Fiscal Management
Budget: MEI will annually present a proposed Program of Activity and Budget which includes the association’s goals for the year, the ongoing member services and specific projects needed to accomplish them, and the budget of revenues and expenses that will be needed.
Rarely are there funds enough to support every program or service an association wants. The annual budget proposed by MEI will be based on its management perspective and responsibility to ensure the most effective use of limited fiscal resources. It will be constructed in line with the strategic plan of the association. It will support those services and programs with the highest priority in that plan, and will include only those which truly support the strategic mission of the organization.
The Board has a responsibility to approve this or any other budget. MEI can provide guidance – the reasons it constructed its proposed budget as it did, help in understanding the trade-offs of changes, and the advantages and disadvantages to achieving the association’s goals.
Once a budget is approved, MEI reverts to its management role. It executes the program of the approved budget, makes sure its expenditures on behalf of the association are in line with the approved budget, and exercises its internal system of fiscal procedures and controls. These “checks and balances” ensure compliance and give early warnings of significant variances. This system of internal controls that has been approved by the auditors (including two of the former “Big 8”) of our existing clients.
Accounting: MEI employs a “functionalized” accounting system for all its association clients. This system allows the tracking of income, but more importantly, that of expenses by program activity (e.g., membership, meeting, newsletter) and functional activity (e.g., postage, printing, and travel). When summarized by program, this accounting method ensures that the association has a clear understanding of each program’s cost and its contribution (positive and negative) to the bottom line. This enables the association to examine the return on investment and cost/benefit ratio of each of its programs.
The actual posting of the accounting data is normally done by MEI. At the association’s option, an accounting firm can be engaged to perform the accounting work, with MEI supplying the accountant with basic data. In either case, the functionalized system will be used.
Variations and extensions of the functionalized accounting system’s account codes are used for two other purposes. They are used for filing of association records. They are also integrated into MEI’s time management system, allowing the tracking of actual time spent by our staff by program. (Initially, MEI’s management fee is allocated, as a functional expense, against each program based on a percentage of either estimated time or actual budget. Subsequently, it is allocated more precisely on the basis of these time records.)
Grants: MEI will write and present applications for grants or other funds on the association’s behalf. None will be initiated without the approval of the association’s officers. None will be applied for which don’t foster and support the association’s programs and services. And none will applied for which impose severe restrictions or requirements on the association.

Cash Management
Bank Accounts: MEI establishes two checking accounts for each association client, a “depository” account accessible only by the client Treasurer for withdrawal of funds, and an “operating” account accessible by the MEI Executive Associate assigned to the client.
The depository account is maintained as a segregated account. The Treasurer will have the only checkbook for the account and, usually along with one other association officer, is the only person authorized by the bank to withdraw funds. All association receipts (cash, checks, and charge card receipts) are directly deposited into this account through a bank “lock box” (or deposited to the “lock box” within 24 hours if received by the office staff).
The operating account is the account from which the MEI Executive Associate pays the association’s operating expenses, including MEI’s invoice. Monthly, a report to the Treasurer is prepared detailing the distribution of funds to be made from the operating account. Once the Treasurer has reviewed and approved this report, he/she will issue a check from the depository account to the operating account sufficient to cover this distribution.
This two-account system ensures good money management and control, and ensures that MEI never has direct access to the bulk of the association’s funds. Even for the limited access it does have, all of MEI’s staff are individually bonded in favor of the association against theft.
Accounts Receivable & Payable: MEI assigns these responsibilities to two different individuals, in accordance with generally accepted accounting principles. Non-membership receivables are invoiced with chronological identification numbers, and a strict system of second and third notices results in minimal bad debt write-off.
All payable invoices are date stamped when received, and when cash flow is sufficient, are paid within 45 days of receipt. Each invoice must be approved for payment by having all calculations checked and each item coded according to the association’s chart of accounts. If cash flow is insufficient to cover the payables, payment schedules are negotiated with vendors to maintain the association’s good credit rating.
Investments: MEI will take appropriate steps, as authorized by the association’s bylaws and its officers, to invest the association’s idle funds to maximize the yield of those investments, and to preserve the capital invested.

Reports
Monthly: At the end of each monthly accounting period, MEI will provide financial reports to the association’s Treasurer and principal officers. These include bank statements, detailed lists of deposits made to the depository account and checks written on the operating account, income and expense schedules for the month and year-to-date compared to the annual budget, and a balance sheet showing the assets, liabilities and net worth of the association.
Audit: MEI will arrange for an outside auditor, to be approved by the association, to conduct an annual audit of the association’s financial transactions and records, and to prepare fiscal year-end statements of financial condition. If the association has elected to engage an accountant for the monthly accounting routine, the auditor engaged should be a different accounting firm to assure independent review.
In either case, the audit will be conducted at the association’s expense. MEI will provide and make available all records needed by the auditor.
Tax Returns: Based on the annual audit, all required tax returns for any and all jurisdictions will be prepared and filed on the association’s behalf.