Subject: Second Interim Audit Report

To: MDCVSA Member Leagues

From: The Audit Committee ('95-'99 Fiscal Years)

Date: January 11, 2001

Background: The Audit Committee has been charged with examining the financial records of the Treasurer for four seasonal years -- 1995-96, 1996-97, 1997-98, and 1998-99 (the audit period) as established in the relevant provisions of the Constitution and bylaws of the Metropolitan D.C.-Virginia Soccer Association (MDCVSA). The Audit Committee was originally appointed at the MDCVSA annual general meeting in September 1999 (composition changed, January 2000 and September, 2000). The Audit Committee is presenting this Second Interim Audit Report to the MDCVSA member leagues and the Executive Committee so that everyone may review our additional interim findings (the Audit Committee’s First Interim Report dated November 10, 1999 is attached as Appendix 1).

Purpose of the Audit / Interim Findings: The purpose of the audit is to verify that the financial position of the MDCVSA is fairly and accurately represented in the Treasurer’s written reports. Due to the status of the records that were made available for review, the Audit Committee is unable to provide such assurances at this point. The Audit Committee is working to obtain information from both the member leagues and from third parties regarding significant transactions in order to reconstruct documentation that should have been retained by the MDCVSA. In the course of conducting the audit, the Audit Committee has found the following four areas of significant concern:

1. Substantial Underpayment of USASA Fees. The state has collected approximately $419,460.00 from member leagues in team affiliation, team liability, and player medical insurance fees over the audit period. The MDCVSA is required to pay a significant percentage of that income directly to the United States Amateur Soccer Association (USASA). During the audit period, the MDCVSA paid USASA only $232,509.66 for these seasons and in advance (i.e., by deducting approximately $28,000.00 in income before making the calculation), we are unable at this time to reconcile the $186,890.94 difference. The Audit Committee has attached a spreadsheet as Appendix 2 that quantif member leagues for team and player insurance fees have not always been paid to the USASA for the period in which they were collected. The balance of these funds appears to have been retained in the MDCVSA treasury as a source of additional discretionary spending.
   One of the reasons that the Audit Committee requested league reporting information from the Executive Committee was to enable the Audit Committee to determine the amounts that the MDCVSA should have paid to the USASA. Given that the Executive Committee has been reluctant to provide us with registration data on the numbers of teams and players reported by the member leagues, the Audit Committee would appreciate your assistance in completing the form contained in Appendix 3. The Audit Committee will continue to research this serious concern. Additional detail regarding this finding is discussed later in the report under in the section entitled "Examples of Specific Problems."
   
   
2. Overall Lack of Backup Documentation and Receipts. Approximately 50% of the reported expenditures lacked sufficient documentation to support the expenditure (e.g., disbursements were made without the submission or retention of receipts). In just one year alone (FY97-98), the Audit Committee found $117,383.17 in undocumented expenses (out of a total of $226,177.49 in total expenses - or 52% undocumented). The majority of the undocumented expenses during the entire audit period relate to various international games (approximately $219,312.35 in total undocumented expenses). Moreover, due to a lack of proper documentation, we cannot attribute the income posted with respect to any specific international game. For this reason, at this time the Audit Committee is generally unable to evaluate the accuracy of the Treasurer’s reports with respect to the either the income generated from, or the expenses paid for, nearly all of the transactions that the Treasurer categorized in his journal as related to "international games." The Audit Committee expects that responses to audit letters sent to third parties will allow us to make a more informed finding with respect to international games.
   
   
3. Various Expenses Cannot Be Justified Absent Further Information. With respect to the MDCVSA expenditures that were documented, absent the receipt of further information regarding a variety of reimbursed expenses, it appears that in numerous instances the MDCVSA did not responsibly spend nor account for its expenditures in a manner consistent with a prudently run non-profit organization. The Audit Committee has made this finding because in many instances MDCVSA officers, past and present, or others being reimbursed at the expense of the MDCVSA, appear to have: (a) failed to ensure that money advanced for future expenses was subsequently accounted for in detail; (b) failed to verify that deposits for hotel rooms are credited on the final hotel room bill; (c) failed to accurately document the legitimate business purpose of many reimbursed travel and meal expenses; and (d) failed to obtain or submit receipts for incurred expenses.
   
   
4. The Audit Committee Needs More Cooperation from the Executive Committee. The Executive Committee has not been responsive to the Audit Committee’s requests for information concerning financial discrepancies, international games, and league team and player reporting data as follows:
   
   
   First, more than one year ago the Audit Committee submitted a list of written questions to the Treasurer asking him to explain certain transactions and potential discrepancies in his records. To date, the Treasurer has not responded to that written list of questions (these questions were resubmitted to him more than one week ago). The Audit Committee has attached the questions to the Treasurer as Appendix 4.
   
   Second, the President has indicated to the Audit Committee that he is opposed to a review of documents related to international games based upon a claim of "promoter confidentiality." The Audit Committee is obligated to review the international game transactions as they represent a significant volume of both funds and transactions being conducted through the MDCVSA treasury.
   
   Third, in November 2000 the Audit Committee asked the Executive Committee to provide it with access to the MDCVSA league registration records. A review of this information (number of teams, number of players, but not players’ personal information) is necessary in order for the Audit Committee to determine whether the MDCVSA properly paid fees to the USASA. The Executive Committee has to date not given the Audit Committee access to this information.

Examples of Specific Problems. The Audit Committee is in the midst of fully researching all of the concerns presented in this report. Listed below are some specific examples of the underpayment of player medical insurance, undocumented international game transactions, journal errors, and lack of documentation that the Audit Committee has found so far. Underpayment of USASA Player Medical Insurance Expenses. At the September 14, 1996 Annual General Meeting of the Council, the Treasurer reported to the Council in a written financial report that the MDCVSA had 5,655 total players, but the MDCVSA only paid player medical insurance for 3,958 players to USASA (an apparent underreporting of 1,697 players or $9,927.45 in unpaid medical insurance fees). In later years, similar underreporting and underpayments appear to have continued for player medical insurance fees, team affiliation fees, and team liability insurance, resulting in the retention of what the Audit Committee has conservatively estimated to be approximately $154,000.00 in funds that were earmarked as pass through expenses to be paid to the USASA. The USASA underpayment, once confirmed, may represent a serious liability to the MDCVSA. The Audit Committee will ask the Executive Committee to explain this discrepancy at the upcoming Council meeting.

• Undocumented International Game Expenses. During the audit period, there were numerous checks written for significant amounts with no other notation than "international game expense". Examples of these transactions include:
  • Check #1240 payable to an officer for $8,258.69 (there were no receipts or other documents available to justify this expense)
  • Check #1398 payable to "COPA TACA" for $18,454.56 (there were no receipts or other documents available to justify this expense)
  • A wire transfer in April 1998 of $4,918.00 to an individual in El Salvador (no explanation has been provided to justify this transfer of funds -- moreover, the Treasurer is required by the Constitution to make all payments by check)
  • Check #1232 payable to INTER/Forever Sports for $35,410.34 (there were no receipts or documents available to justify this expense). If these payments are found to be income to the recipients (rather than a reimbursement for expenses), there may be adverse tax implications related to these transactions that the Audit Committee has not addressed.
  
  
• Lack of Proper Documentation to Support Other Reimbursed Expenses. The Audit Committee finds that self-generated invoices have been used (without any other supporting documentation, such as receipts) to justify many other expense reimbursements. Although the Audit Committee finds this practice to be questionable, the Audit Committee did not consider those expenses to be "undocumented", but have instead classified them as "insufficiently documented".



• Inaccurate Journal Entries. The Audit Committee finds that the Treasurer did not routinely reconcile the bank statements during the audit period. This necessitated a comparison of all deposits and expenses from the bank records to the Treasurer’s journal. As a result of this comparison, we found journal entry errors ranging from as low as $.10 to as high as $4,100.00. It appears that most of these errors were not properly recorded in the MDCVSA records. Even though these errors were pointed out to the Treasurer more than one year ago, it appears that the Treasurer, as of the most recent Treasurer’s report, has not posted any correcting entries to the MDCVSA records.

Executive Committee Assistance is Needed. The Audit Committee will soon be sending a comprehensive set of questions to the Executive Committee in an effort to clarify certain transactions that, in many instances, the Audit Committee could not determine on their face to be legitimate MDCVSA business expenses. Obviously, the Audit Committee will reserve making a formal finding regarding certain questionable transactions until after the Executive Committee has had a reasonable time within which to respond to its questions and the Audit Committee has an opportunity to evaluate those responses.

The Audit Committee’s list of clarification questions is lengthy, so it has not been attached as an Appendix; however, the list of clarification questions will be made available to any league upon request. The Audit Committee’s expectation is that the Executive Committee’s responses to our inquiries may clear up our concerns with respect to its initial findings. We anticipate that the Executive Committee will provide written responses to the Audit Committee’s lists of questions within a reasonable time frame. Absent a timely response from the Executive Committee, the Audit Committee will endeavor to set forth the appropriate remedies that should be considered by the member leagues at the next Council meeting.

Final Report Status/Questions Welcome. At this point, the Audit Committee wants to assure member leagues that it is working as expeditiously as possible to complete the tasks associated with a full and fair examination of the MDCVSA’s financial records. The Audit Committee expects to issue additional findings, and, when appropriate, a final report. The Executive Committee’s willingness to work with the Audit Committee to provide answers to our questions will enhance our ability to complete this task in a timely manner.

We are willing to answer any questions that you may have at the January 13, 2000 meeting or at any other time.

Respectfully submitted,



The MDCVSA Audit Committee ('95-'99 audit period)

Anita Hood, Chair - darkhood@tidalwave.net
Lauren Ware, Member - Lware14@yahoo.com
Jim Sadowski, Member - jds@gdllaw.com
Sibyl Tilson, Member - STILSON@crs.loc.gov

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APPENDIX ONE

MDCVSA REVIEW COMMITTEE AND EXECUTIVE BOARD
NOVEMBER 10, 1999

TO: The Metropolitan DC Virginia Soccer Association - Executive Board and Council

FROM: The Metropolitan DC Virginia Soccer Association Books Review Committee

The Metropolitan DC Virginia Soccer Association (MDCVSA) books have been partially reviewed, we find the following:

A. The assets listed on the Treasurer's report dated 8/31/99 did not agree with bank statements.

B. The Treasurer maintains a journal (Lotus spreadsheet) in a computer file to record income and expenses. A printout of the journal entries with the bank statements was compared and numerous inaccuracies were found between these documents. While some of the inaccuracies were of a routine mathematical nature others raise questions about the policies of the association.

C. The MDCVSA currently does not use proper procedures for the accounting of income received, purchases made, reimbursement requests, and expenses paid.

D. The bank accounts are not diversified.

E. There is no equipment account.

F. MDCVSA is at risk and may lose its incorporation as a non-profit organization.

G. The Treasurer's records appear to indicate that no corporate annual reports were filed in a timely manner (during the 1990s) and the last corporate document that was filed was in 1997, when an amendment to the corporate charter was filed. Apparently, because no one filed an annual report on behalf of the MDCVSA, the corporate charter was revoked. The DC Superintendent of Corporations granted reinstatement of the corporate charter in the summer of 1997, but again no annual reports appear to have been filed since 1997.

H. A member of the Committee called the DC Department of Consumer and Regulatory Affairs, Corporations Division, and was told that Janet Hughes is listed as MDCVSA's registered agent. This is consistent with the last filed corporate document in the Treasurer's file. The Committee member also spoke with Janet Hughes, who indicated that the address listed with DC is her old work address, that she no longer works there and hasn't for several years, and that her former employer (Greenseal) used to be located at that address and has since moved. It is therefore likely that MDCVSA corporate documents have been sent to an old address.

I. It appears that the MDCVSA, a DC corporation, is not authorized to transact business in Virginia.

J. The Treasurer had no record of a tax return ever being filed by MDCVSA with the Internal Revenue Service, with the DC Department of Taxation, or with any other state or local taxing authority. The Treasurer had no tax records to indicate that any tax filings of any kind had ever been made by MDCVSA, with the exception of documents relating to MDCVSA's Section 501(c)(3) application and a revenue ruling from the IRS granting the same.

The Review Committee’s recommendations are:

1. Immediately get the software accounting package called Quicken or like software.

2. Provide the Treasurer assistance to establish a new accounting system.

3. Immediately establish a new working account.

4. Do not use the old checking account -- let everything clear so we have a clean balance.

5. Immediately establish a person / group to write up an organizational policies and procedures guideline to be used in conjunction with the Constitution and Bylaws.

6. Diversify -- Move the CDs into several banks so that monies are not over $100,000 in any one bank -- and for the highest interest available.

7. Bond the signatories on the accounts as per the Constitution.

8. Have another review approximately 6 months after the above takes effect.

9. Effective immediately, the Treasurer shall not be permitted to honor any request for reimbursement unless the person making the request has completed the new MDCVSA expense reimbursement form, which form must be used for all requests for reimbursement and be accompanied by an original receipt.

10. All requests for reimbursement must be made within thirty (30) days of the date that the expense was incurred.

11. We recommend that the Treasurer of the Association reconcile the bank accounts monthly going forward. The accounts currently have not been reconciled since this Treasurer took office (and we do not have any records from the previous Treasurer). Had the account been reconciled monthly over the years many of the discrepancies that exist today would have already been caught and corrected.

12. The association needs a policy on the handling of wire transfers. This is similar to the unwritten rule that checks over $1,000 require two signatures. Also it is needed both formally and in whatever policy document results from our work. It is a good practice to have these procedures documented. That way when the annual audit committee begins its work it will already know what the policies of the association are.

13. The association should provide guidance to the Treasurer as to how long it wants to carry outstanding items on its books. Several items are from as far back as the '95-'96 season are still outstanding. Once the association makes this determination, the policy should be included in the written procedures of the association.

14. The Executive Committee should ensure than within seven (7) days an appropriate officer prepares and submits any outstanding corporate forms and pays any corporate fees and fines.

15. Review the Registered Agent status and file for the "new agent."

16. Become incorporated in Virginia.

17. The Executive Committee must keep records of its meetings and the Recording Secretary shall prepare minutes of any Executive Committee meeting that is conducted so that written records of all MDCVSA business and Executive Committee decisions are kept and are available for review by its Members.

18. That a copy of the IRS Revenue Ruling granting the MDCVSA non-profit tax status be provided to all persons who incur expenses and make purchases on behalf of the MDCVSA so that tax savings can actually be realized.

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APPENDIX TWO

Underpayment to USASA Analysis
	League payments made in audit period and deposited during audit period	League payments made for '95-'99 seasons made to MDCVSA during audit period but prior to June '99 payment to USASA
League payments made for '93-'94 & '94-'95 season made in audit period excluded from analysis	$21,197.10
League payments made for '99-'00 season made in audit period excluded from analysis	$7,266.38
League payments made during audit period net of checks sent to leagues for overpayments during the audit period	$419,400.60	$401,810.70
MDCVSA Payments to USASA for Team/Player Affiliation and Liability Insurance as Well as Player Registration during Audit Period	$232,509.66	$232,509.86
Difference in MDCVSA Collections and Payments during Audit Period	$186,890.94	$169,403.04
Estimated amount that MDCVSA could have retained during Audit Period (using team and player data in invoices sent to USASA and league counts in Treasurer's data) See page two for calculations and Assumptions	$33,160.00	$33,160.00
Difference to be resolved	$153,730.94	$136,141.04

APPENDIX 2 / Page 2

Number of Teams and Players Reported to the USASA
Seasonal Year	'95-'96	'96-'97	'97-'98	'98-'99
Number of Leagues	22	24	24	20
Number of Premier Teams	97	41	57	64
Registered Primary Premier Players	1,719	760	1,518	1,615
Number of Recreational teams	150	162	169	203
Registered Recreational Players	2,800	3,143	2,961	3,439
Average # of Players per Recreational Team	19	19	18	17

Source: Detail of Remitted Funds, Various Invoices

Calculation of Funds that MDCVSA Could Retain
Seasonal Year	'95-'96	'96-'97	'97-'98	'98-'99
Annual League Fee / $25 per team	$550.00	$600.00	$600.00	$500.00
Share of Premier Teams Affiliation Fees, $5 per team	$485.00	$205.00	$285.00	$320.00
Share of Premier Teams' Liability Fees, $5 per team	$485.00	$205.00	$285.00	$320.00
Share of Premier Player Fees -- we assume that MDCVSA keeps $3 per player but is was not apparent what retention was in 95-96	$5,157.00	$2,280.00	$4,554.00	$4,845.00
Share of Recreational Team's Affiliation Fees, $15 per team	$2,250.00	$2,430.00	$2,535.00	$3,045.00
Share of Recreational Team's Liability Fees, $5 per team	$750.00	$810.00	$845.00	$1,015.00
Yearly Total	$9,127.00	$5,930.00	$8,504.00	$9,545.00
4-year Total / $33,106.00

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APPENDIX THREE MDCVSA League Verification Form (please complete) Name of League: ____________________________ Name of League Rep.: ____________________________ Fall 95 Sp 96 Fall 96 Sp 97 Fall 97 Sp 98 Fall 98 Sp 99 No. Premier Teams No. Premier Players No. Recreation Teams No. Recreation Players Please List all payments made to the MDCVSA from 9/1/95 – 8/31/99 Amount of Check Date of Payment Number Payment

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APPENDIX FOUR Memo

To: Luis del Aguila

From: Audit Committee

Date: 01/3/01

Re: Questions regarding MDCVSA Journal (second request)

Luis,

In November 1999, I submitted to you the following list of questions regarding records maintained on behalf of the MDCVSA. The tone of my original message may have been such that you did not believe an answer was in order. We would now like to formally request answers to the following questions in order that we may continue the work of the audit committee. Since you have had the questions, for well over a year now perhaps it will not take you very long to respond. I have also deleted the questions that related solely to mathematical errors between the state's records and NationsBank's records. In other questions, I touched up the wording to make it clear that we were asking for a response. Should you desire to see the full original, unedited document I can make that available as well.

Below is the preamble used for my November 1999 memorandum as a refresher to the issues. I have underlined the sentence containing the word questions to indicate that all along we were interested in obtaining responses from you on these issues. I did not delete the references to math errors in the preamble, as I wanted to leave that as true to the original as possible. Thank you for your assistance.

Original:

"We have begun a review of your journal entries for the four seasons where you were able to provide us detailed records. In the course of the review several questions arose, some of which relate purely to how an entry was recorded (e.g. potential math errors) and others are related to particular transactions themselves. Some of the checks are still outstanding after a number of years. These should help you in your efforts to balance the current checkbook. It also raises the question of how long does the association wish to carry outstanding items in its records before they are dropped or otherwise cleared. This issue may also be addressed within the written policies we are recommending.

The questions are categorized by seasonal year. They are also in chronological order within year so they have not been prioritized in any other way. There are quite a few questions in the '97-'98 season and in fact one deposit during that year seems to have been underreported in your records by $4,100. Unless otherwise noted, we did not find any correcting entries. This should not be considered our final list of questions.

We recognize that as a result of our previous discussions that you will be opening a new MDCVSA checking account and closing the old MDCVSA checking account out. Once the new account has been opened we recommend that you reconcile the bank statement to the checkbook (or journal) records of the association monthly. This will help you catch many of the math type errors that we all make in our checkbooks. Also it will be more transparent to the members if you keep a separate journal for the different various types of deposit accounts maintained on behalf of the association. The savings and CD accounts have little activity to track other than interest payments and transfers so this separation should be easy to implement."

'95-'96 season

1. On 10/10/95, Guatemala Soccer Club bounced a check (e.g. in their deposit from 10/4) for $227 and on 11/22/95, NationsBank assessed a $4 chargeback fee. On 3/18/96 the Guatemala Soccer Club pays $474.40 in league fees for '95-'96 season. It is unclear whether or not the $227 is in here or not. The $4 fee was listed as being paid at this time as well. Can you confirm the status of this bounced item? It appears that this amount was related to a particular team.

2. On 10/19/95 Roberto Baptista's check for $2600 bounces. Apparently, Mr. Baptista owes the association money related to international games ($4,392) and that this $2,600 was a partial payment. On 11/22/95, NationsBank assessed a $4 chargeback fee. Who is Mr. Baptista and has the association been repaid yet? We could not find evidence that he has ever paid us. (this question has been followed up on since it was originally asked in November 1999).

3. On 2/19/96, check 714 was issued to USASA for "collection" watches. What are "collection" watches, how many were ordered and who has them?

4. On 4/8/96, checks 732 and 733 were issued to the same league for the same amount. Were these two checks for different expenses? It is difficult to tell from the description.

5. Check number 1113 for $150 is still outstanding to Capital Soccer League. This will need to be carried in our list of outstanding checks until it either clears the bank or we decide to add it back to our available funds.

6. Check numbers 1143 and 1145 dated 8/5/96 are still outstanding. These checks are for amounts of $.30 and .20, respectively. These will need to be carried in our list of outstanding checks until they either clear the bank or we decide to add them back to our available funds.

7. What is our policy on insurance? Why are we reimbursing insurance deductibles to parents? Check 1118 6/6/96 payable to Jan Johnson for $300 for Kelly's doctor bills. Did Kelly play on our state team?

8. Northern VA Soccer League bounced a check on us 6/26/96 for $1500 and NationsBank assessed us a $4 chargeback fee on 7/22/96. We redeposited the $1500 on 7/9/96; however, we never collected the $4 fee.

9. On 8/30/96, the journal indicates that we received $9.10 in returned checks as miscellaneous income. This amount never hit the NationsBank account. Who were these checks returned from or what entries is this entry attempting to reverse?

10. Why do checks skip from 733 to 1103? 370 checks are missing.



'96-'97 season

1. On 11/27/96, NationsBank cleared check number 1193 payable to W. Watson for $369.56. Our records of 11/26/96 indicate that the check was split for $369.56 and $34.50 for a total check amount of $404.06. It appears that our record of expenses is overstated. Please explain.

2. On 2/28/97, an entry was posted to the journal for returned checks as miscellaneous income of $72.86. Who were these checks returned from or what entries is this entry attempting to reverse? This amount never hit NationsBank.

3. On 3/17/97, check number 1220 was written to NationsBank for $20,000 for a USSF bond. What does this represent? Was this a cashier's check payable to USSF?

4. On 4/23/97, NationsBank credited our account $36. Why was this deposit was never posted to our journal?

5. On 8/10/97, checks number 1286 and 1287 were written to WAWSL and PGSL in the amounts of $82.50 and $4, respectively. These checks were for overpayment of fees. These checks have not yet cleared the bank; therefore, they need to be carried as outstanding on bank reconcilements.

6. On 8/27/97, check number 1300 to Soccer Academy United was listed in the journal as $650; however, NationsBank cleared this check in the amount of $750. Which amount is correct?

7. On 8/30/97, an entry was made to the journal to credit our account $233.92. Reason listed was returned checks. This item never hit the NationsBank account. Please substantiate this miscellaneous income item.



'97-'98 season

1. On 10/14/97, NationsBank reflects two deposits totaling $26,143.97. Our journal only reflects entries for these deposits totaling $22,043.97. This difference is $4,100 and was not shown in our journal. Where is the $4100?

2. On 10/14/97, NationsBank made a $50 adjustment to our account. This adjustment was not posted to our records. What was this adjustment for and why was it not posted?

3. On 11/28/97, NationsBank assessed us .75 as a cash deposit processing fee. What deposit is this related to? How common is it for the association to handle cash?

4. Are checks 1347 and 1367 related? Both were made out to the same person for the same amount and similar reasons.

5. On 12/18/97, NationsBank gave us credit for $34,560.75. This same deposit was recorded in our records as $34,534.75. What does the $26 shortfall represent?

6. Check 1388 written on 3/7/97 is still outstanding. Check was for $320 and payable to Colleen Corwell for select team clinic expense. On our bank reconcilement this item should be shown as outstanding.

7. What is check 1401 for $10,000 made out to NationsBank for? Description says bond. What does this mean?

8. On 4/14/98, we wired funds to someone named Vicente Basagoitia in El Salvador in the amount of $4,918. The memo only indicated FAS. What was this item for?

9. On 4/30/98, we charged off $10,000 in USA '94 world cup share. Please explain this transaction. For example, when was this income originally posted? If we were to attempt collection at this point who would the association look for reimbursement from?

10. On 4/30/98, we charged off a laminating machine for $295.74. If we had already expensed our laminating machine when originally purchased, why is it necessary to expense it a second time?

11. On 6/12/98, check 1448 to Luis del Aguila was listed in our journal as $85.04; however, NationsBank cleared this check for $94.04. Why are our records understated on this item? Or did NationsBank make an error?

12. On 8/31/98, NationsBank gave us counter credit (deposit) for $25. We show no corresponding deposit on our books. However, our books show a $25 deposit from Hanover Amateur SA on 8/28/98 that NationsBank never gave us credit for. Are these two items related?



'98-'99 season

1. On 10/14/98, interest earned from our six month $100,000 CD was posted. Please supply confirmation from NationsBank regarding this amount. For example, how did the Treasurer know how much interest to record and when?

2. Check number 1527 for $101 payable to WISL from 12/8/98 is still outstanding and needs to be carried as outstanding on bank reconcilements.

3. On 12/20/98, CD interest of $262.98 was posted from NationsBank. We need to confirm this amount with NationsBank records. Additionally, it is unclear which CD this interest belongs to. Recommend that the journal records label the CDs by principal amount in order to differentiate between them. Please supply the NationsBank records regarding interest payments on CDs.

4. On 2/18/99, CD interest of $245.88 was posted. Need to confirm this amount with NationsBank records. We presume this interest belongs to the second CD which appears to have a 60 day term. Same recommendation as 3 above. Please supply the NationsBank records regarding interest payments on CDs.

5. On 4/19/99 and 4/21/99, CD interest of $247.21 and $2,617.31, respectively was posted. Need to confirm these amounts with NationsBank records. Appears that one CD is rolling over every six months (the larger one) and the other is rolling over every 60 days (the one that started at $45,000). Same recommendation as #3 above.

6. On 5/10/99, check number 1573 to Luis del Aguila was posted to the journal for $401.21; however, NationsBank cleared the check for $473.21. The $72 difference has already been researched, and it was determined that the $108 memo item should have been posted as $180. Therefore, travel/meeting expenses are understated by $72 (as are total expenses). Please show where this transaction was corrected in the treasurer's records.

7. On 6/22/99, $18,978.73 was transferred from checking to open a CD per the journal. Did this money go to increase the balance of the smaller 60 day CD? Need to see CD deposit receipt. This appears to be the first journal entry where a transfer to a CD is documented. Please supply the receipt.

8. Check number 1601 for $15.50 payable to Peninsula Adult SL is still outstanding from 8/8/99. Need to carry this check as outstanding on the bank reconcilement.

9. On 8/27/99, CD interest of $412.12 was posted to the journal. Need to confirm this amount with NationsBank records. Which CD is this interest for? Or is it for both combined?

10. On 8/30/99, there was a transfer from the checking account to the smaller CD? In the amount on $4587.88. Need to confirm this amount with NationsBank CD records.



Of course, we have already discussed applying to the bank for reimbursement of withheld interest so that will not be reiterated here. We hope that you will find that by researching these transactions that it helps you in your efforts to maintain the books of the association. Let us know if we can assist you in any way. In the meantime, we desire to have the above questions answered at your earliest convenience. It was not the intent of the earlier wording to imply that this information was solely informational and for your benefit only. The audit committee at this time wishes to convey that we would like to have these questions answered. Thank you.