Employee Handling of Student Organization Funds Policy - Northern Michigan University

The following represents best practices and is meant to be a guideline for advisors and student organizations. 

Controlling Money in a Student Organization – Best Practices

Student Organizations open bank accounts to support their need to store, control, and spend organization money.  Note that NMU faculty/staff/employees are NOT allowed to have access to the student organization funds.  This means that the faculty/staff/employee advisors MAY NOT be signers to any bank accounts. 

The following are best practices for ensuring that student organization funds are secure:

• Specifically assign the responsibility for writing checks/using debit cards to a small number of persons.  One or two persons should have the ability to sign checks or use debit cards.  The bank will help you set this up by having the persons sign “signature cards.”  Banks can set up accounts so that only one person is required to obtain funds, or put more restrictive access in place, such as requiring two signatures.   Remember to account for persons leaving campus.  It is a good idea to assign access at the end of a semester so that persons graduating or leaving can be removed from the account at the bank.
• Secure paper checks and debit cards.  Make sure that these are in a location that reduce the risk of theft of the card or checks.
• Assign a person to receive and review the bank statements.  Review of the bank statement will help your organization detect fraud.  The faculty/staff/employee advisor IS allowed to be the person who receives the bank statement.  Remember that electronic access would allow more than one person to review the bank statement.
• Specifically encourage the person who receives the bank statement to review it in a timely manner (within a few days) so that fraud or misuse can be detected.
• If fraud or misuse is detected, collect evidence and notify both the bank and the NMU Police Department.
• Plan a time at every meeting to discuss the bank statement and past/future purchases/expenses.  This statement should be passed around to the entire group to review.
• Students authorized to sign checks should not be the same person who receives the bank statement.
• Develop a process for formal approval before organization funds are spent.  For example, allow the President to authorize purchases under $25 and require full committee approval for purchases larger than $25.
• Specifically state what the organization is allowed to purchase.  Will you allow purchases of Food? Tickets? Gifts?  Specifically note that personal purchases are not allowed.
• Maintain accurate records of deposits and spending.  This can be done with a simple checkbook register.
• Keep receipts or some type of physical proof of all purchases.
• Keep contact information for all persons who are involved in banking transactions.
• Develop written procedures for how your group’s money will be controlled.  Include who can authorize payment, which bank you use, when you will change the signers on the account, what kind of evidence will be kept, and who will keep the evidence.  Include information about who is responsible for checking the bank statement for misuse of funds.