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CEUDA Branch Treasurer's Kit - Rule 15 Finances, Sec.16
Notes regarding financial presentation of statement of revenues and expenditures
Purchases of GIC's, Term Deposits, Savings Bonds or other investments cannot be considered operating expenditures and therefore should not be included on the Statement of Revenues and Expenditures. The purchase of such investments are the transfer of funds from one savings vehicle to another and are properly reported as Balance Sheet items only. For example, the purchase of a $5,000.00 GIC would reflect in a decrease of $5,000.00 in "Cash on deposit" and an increase of $5,000.00 in "Investments". Since both items appear under "ASSETS" on the balance sheet, the results of such a transaction has no effect on "TOTAL ASSETS".

Interest received on investments are properly reported as interest revenue on the Statement of Revenues and Expenditures.

Branch financial records should be maintained on a cash basis. As such, expenditures are recognized when they are paid and not at the time they are incurred. Similarly, revenues should be reported when they are actually deposited into the branch bank account. When preparing the year ended financial statements no provision should be made for accrued charges or dues receivable.

If your Branch budget provides funds each year for the National Convention, it is appropriate to reflect the amount budgeted as an expenditure on the Statement of Revenues and Expenditures. The Convention Reserve under Liabilities on the Balance Sheet is then increased by the amount reported as an expenditure each year.

All National Convention expenses must first be taken from the Convention Reserve when they are incurred. Any excess costs over the amount of the reserve fund may be reported on the Statement of Revenues and Expenditures.

Balance Sheet
Assets	These accounts are used to record and report cash and other assets held by the Branch.
Cash on hand	This account records petty cash or other cash fund balances kept on hand to pay small incidental expenses which do not warrant the issuing and recording of cheques.
Cash on deposit	This account records the total funds on deposit in savings or chequing accounts with the Branch's banking institution.
Investments	This account records the amount of GIC's, term deposits, Treasury bills or other investments of the Branch.
Furniture & Equipment	This account records a nominal amount of $1.00 in recognition of the furniture and equipment owned by the Branch. Since the Branch pays no taxes and therefore is not subject to taxation requirements with respect to the recording and amortization of fixed assets, all costs to acquire fixed assets should be recorded as expenses at time of acquisition.
Liabilities and Members' Surplus	These accounts are used to record and report liabilities (amounts owing) by the Branch to three different and distinct sources. Firstly, there is the lending institutions or the National Office, secondly there is the reserves, and thirdly there is the members' surplus.
Loans, Advances payable	This account records the total funds borrowed by the Branch to meet current operating funding requirements. Often these funds are provided, interest free, by the National Office and are paid back through regular deductions from the monthly dues forwarded through direct deposit to the Branch bank account.
Convention reserve	This account accumulates the amounts transferred from the operating funds towards anticipated expenses to send observers from the Branch to the National Convention every three years.
Members' surplus	Basic accounting principles state that every dollar in assets belongs to someone. Therefore, any funds not needed to pay off loans or meet future obligations, belongs to the members. It is the balancing figure required to match assets to liabilities. These funds are accumulated in members' surplus and represent the funds owing to the membership of the Branch.

Statement of Revenues and Expenditures
Revenue	These accounts are used to record and classify revenue received by the Branch.
Branch Dues Revenue	This account is used to record the monthly Branch dues revenue. The income is recorded at the time the dues are deposited into the Branch Bank Account by the National Office.
Interest	Interest earned on bank accounts, term deposits or other investments of surplus operating funds or funds set aside in Convention reserve.
Other	All income not conveniently classified in previously described accounts.
Expenditures	The accounts in this group represent all the costs pertaining to the operations of the Union and are divided according to principle activities.
Members Travel	This cost centre is used to record all expenses incurred by /Per Diem members while on Union business. Such expenses include meal and mileage allowances, taxis, parking, air/train/bus fares etc.
Steward/ Local Meetings	This cost centre is used to record costs pertaining to the holding of meetings. Such expenses include rental of facilities, LWOP, travel to attend meetings, refreshments etc.
Training/ Education	The costs paid to attend or conduct, members or steward training. Also included are purchases of publications, training manuals, Safety & Health Manual, etc.
Telephone/ Postage	Amounts paid to telephone companies for toll charges, equipment rental, and communication services, regardless of whether used by or costs incurred by Executive or members while conducting Union business. Such costs include cellular, fax and paging systems. The cost of all types of postage and courier services used by the Branch.
Stationery/ Office	All supplies, such as stationery, accounting forms, printed matter, duplicating materials and a wide variety of office supplies. It also includes any printing costs associated with the Branch newsletters, etc.
Honorariums	Amounts paid from Branch funds in accordance with Branch Rule 17.
Transfer to Convention	Amounts set aside out of the operating funds to fund Branch members to attend the National Convention as observers.
Bank Charges	Bank service charges and interest paid on bank overdraft, line-of-credit and other short-term loans.

Instructions to Auditors

Introduction

The CEUDA Branch Rules require that the financial records of a Branch be audited annually or when one or more signing authorities resign. Branch Rule 15, Section 1 stipulates that the appointment of the auditors is the responsibility of the Branch Executive. In recognition of the fact that the appointed auditors may not have accounting background and may require some guidance, the CEUDA National Office has developed these Instructions to Auditors for inclusion to the Branch Treasurer's Kit to provide some guidelines and direction, which should be of assistance in the completion of their duties.

Function of Auditor
The auditor should be aware that he/she is not required to verify every financial transaction that has occurred during the fiscal term being audited. In fact, an auditor is required only to perform sufficient verification as to be able to state that the financial records and statements of the Branch are materially correct and reflect the fairness of the position of the Branch at the time of the audit. For an auditor to verify the accuracy and authenticity of every financial transaction that occurred during the period being audited would require the auditor to duplicate the work already done by the Treasurer. This is costly in both, time and effort and is of little or no value to the Branch.

The presentation of the Financial Statements is the responsibility of the Treasurer and not that of the auditors. However, should the auditors find that the Statements do not conform to acceptable accounting standards and/or are not prepared in accordance with the Branch Treasurer's Kit, they would be required to report this to the Branch Executive.

The auditors are cautioned not to question how and where monies have been spent as this matter falls within the constitutional authority and jurisdiction of the Branch Executive. The auditors are required only to verify that proper authorization to spend monies was exercised and that the expenditure was correctly recorded.

Methodology for auditors to follow

Step 1

Obtain from the Treasurer the following items:

a.	ledgers and journals for the period;
b.	paid invoices and expense accounts;
c.	deposit slips;
d.	bank statements, cancelled cheques, GIC's and Term Deposits;
e.	minutes of all Branch Executive, Stewards and General Membership meetings;
f.	complete financial statements for the period;
g.	copy of Branch Rule 15; and
h.	Branch Treasurer's Kit.

Step 2

Confirm that appointment of the auditors conforms to Rule 15.

Step 3

Verify that bank statements, savings pass books, GIC's and Term Deposits actually reflect balances presented in the Branch ledgers and financial statements.

Step 4

Verify 100% of the largest disbursements reflected in the records (approximately 10% of all disbursements). The balance of transactions should be verified on a random selection basis. You must confirm that:

a.	each transaction has been properly authorized;
b.	correctly recorded; and
c.	the cheque made in payment is signed by two authorized signing authorities.

Step 5

Select at random one or two months' bank statements for verification. All cheques listed on the bank statement should be on hand. Verify that:

a.	all cancelled cheques have been properly signed and endorsed;
b.	all bank charges are consistent with banking activities;
c.	all bank account debit/credit entries with respect to the purchase or sale of GIC's, Term Deposits or other investments are in full agreement with the investment receipts (i.e. dates of purchases and sales should coincide with bank withdrawals and deposits); and
d.	bank statements reflect deposits in accordance with the copy of the deposit slip.

Step 6

Confirm that the financial records have been maintained in accordance with Branch Rule 15 and that the Balance Sheet and Statement of Revenues and Expenditures have been prepared in accordance with the Branch Treasurer's Kit.

Step 7

Scrutinize the minutes of all Branch Executive, Stewards and General Membership meetings to insure that all motions involving financial matters have been properly executed.

Step 8

Sign the auditor's report on the bottom of the Balance Sheet.