Posts Tagged ‘Best Practices’

Has Your Bank Debit or Credit Card Been Hacked?

Posted on Monday, November 14th, 2011

by Jeannie Huckstep, CPA, CITP

I never thought about the answer to this question until just a couple weeks ago.  I received a call from my bank, indicating that there had been a 5 cent charge from on my debit card that morning.  They first asked if my debit card had the last four digits of “xxxx”.   And, the numbers the person reeled off were correct.    The question was posed to me as to whether I had initiated the 5 cent charge or not.  Of course, I don’t put items of that nature on my debit card, so responded “No”.  And, given my type of work, I am aware that typically charges of that size are the first visible sign of fraud against your account.   What I wasn’t thinking of as I answered “no” to the question was the possibility that the call itself might be fraudulent.

However, that thought did enter my mind when the caller reeled off the last four of the debit card number, and started asking me to confirm all sorts of things.    The lights came on, and I simply let the caller know that I wouldn’t be answering any further questions, and would place a call to my bank.    It was an interesting interaction.    The person who had called was very friendly, gave me the number to call at the bank, and suggested I make that call in short order.    The number provided was the actual customer service number listed on the debit card.

My bank was a small bank when I began using them some years back, but they have sold to a larger organization that is based in the Southern states.   However, I do still deal with local staff, and that is who I called – someone I knew.   The person with whom I made contact had no knowledge of potential fraudulent activity on my personal account.    Nor, did they believe that the call I was describing had been made by bank personnel.    They advised that all was OK, and I should simply not have concern.

BUT – that was a pretty serious issue of concern in my book, and I ultimately made a call to the operations section of the bank, and asked them to simply deny access to any debit charges on this personal account and issue a new debit card.   Given whatever activity resulted in the call to me regarding debit card activity, I was not happy with that advice, and did ask them to go ahead and cut off access to that card, and re-issue a new one that I have since received.

Yesterday, I received another call from “someone” again indicating that there was fraudulent activity on my debit card.    It was an 800# call, so I did not answer.    I’ve learned my lesson – we should not answer 800# calls that come into to our Cell Phones!!!     This one left a voice mail requesting that I call a number that WAS NOT the number for customer service on the back of my new debit card.    I didn’t even bother calling the actual customer service number on the card this time.       And, today, I went to my bank website, and saw that they had a “red flag” warning relative to “phishing” calls relative to bank accounts.

So, the Moral of the Story?     Absolutely, do not respond to queries of this nature when you receive calls from individuals purporting to be helping you to keep your bank account, credit card, debit card, or other card Safe from Scammers.     Hang up immediately, pull the card that has been questioned by the caller, and make a call to the customer service number that is displayed on back of the actual physical card.   Make absolutely certain that you question the bank as to whether the call you received was made by the bank’s fraud department.   If their response is NO, as it was in my case, I would cancel the card.

We never know for certain how the caller gained access to the information that they have asked you to confirm, and you may inadvertently have confirmed personal information for the thieves.    Given our dependence upon electronic means to handle our accounts from afar, it is definitely a hardship to cancel the card and wait for a new one to be issued.     But – it feels really very good to have avoided a significant mess, and learned from the situation!      Do NOT give unwelcome callers a chance to do Harm!


Freeing nonprofit, government and for-profit organizations to focus on mission and strategy, Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Minnesota, Missouri, Kansas, Nebraska, Oklahoma, Texas and Wisconsin.

Cost Allocation – What about your written plan?

Posted on Monday, October 3rd, 2011

by Jeannie Huckstep, CPA, CITP

Cost allocation is a terrifically important project for every accountant who manages federal grants.     In our work, we are often called upon to implement a cost allocation plan as a part of a software implementation.    My process always starts with this question:     “Could you please send me a copy of your current written allocation plan?”    And, typically, my question is met with silence, or a “deer in the headlights” stare if I’m on-site.

As a result of that initial question, and my subsequent experiences with clients all over the country, I’ve come to the firm conclusion that only the “best of the best” have that plan document that has been drafted initially, updated annually, and then observed faithfully.    The requirements for allocation of administrative costs to federal grants are contained in OMB Circular A-122, and are stated very clearly.

It’s really not that difficult, as the circular only requires that your processes are reasonable.    Virtually every one of the clients that I work with currently allocate their administrative costs in some manner, and virtually all have the written plan document in place.    I always caution them to create a reasonable plan for their organization, and to avoid what I call “splitting hairs”.

It’s the new ones that I haven’t yet had the opportunity to visit with about cost allocation where I see the lack of attention to this significant compliance area related to their grants.   In my initial discussion regarding allocation of administrative costs, I urge them not only to plan the process, but to document it, review periodically, and then document the review.   My current clients have all been through that discussion/exercise with me, and we continue our cost allocation discussion through our regional Sage Nonprofit user groups, our annual High Road to Success user conference, and other communication avenues that we employ to stay connected with our Sage NonProfit clients.

The reality is that with the appearance of the ARRA Funds at the beginning of the recession, and their enhanced compliance requirements, cost allocation became more of a target of interest to both auditors and monitors.     And, we believe that initial interest through the substantial compliance requirements of the ARRA Funds has become the “new normal” in the grant funded world of the nonprofit organization.    So, this is a very important area.

Are your cost allocation processes and procedures documented, and reviewed annually?    If not, your organization is at risk when the monitor or the auditor visits.    You want to be certain that your processes are in place, that they are consistent from period to period, that they are reasonable, and that they are well-documented.      The ultimate goal is to make it easy for the auditor or monitor to verify that you are performing the procedures in the manner prescribed by your written plan, and that your plan meets the requirements of OMB Circular A-122.


 Helping nonprofits, human resources departments with fund accounting and HRMS software, reporting, and accounting services; Huckstep & Associates assists organizations throughout the central United States from Minnesota to Texas and Colorado to Michigan.

Should You Consider a New Accounting System in the Current Economy?

Posted on Monday, August 1st, 2011

With all of the current cutbacks to federal grants, an organization might be thinking that spending money to “reinvent” their accounting system isn’t a good idea.   But, the reality is that if there is budget to make it happen, it’s really the perfect time.

Virtually all of our clients experienced the significantly enhanced compliance requirements that came along with the ARRA funds that were brought about to boost the economy during the worst of the recession.     Clearly, organizations had to boost their compliance efforts as well during that time.    All things considered, we believe that we will see the level of compliance requirements that came about with the ARRA dollars become the “New Norm” with federal and state grant funding.

Actually, funders of all types are much more discerning today in the ways they look to spend their precious dollars.   And as they review the grant proposals they receive, they are looking for the most bang for their buck.   That means that they want to fund “the best of the best” operators to deliver the services that they intend to provide.  That means as they pour over the applications, they are looking at your historical program operations, the successes, and, of course, the failures if there are any.

But even more, they are looking at how you manage your business.   Does the financial information that you provide look organized?  Is it complete?  If they ask you to provide financials by grant, and by month for the prior year, can you prepare their request quickly and easily?  Or do you have to print a trial balance and then pick out the numbers from that, and then prepare the requested information using Excel?   When you have to take numbers from your trial balances, and manipulate them into financials, there is a huge margin for error.

We are in the age of technology today, so you don’t want to be left holding the bag when you are met with a serious request for information when you are in the middle of negotiations for additional funds for your programs.   Fund accounting systems put information at your fingertips by tracking each of your grants as if it were a separate company.  So there is no commingling of funds, no mixing of various dollars, no need for a programmer to generate your reports, and you have the world of your accounting system at your fingertips.

With a true fund accounting system, it’s clear that you have your act together.  And, it’s that – that puts your organization in the best light in the eyes of a potential funder, whether that is a federal or state grant, or simply a local Foundation that provides dollars to provide services of some type.

The bottom line is this:   There has never been a better time to take stock of your financial accounting system, and move into the “New Norm” of compliance.


Specializing in accounting services, nonprofit fund accounting software, human resource management systems (HRMS) and reporting, Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Minnesota, Missouri, Kansas, Nebraska, Oklahoma, Texas and Wisconsin.

Your Accounting System –Isn’t it supposed to replace manual processes? Part I – Reporting

Posted on Sunday, May 8th, 2011

by Jeannie Huckstep, CPA, CITP

When we begin a discussion with a prospect as they are considering a replacement of their current system, or have already decided that they want to move to the Sage MIP Fund Accounting product, we always begin that discussion with several questions.     We begin our discovery process with these two.   The first is:  How much work is your staff doing manually to compensate for the inflexibility, and inability of your current system to encompass all of your reporting needs?   The next question is this:   What are they doing manually, or on Excel spreadsheets, that your current system simply won’t handle in an electronic manner?

The answer to the first question always revolves around reporting.    And – the list of points I’ve heard in answer to this question is long.   Most often, staff within the organization is required to print a trial balance from their system, and then resort to a spreadsheet to put the pieces of information that the trial balance provides together in the required presentation format.   Can you imagine the work hours required if the organization has 30 grants on which they need to create monthly reports for the funders or the grant managers?

Typically, someone on the accounting staff prints the account code information, and then locates the information for the appropriate grant (if it exists within the accounting system), and then combines the numbers onto a spreadsheet that is formatted appropriately for presentation.   What an inefficient and unreliable way to do business.   Anytime manual processes are involved, they are prone to the normal “people” errors that simply go away when an electronic process is utilized.

If your staff has to use manual processes to overcome the shortcomings of their current system, it’s time for a change.     Very clearly, the technology is available TODAY to replace manual processes of this nature with appropriately designed electronic processes.

Please let us know if we can help you eliminate tedious, time-consuming manual processes.


Freeing nonprofit, government and for-profit organizations to focus on mission and strategy, Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Minnesota, Missouri, Kansas, Nebraska, Oklahoma, Texas and Wisconsin.

The 4 Audiences Who Will Cheer When They Receive Better Reporting from You

Posted on Friday, March 25th, 2011

The past few years have been grueling ones for nonprofits and you need look no further than your own finance department to see the evidence.  As CFO or Controller, are you spending most of your time gathering data from multiple systems, and juggling multiple spreadsheets?   Are you spending longer hours compiling the financials and yet your month-end close times are getting longer and longer?  If your answers to those questions are “Yes”, it is time for a change – a long overdue change.   Here is a short list of those who will definitely “Cheer” as you bring change to your organization.

Board – sometimes the board really doesn’t recognize their fiduciary responsibility with relation to the organization for whom they are invited to become a member of the board.   But the reality is that with all of the controversy that came about as a result of the Enron/WorldCom situation, potential board members are definitely much more likely to educate themselves with regard to the potential risk they take when they accept a seat on your board.   They will definitely “Cheer” when they see that you, as CFO, are doing everything you can to keep them well-informed with regard to the financial status of the organization.   Provide them extensive reports that are printed directly from your accounting system.    That is definitely the “Key to the Cheer”.

Auditor – these guys really won’t cheer – after all, they are accountants J.    But –the reality is that when the auditor gets the documentation they need from the client, and everything they are handed makes sense, they get that nice warm fuzzy feeling that all is likely OK at your organization.    They see you as competent .    They will spend some time confirming that perception, certainly.   But, since you really are “taking care of business” – your life during the audit will be easier.  You will be the one cheering at that point.

Donors – There’s so much in the press these days with regard to negative things happening within organizations, that donors now are watching the news.    You want to make certain that if you find yourself in the press, that it’s for the good your organization does in the community.    When donors see/hear good news, whether it’s on the front pages of the newspapers, or from the newsletter you send out listing all of the clients you’ve served over the last month, they won’t just cheer, they will increase their donations.

Funders – In many organizations, the funders need to be at the top of your list of those you really need to express.    If during their reviews of your organization, they see competent staff, with full reporting capability from your accounting system, they will “Cheer” as you bring change to your organization.    When you look good by way of your stewardship of the funds they have awarded, and you manage with serious competence, remember, they look good as well.   And, they do hold the purse strings, so it’s imperative that they are satisfied with your “tone at the top” regarding compliance.   Do we really believe that they are oblivious to the red flags going up in their heads when they see that much of your accounting system exists on spreadsheets?    The answer to that is a Definite NO!   The representative of your funder entities are more than likely accountant-types at the origin.    And, it’s likely that they feel that when they award dollars to a recipient organization, it’s like they have awarded their own dollars.

So, you see that when you really invest your time, and your position in taking your organization to the next level by way of competence in the management of the financial and compliance side of your organization, you reap pretty incredible benefits.    And – you really become essentially indispensable to your organization.   In this economy, isn’t that an incredible result of your efforts??    There’s simply nothing better for your comfort level than hearing/seeing the cheerleading section when you hit a home run with your reporting capabilities.    Let us know if we can help you develop a Cheering Section!


With headquarters in Springfield, MO, Huckstep & Associates serves clients in Arkansas, Colorado, Kansas, Michigan, Minnesota, Missouri, Nebraska, Oklahoma, Texas and Wisconsin providing sales and support for Sage Software Products, Time Keeping Solutions, Third Party Add-Ons To Sage Products, Hosted Solutions, and IT Solutions.

Virtual Servers – One-Stop Managment of Your Technology Resources

Posted on Sunday, March 13th, 2011

Jeannie Huckstep was recently published in The ASSET a publication of the Missouri Society of CPAs.

Here is a brief excerpt and a link to the full article.

With the advent of Software as a Service (SaaS) and software hosting options, we are beginning to hear a lot more about virtual servers and desktops.  With virtualization, you can gain relatively the same functionality, typically as a significantly lower total cost of ownership, while at the same time lowering the burden on IT staff and resources.  With utilization of virtual servers and Internet backups, you gain significantly increased reliability, much higher functionality, increased staff productivity and greatly reduced computer down time.



Helping nonprofits, human resources departments with fund accounting and HRMS software, reporting, and accounting services; Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Missouri, Nebraska, Kansas, Oklahoma, Minnesota, Texas and Wisconsin.

Records Retention – 3 Problem Areas You need to Avoid

Posted on Tuesday, January 18th, 2011

When it comes to record retention within your nonprofit did you know that there are three ways you can run into problems?

1.       If records are not kept long enough, there is a problem.

2.       If records are kept too long, there is a problem.

3.       If there is no documented policy and you are not managing record retention to that policy, there is a problem.

It was the lack of compliance with the records retention policies that caused serious difficulties for the firm involved with the Enron collapse several years ago.   The reality is that your Records Retention policy is not something that just sits on the shelf.   It really is a living/breathing document that needs attention – not just relative to an annual review of the document, but also to the execution on what those policies actually say.

Clearly, either paper or electronic files must be kept as long as they serve a useful purpose for the organization, or as long as required by legal and regulatory compliance authorities.     For a nonprofit organization where funding is provided by federal and state grants, the retention requirements are typically stated within the grant award documents, or by the funding department.

Finding an appropriate records retention guideline is as simple as a Google search.   Of course, it’s important to consider the source, but the following is a link to the American Bar Association list of resources for appropriate guidelines based on the type of organization, or simply to find an overall legal view of the issues with document retention:

Many organizations think of document retention as only paper documents.    But – the reality is that your policy should cover not just paper documents, but also electronic files.   And, the commonly accepted theory is that you need to destroy the documents as soon as they meet the destruction timeframe as listed in your formal records retention policies.

So, how does a policy of this nature play out in the day-to-day world we all live in?    A practical approach is that you create a file listing with each type of document that is important to your business, and the creation dates are noted.    At the same time, you note the destruction date.   For instance if your AP Invoice retention guideline is 7 years, you would now be handling the destruction of AP Invoices for 2003.

The policy needs to define the time period under which the policy is executed, on an annual basis at a minimum.   Our firm policy indicates that in July each year, our office manager is tasked with reviewing the policy and listing each file that currently meets the destruction deadline for this year.    She then pulls the appropriate documents, and makes the appointment for the shredding company we have engaged to come to the office, and shred.     It is definitely a big job, but a terrifically important one.


Freeing nonprofit, government and for-profit organizations to focus on mission and strategy, Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Minnesota, Missouri, Kansas, Nebraska, Oklahoma, Texas and Wisconsin.

Best Practices, NonProfitNew Year’s Resolutions Part I – Introduction

Posted on Thursday, December 23rd, 2010

Well – it’s been an interesting Year!    And, 2011 is upon us.    So – what do we plan to do differently in 2011?

There are lots of areas to consider, and over the next few blog entries, I’ll be looking at, and discussing, those that certainly I believe are seriously important to your accounting system.    For instance, we’ll be looking at records retention, backups, month-end closes, cost allocation, manual processes, and various other areas where we believe there is room for serious improvements to your processes and procedures.    We’ll be talking about audit concerns as well.

While the economy has been lagging, technology has been in a serious fast-forward world over the last year or two.    Who would have thought that the iPad would sweep the world?   Who would have thought that we could now purchase an external hard drive with a 500GB capacity for just over $100?    Who would have thought that we would be using smart phones with huge screens, wi-fi capability, ready access to our e-mail and our office servers?     It’s absolutely amazing!

But, with the amazing part comes incredible complexity, ease of use, and excitement (depending upon your tech comfort level).

Bottom line, is we are all “drinking from the fire hose” these days.    There is more information that is being disseminated than most of us can ever understand.   But – just like the economy, and the world in general – life is changing.    And – we “gotta get there”!   But – most important is that we have to strengthen our processes and procedures, so that no stone is left unturned.

Join us over the next few weeks as we decrypt several of the latest issues into layman’s terms, and help you to understand the changes that have either already happened, or are imminent.

We invite you to join the conversation!     It is our intent to discuss what we see, but we really need the input of those who either agree, or would love to disseminate an alternative opinion.    It’s only through discussion, as well as consideration of alternative ideas, that we grow!

For now – catch us same time – same station – January 1, 2011!


With headquarters in Springfield, MO, Huckstep & Associates serves clients in Arkansas, Colorado, Kansas, Michigan, Minnesota, Missouri, Nebraska, Oklahoma, Texas and Wisconsin providing sales and support for Sage Software Products, Time Keeping Solutions, Third Party Add-Ons To Sage Products, Hosted Solutions, and IT Solutions.

What is the role of the Sage Business Partner (BP) and why do you need one?

Posted on Friday, December 10th, 2010

Sage Software is a leading giant in the development and distribution of business related software products.  Sage relies on authorized Sage Business Partners to sell and implement Sage software solutions like Sage MIP Fund Accounting, Sage Abra HRMS, Sage FAS, to name just a few.

Not all Sage BPs are the same.  Here are some questions to consider as you consider which BP is right for your organization. Which Sage products are represented by the BP? How important is the location of the BP?  This is the era of electronic communications and with remote access through such services as “GoToAssist” a BP can many times address your problems remotely, more quickly than driving across town to your site!  How well does the BP in understanding your needs and adequately addressing solutions to meet them?  How long has the BP worked with the Sage product that is being considered?  What do other customers have to say about their BP?  Ask for references and by all means check them out!

Your Sage BP can help you identify the best solutions for your needs; they can handle your acquisition of the Sage software, assist you with step-by-step implementation, and offer training that makes your staff confident and proficient on the software. After all, the Sage software solutions we work with are very robust and deserve the most effort with their implementation processes. As your Sage BP we want you to receive the best return on your investment. We strive to understand your total business and address your needs appropriately.

The decision to select the right BP is every bit as crucial as selecting the right software solution. Make sure that you select a partner who is committed to your success and has the expertise to get you there.


Helping nonprofits, human resources departments with fund accounting and HRMS software, reporting, and accounting services; Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Missouri, Nebraska, Kansas, Oklahoma, Minnesota, Texas and Wisconsin.

Fraud and Embezzlement: Don’t Let it Happen to You

Posted on Thursday, November 11th, 2010

The five most dangerous words nonprofit executives can think or utter are: It can’t happen to us.  Fraud and embezzlement do happen.  Further, fraud and embezzlement is done by individuals who were believed to be loyal and trustworthy.  Fraud and embezzlement send several shocks through a nonprofit organization – shocked surprise, anger over the crime and the loss, and an embarrassing public relations nightmare.  Don’t let it happen to you.

Implementing safeguards against fraud and embezzlement is not an act of distrust, but rather a best practice that should be exercised by all nonprofit executives.

Fraud and embezzlement are the ultimate crimes against an organization.  In every instance I have seen, the actions were perpetrated by people who were highly trusted within the organization.  Once it was a trusted employee of out-of-town owners of a retail organization.  In another instance, it was the Executive Director of a nonprofit organization where there was no oversight of the executive.  There was even a case of a trusted Treasurer of a religious organization.  No one saw it coming.

The common theme has always been lack of oversight, and lack of processes, controls and procedures that would have brought the person’s actions to light through normal control processes versus the discovery of a huge amount of money missing from the organization.

Simple controls are effective

Here are examples of three simple controls that could be more than reasonably effective in uncovering wrong-doing.

  1. Have someone other than the accountant perform bank reconciliations – maybe it’s a board member, maybe it’s just someone outside the accounting office.  If you’ve balanced a checkbook, you can do bank reconciliation, it doesn’t take a rocket scientist.
  2. Conduct a careful comparison of the reconciled bank balance to the books of the organization.
  3. Review and sign-off of another reliable person within the organization of the bank reconciliation and it’s reconciliation to the bank balance displaying in the organizational financial statements.

Cash Receipts are another area vulnerable to misdeeds.  Here are three measures to put in place for Cash Receipts.

  1. Keep a log of every check that crosses the threshold of the organization.  The best practice is a log that lists every cash receipt (whether cash or check), and is totaled every day.  That total should match the bank deposit for that day.
  2. Make sure a deposit is made every day.  In an organization where there are significant amounts of cash deposited – there should be a bank deposit made every day.  I once found an embezzlement when the deposits hitting the bank were dated 15 days earlier.  Cash had been embezzled, and the deposits were only being made when “replacement” cash was available.
  3. Cash entries into the financial accounting system must agree to the physical bank deposit documentation and receipt.

I’ve also seen cases where fictitious vendors were created by someone with access to the financial system.  Checks were then issued to the fictitious vendors and sent to a bank account controlled by the embezzler.  A review of vendors within the organizations system is certainly worth routine attention.

Protect, Educate and Enlist Your Board

If you’ve read any nonprofit publication or attended a conference, chances are you saw something on Board Governance.  It’s a popular topic these days for good reason.  There is significant liability in sitting on the board of directors for a nonprofit organization, yet few organizations do serious board training, nor appropriate due diligence by way of oversight of management of the organization.  It’s unfortunate because there are so many wonderful people in the management of nonprofit organizations.

The bottom line is that an organization must have appropriate financial controls, segregation of duties, and board oversight.  Otherwise, it becomes possible that the organization finds their name on the front page of the newspapers, and a hugely embarrassing and dangerous picture of the organization evolves.


Huckstep & Associates is proud to have customers throughout the central United States including Arkansas, Colorado, Michigan, Minnesota, Missouri, Nebraska, Oklahoma, Texas and Wisconsin and specializes in accounting services, nonprofit fund accounting software, reporting and human resource management systems (HRMS).