Risk & Compliance
Sandy Fredrickson, Chairman
Sharon Voltz, Committee Member
Roberta Elvecrog, Committee Member
WHY Is THIS COMMITTEE IMPORTANT?? WHAT DOES IT OVERSEE??
As the Department of Minnesota ALA has roles/duties of the organization, the Department Executive Committee and Officers are to Protect our legacy, monitor finances, and oversee duties of volunteers. Members of our organization include the Department, the 10 Districts, and all Units of MINNESOTA. This is YOU, the member!
A conscious reminder always: “Money belongs to your American Legion Auxiliary unit, district, or Department. Monies must be managed properly.”
People and lax procedures are the biggest risks for fraud. FRAUD is THEFT. THEFT is a CRIME. Safeguarding ALA funds requires having and following proper procedures for oversight, internal controls, and checks and balances.
IMPORTANCE: Because nonprofit organizations, by their very nature of existing to “do good things,” are too trusting and too lax about business practices. Nonprofits, therefore, have the highest rates of fraud and theft. Reports indicate that more than 1.6 million nonprofits have experienced fraud in recent years, per M. Alerding of Alerding CPA Group (the external ALA National Headquarters audit firm from 2018). Numbers are probably much higher today.
FRAUD is damaging to the ALA’s reputation!
Financial integrity is vital to protect Auxiliary funds!
The “POWER OF TWO” means:
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Never allow one person to handle finances in isolation.
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Require two signatures on every check.
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Ensure a non-signing officer reviews bank statements monthly.
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If statements are digital, link them to the account.
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Share login credentials between two officers to prevent lockout during leadership transitions.
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Operational Safety protects our reputation, meaning reducing liability.
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verify insurance coverage from a 3rd party vendor
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when working with youth---always “two-deep leadership” is non-negotiable. No adult should ever be alone with a minor, and background checks are mandatory.
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Maintain meticulous meeting minutes for all votes and expenditures.
Governance and Continuity---insulate operations from conflict of interest.
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Crosstrain
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Digital presence
Modernize Your Constitution and Bylaws are your best insurance policies.
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Review every 2-3 years. Sooner if changes at National/Department level occur. Outdated documents leave the ALA vulnerable to chaos and legal challenges
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Have CLEAR by-laws (standing rules) define authority, prevent power struggles, and ensure alignment with the National, Department, and District.
The Department of Minnesota ALA has formed this committee and is following the National’s lead for roles and responsibilities of this committee. The Department strongly encourages and recommends every district and every unit to follow these guidelines. The Department President shall appoint the chairman from among those ALA members who are not liaison members. (District and Units also)
The Risk & Compliance Committee responsibilities with regard to the ALA and ALA Foundation are to:
1. review the integrity of financial statements and financial disclosures;
2. ensure compliance with legal and regulatory requirements;
3. engage the independent auditor and review and approve the annual financial audit and IRS Form 990;
4. oversee the organization’s internal controls and risk management procedures;
5. meet periodically with respective management and auditors to gain an understanding of the potential significant risks and exposures facing the organization; and propose needed internal controls to reduce risks.
One final note---Has your unit filed your 990 report with the IRS? This is required annually. If questions please contact any of us on the committee.
We are “grounded in our roots!”