that to have meaning, to add value. If we’re just a necessary evil expense, then I feel like I’m not doing my job. But if we can help them add that value, then it’s a win-win.

So again, that’s educating them along the way, communicating with them. And really kind of strategically thinking, how do we make things better? How do we make the financial statements more transparent? If there’s this big manual, Excel manual process, how do we let the system do that heavy lifting? Because if there’s a time-consuming manual process, what happens? We’re all human. We all make errors. So if we can let the system do those, automate it, utilize the system to automate those tasks, our consistency and our errors are going to improve.

So again that’s I think where we can come in since we’ve worked with these systems, we know how they work we know how they operate we know how they think so let’s lean on that to streamline processes, streamline these manual processes and then educate.

That’s where I think we come in to improve is if you have a question ask. You know the old Who Wants to be a Millionaire game show. I want to be your “phone a friend”, if you have a question, give me a call and we’ll talk through it. I’m a big fan of let’s just get better. So just because we did it last month doesn’t mean we’re going to hit cruise control and do it the same way the following month. Consistency is key, but can we improve? And so let’s work together to always get better, always get more transparent, and let’s continue to have those conversations with the executive director, the finance committee, the board members, and let’s make sure we’re all in it together. Because again, what’s the goal? What’s the purpose of these foundations? Let’s raise money. Let’s raise donations. So we have tons of scholarship funds available for students. That’s the goal so let’s keep the goal in mind and so that’s and how do we get there? Again, that’s education communication and constant improvement.

So that’s what I try to bring, that’s what Cray Kaiser tries to bring, is that winning successful attitude. Other issues that I see or that we can help out with I may have mentioned just timeliness on monthly financials. So how do we get to you by the 20th of every month. Those month end financials are done and closed. So us being auditors and us  understanding the importance of internal controls and processes, when you come to Cray Kaiser, we can kind of plug in that mentality and really help you streamline your month end closes.

What are some best practices? What are some great work papers? What are some great recs that we can do? We can help meet with your staff there and kind of help train them, help guide them, help empower them to do some of that work ahead of time. We’re happy to do it, but we’re also happy to help train and guide your people internally, so they know how to do it moving forward, as well. I really want it to be a team atmosphere. I want to educate you along the process. Here’s what we’re doing. Here’s why we’re doing it. And this is why I think it’s going to help everybody here. So that’s kind of the time. Yes, we’ll set a schedule. This is what we want to do. And this is how we’re going to do it. Do we always meet that? No, there’s always issues that come up, but we can work through them.

So from some of my past experiences, that timeliness of financial reporting wasn’t being done or there’s a transition. This long time finance position person is retiring and we’re having a hard time finding a new person or training a new person, so that’s where since we have the experience here can kind of come help in and either bridge that gap or even be that outsourced kind of finance position to help you produce accurate financial statements, either quarterly, monthly, whatever you need, so your finance committee, your board, can review and approve, etc.

Here’s a scenario where Cray Kaiser was able to step in and provide value. So there was a longtime financial person in the shoes that we are at now who retired. What happened was they retired and then that transition did not go well and so they were five to six months behind in their financial reporting. They were months behind in entering payables into their accounting system and they were months behind in just simply cutting vendor checks. So it’s kind of triage, what are what are the key items, the key problems, the key sources that you need us to do.

So I still remember day one us simply going out there and looking through their vendor payables, entering them and cutting checks was a huge win. Just that simple task was a big win just because that transition for whatever reason did not go well. But again with us and our knowledge with nonprofits, our knowledge of accounting principles, our knowledge with working with different systems, we were able to quickly step in kind of see their system that we weren’t new to, understand it and start just simply cutting checks. Sweet! Day one we got a win. Okay, now tomorrow let’s come back. Okay, what else what else is on your mind, what else hasn’t been done, what else is of super importance. You tell us what you need us to do we don’t want to ever just assume and do things so you help us understand your struggles and we’ll provide solutions or provide help where we need it.

So again there was the just simply cutting checks and then just bank reconciliations. In the accounting world that’s key. Can we get timely bank reconciliation done? Again five, six months behind and a simple, quote unquote, simple bank reconciliation. So that was on their mind. So let’s make sure we understand that process and get that moving forward and get that scheduled out.

I keep talking about the investment piece. So again, as foundations, depending on the size, that they could have millions of dollars in investments that have earnings each month. So how do we make sure that these earnings are being appropriately allocated to these 200 scholarship funds? Are all those scholarship funds included in those earnings? If there’s a new endowment, how do we make sure that new endowment is now added to that pool?

So it’s kind of going through a whole list of scholarships or endowments. What should be part of that earnings pool? And is it in there? And what are some best practices to track that moving forward to ensure as new ones are added, they’re added timely. As new money comes into the foundation, how do we make sure those new funds are invested in a timely fashion? So again, that’s where that internal control processes, best practices come into play. And that’s where I think Cray Kaiser does a good job stepping in and just having those discussions to make sure we’re aware of all the issues so we can address them one at a time.

As accountants, as CPAs, I kind of say, we have that strong accounting foundation, that accounting base. So we have a step up on working with new accounting software. We already know what the answer should be because we’re strong accountants. So how do we get the system to do what we know the accounting needs to be? And if you can kind of have that strong accounting knowledge, it makes utilizing that system that much better.

So if you made it this far in my video presentation, I want to thank you for staying. If you have any questions that you would want to ask me, please feel free to reach out. You can go to the Cray Kaiser website. And you can find me. Again, I’m Dan Swanson. I’m an assurance manager here. Again, I’m very passionate about foundations and the importance of solid financial reporting. Over the years working with them, I think I’m pretty good at it. And again, I always think of what is their mission, what is their vision, what is their value of these foundations? And at the end of the day, we want to provide opportunities, funding for students.

Again if I wasn’t an accountant I would be a teacher and educator so working with these foundations, I get the best of both worlds. I’m able to achieve both of those dreams. So again if you have any questions, if you’re seeking more information, hey, if you just want to talk to me for a half hour I’d love to help. So again please feel free to contact me all that information is on the Cray Kaiser website. And again, thanks for staying on if you made it this long.