Cash a magnet

It was great to attend the Club’s Annual Conference in Rotorua. I enjoyed catching up with those I have visited in the past, and those who will be calling upon my services in the future.

Unfortunately theft from clubs remains a significant problem. Today, somewhere, someone is stealing from a club. Every time I am called in to find answers to the loss of club funds I am reminded about the need for robust controls and systems to detect and prevent fraud. Those that don’t have good systems will become a victim sooner or later, just as those who leave the windows and doors to their house open will one day find their TV, and everything else, gone.

Clubs in particular need good systems because it’s a cash business. System audits are not done to get rid of managers or to catch them out on something. They are about working with the club manager and committee to prevent fraud and make it easy to identify when it does happen. System audits:

– Establish a clear money trail. You should be able to track the flow of every dollar that passes through the Club. I call it a money snail trail.

– Make sure things are done efficiently by using the latest technology.

– Make things more transparent. Every club has the gossips. Making things totally transparent takes oxygen from those who having nothing better to do than undermine the good work of others.

All clubs should have their management systems reviewed at least once every three years. That review will reveal any holes that can be exploited and reveal which systems are not being put into practice.

I have been doing system audits for 15 years. In every case theft has been reduced as a result – would be thieves know things are so tight they won’t get away with it.

I have the advantage of looking at a clubs accounting and control systems as an outsider looking in. Sometimes fresh eyes will see the tell-tail signs in the behaviour of a staff member or a manager that those working within the club cannot see. I come in with no preconceptions and without any relationships that may influence my judgment.

In my view committees are not doing their job if they are not regularly reviewing their systems. Club officials have a responsibility to protect club property. Good systems protect club cash.

Joanne Newman is New Zealand’s leading authority on club accounting and forensic auditing. She is the managing director of Club Accounting & Investigations Ltd and Smart Business Centre (Tauranga) Ltd.

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