Finding Text
Condition: During our audit we noted that an employee was reimbursed twice for the same expenses.
The employee paid for certain expenses that were supposed to be for the benefit of the Club on a
personal credit card and was then reimbursed for these expenses. While reviewing the substantiation for
the checks written to the employee, we discovered that some of the same documentation was attached to
more than one of the checks written to the employee for reimbursement. Per discussions with the
individual who was the board president at the time the duplicated reimbursement check was issued, the
second check signature on the check was not recognized as the signature of an authorized signer. Other
payments were made to the employee without the appropriate level of board approval or authorization.A disbursement was also made to an entity registered by the employee’s spouse, who was also employed
at the Club. The second signature on the check issued to the entity owned by the employee was not
recognized as the signature of an authorized signer per discussions with the individual who was the
board president at the time the check was issued.
Criteria: Club expenses should be paid directly by the Club and two authorized signers must sign the
check. One signature must be made by a board member. Proper documentation should be attached to
each check for board member review prior to the check being signed. All contractors and vendors should
be approved by the board.
Cause: A personal credit card was used to pay for Club expenses and inappropriate substantiation was
attached to the checks used to reimburse the employee for the Club expenses paid for using a personal
credit card and a payment was issued to an unapproved contractor.
Effect: Reimbursements were made to an employee for duplicated and unauthorized expenses.
Auditor’s Recommendation: Any reimbursements made to an employee should have full and conclusive
substantiation along with board approval before a check is processed. All contractors and vendors used
by the Club should also be approved by the board before any transactions are initiated with the
contractor or vendor. Only authorized signers should sign checks and all canceled check images should
be reviewed by a board member as the bank statements are received each month to ensure all checks
clearing the bank were authorized.