By David Paling

David Paling is the Director of Athletics, Health, and Physical Education for Middleboro (Mass.) Public Schools, a position he has held for 23 years. He has been contributing articles to Athletic Management since 1995.

Early in my career as a high school athletic director, there was a lot to learn and there were certainly many difficult days. But one of the most stressful times in those early years was my first visit from an external auditing agency. Hired by the school district to review financial operations in several departments, the auditors provided me with a huge wake-up call about handling the financial side of my job.

Afterwards, I realized that to a great extent, I was operating in the dark ages. Receipts, paperwork that could support a variety of financial activities, and several other routine safeguards and internal controls were lacking.

I survived the experience, and worked quickly to get up to speed in the areas that were deemed deficient. Since that time, I've continued to work on ideas to keep our financial operations in order. The following thoughts are what I've learned to ensure my work will hold up to the scrutiny of an auditor.

No Cash, Please
Cash payments are a no-no. Do you, for example, pay your personnel at home football games (ticket takers, announcer, chain crew) with cash? I did, and that was the first thing the auditors noted as a problem. Established payroll procedures must be used to pay anyone and everyone. Period. That is important for clarifying who is getting paid, when, and how much.

Along the same lines, slush funds are not appropriate. Using cash for even small purchases must be avoided. Do not hand out cash to anyone for any reason.

When you don't have verifiable records for payments, auditors will question where that money went. There are more and more news reports these days of administrators embezzling money. Being accused of this offense is the last thing you need, especially if it's because you simply did not use proper systems.

Receiving cash from others can't totally be avoided, so the key here is to have a protocol in place to record the money coming in. For ticket sales, I have devised a game financial report form. On it, pre-numbered tickets are recorded from start to finish and it includes a space for co-signatures (mine and the ticket sales person) and the date and type of event. Each form used will pick up at the point where the previous one ended.

The game financial report form includes a section where free or reduced tickets can be noted, as well as any overage or shortage that may have occurred during the sales process. Tickets collected at the gate are torn in half and the stubs are placed in a dated envelope and saved.

Deposits (including night deposits) must be made to an authorized account immediately at the conclusion of the contest and deposit slips must match ticket sales transactions recorded on the game financial reports. An auditor then has several ways of assessing the accuracy of our school's gate receipts.

I learned the importance of immediately depositing money the hard way. New to the job, I would sometimes leave a cashbox full of money in my office overnight with the thought of making a deposit the following day. I came to school one morning to find the office doors removed from their hinges and a few hundred dollars stolen.

Our booster organization, which conducts fundraisers and runs the concession stand, also receives cash payments. They have a designated treasurer position within their organization, and their contributions to high school athletics are made during a formal school committee session. Deposits go into our authorized account.

Perfect Records
Similar to our careful accounting for ticket sales, we have specific procedures for tracking all money that comes in and goes out. Computers are clearly an asset regarding financial record-keeping, but the bottom line is that you must choose a system for your transactions that works in your situation--the total amount of money collected must reconcile with all of the records that are produced. In addition, time must be taken with data entries to ensure accuracy.

Athletic user fees are one of our largest sources of revenue and we have developed a specialized accounting system. To start, we only accept bank checks or money orders for these payments--cash or personal checks are not allowed. While this requirement was met with resistance by a few parents at first, we've found it is critical for providing a record of payments and avoiding the complications that arise from bounced checks.

We also issue receipts when athletic user fees are paid, thus creating a second level of written records--one copy goes to the parent, while we keep the other on file. A spreadsheet is then produced reflecting team rosters, and all user fee transactions including waivers, pro-rated fees (due to injuries), and refunds are noted.

Another source of revenue is an annual sport program booklet we produce that contains team pictures and narratives about upcoming seasons as well as advertisements for local businesses. All sales to advertisers are recorded with business names, addresses, and the price of each display ad. Transactions are done by check. Deposits are made to our authorized account and the deposits match the record of ads sold. Even the publication of the ads in the booklet is a form of record that should be maintained.

We also raise money through an engraved brick sidewalk that we call the Athletic Honor Walkway. Brick sales can occur at any time using an order form obtained on our school Web site. Transactions are made with checks. Purchases are recorded in a computer file. Order forms are kept in a file and can be reviewed at any time.

When it comes to money going out, auditors ask questions about sound business practices. Most institutions have procedures in place that regulate the purchasing of supplies and services, and it is important to become familiar with yours.

In my school district, it is mandatory that a minimum of three quotes be obtained for any purchase between $5,000 and $25,000. The lowest price is what we are obligated to use. If a purchase is less than $5,000, it is not necessary to obtain quotes, but I have to establish that I am buying at reasonable prices. I do this by getting price lists from competing vendors and updating them once or twice a year. All quotes are saved in a simple filing system.

Reports In
Along with following all policies on daily financial interactions, I produce a monthly financial report that is submitted to the school business manager and superintendent of schools. This summary of expenditures and receipts is forwarded to the school committee for their review as well. The report must reconcile with all supporting paperwork.

The data I use to produce these reports is obtained from a ledger of all transactions, which is broken down into three categories: salaries, supplies, and contracted services. It includes a detailed record of all money received, from gate receipts to field rentals.

Years later, I find the auditor's visits much less stressful. I've accepted the fact that time must be spent producing and following the controls needed for them to check the accuracy and integrity of my work. If you are organized, there'll be no need for panic when you receive notification of their impending visit. Your work has already been done.

On the Web: For more information on Middleboro's Athletic Honor Walkway, search for the article "One Brick at a Time" at: www.AthleticManagement.com.

Sidebar: Rules of the Road
Bear these tips in mind before an auditor comes knocking.

• Avoid cash as much as possible.
• Deposit money with due diligence.
• Consider the production of financial reports.
• Follow all established financial procedures within your town and school's purview.
• Introduce the layers and internal controls that will allow you to account for every nickel.
• Keep records permanently (or in some cases, a minimum of several years--as you would your personal tax information).
• Seek co-signatures when feasible.
• Take the time to ensure accuracy.
• Write receipts.
• Keep up the paperwork and don't worry about the trees.