Monday, August 16, 2021

Internal Controls. Audits. Tax Status. Investments. Portfolio. Financial Statements. Balance Sheet. Performance Indicators.

by Amanda Wickard, MBA, RHIA, CPHI

Not exactly the most exciting, eye catching, must read blog title but very much a huge part of OHIMA and the maintenance of the association.  OHIMA is considered a 501c6 not-for-profit organization in which this status allows us to have a tax exempt status; meaning that as an organization we are exempt from paying federal corporate income tax on income generated from activities that are substantially related to the purposes for which the entity was organized (i.e., to the purposes for which the organization was granted tax-exempt status).

The financial business of OHIMA is administered through the Executive Director with assistance from the Finance Manager, an independent contractor, the President-Elect and outside financial advisor. Together these individuals review account activities, process expense statements, monitor the investment portfolio, keeping accurate records of all monies received and disbursed, generating reports and writing checks. The AHIMA financial presentation stressed that no one person should have the span of control over the financial business of the association which is why OHIMA has built in various checks and balances to ensure that the finances are appropriately managed. Some of the responsibilities for an association and deemed Treasurer or Finance Manager or Executive Director is to:

  • Track all expenses
  • Ensure Federal and State filings are completed and on time
  • Run and file quarterly reports
  • Verify the budget with the financial statements including the income statement, balance sheet and cash flow statements
  • Review transactions, travel, credit cards, write checks 
  • Reconcile bank accounts

Much of the discussion from the AHIMA Leadership symposium in July discussed the importance of internal controls and a yearly audit.  Some of the best practice strategies that were suggested include:

  • Looking at monthly reports for any discrepancies or abnormal activity - having payments directly sent to a bank account
  • Assessing the market valuation of the associations Portfolio
  • Review asset allocations vs. target allocations
  • Review investment management fees
  • Determine if the performance of the organization’s finances is in alignment or beating bench marks - in other words, is the organization meeting their performance indicators?
  • Perform a financial audit, conducted yearly as reportable public information.  We want an audit report to be clean or unqualified with no issues. 

In order for OHIMA to build a strong financial standing, the board and the executive director work together to ensure the budget is understood and all necessary steps are taken to enforce internal controls as well as seeking outside council when necessary.

About the Author 

Amanda Wickard, MBA, RHIA, CPHI
is the current President
on the OHIMA FY 2021-22 Board of Directors. Amanda is the Director of Health Information Management Services Department at Wood County Hospital.