The particulars of a paper trail
Keeping a good paper trail of a group’s finances benefits the treasurer and the group.
Keeping a paper trail is an important way to protect yourself as a treasurer or group leader. A paper trail contains documentation that will record and document the decisions related to money within the group treasury. Items that should be kept include:
- Receipts. All purchases should have receipts that are kept on file.
- Bills or invoices. No bill or reimbursement should be paid without having a receipt, bill or invoice and copies of those items should be kept in the treasurer’s files.
- Minutes of meetings. The minutes should show approved expenditures and income for the group.
- Treasurer’s reports. The treasurer’s report, presented at a group meeting, shares the income and expenditures for a time period, often a month.
- Financial institution statements. Copies of reconciled statements should be kept on file.
- Budget. Copies of past and current budgets should be kept on file and, when possible, a comparison to actual spending and income for that budget year.
- Copies of fundraiser applications and fundraiser report forms. These forms record what fundraisers the group has planned and the success level of those fundraisers; this is important information for future planning and tracking what has occurred in the group.
- Copies of the 4-H Annual Financial Summary Report from previous years. This report is available for review and summarizes your full year’s information. This includes a listing and update of the club’s inventory.
- Receipt book. Every group should have a receipt book to document cash intake and noncash donations; the information in this receipt book should match deposits in an account.
- Documentation of cash handling. If your group collected cash, a separate log might have been used, alongside a receipt book, to track the income (for instance, from dues or stall fees.) If so, this log should be included.
A strategy for keeping organized with your paper trail is to create a binder or expandable file folder. With either option, each item would be a tab in the folder or binder so when documents are ready, they can be quickly and easily filed. More than one person should know how and where to access these important files, such as the treasurer along with other officers in the group. A once-a-year audit of these files is helpful to make sure the important documents are in place.
Keeping a paper trail is the best way to document all financial transactions and, ultimately, maintain your reputation as a treasurer. If there is ever a question or concern over money management in the group, the documents are ready for an audit or review. A paper trail is also a great tool for a group to use in reflecting on what went well with financial topics such as fundraisers, purchases and program costs.
Michigan State University Extension 4-H Youth Development provides tools in the “Financial Manual for 4-H Volunteers: Leading the Way to Financial Accountability” and the “Financial Manual for 4-H Treasurer: A Guide to Managing Money Wisely” to support 4-H groups in their fundraising planning.
Michigan State University Extension and Michigan 4-H Youth Development help to prepare young people for successful futures. As a result of career exploration and workforce preparation activities, including serving in the role of 4-H treasurer alongside an adult leader, thousands of Michigan youth are better equipped to make important decisions about their professional future, ready to contribute to the workforce and able to take fiscal responsibility in their personal lives.
To learn about the positive impact of Michigan 4-H youth career preparation, money management and entrepreneurship programs, read the 2015 Impact Report: “Preparing Michigan Youth for Future Careers and Employment.”