Minimize the Impact of Turnover With an Accounting Procedures Manual

CPAs & Advisors

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In what is being dubbed the “Great Resignation,” an alarming number of employees are voluntarily leaving their jobs; some are seeking an entirely new career path. According to the U.S. Department of Labor, during April, May, and June 2021, a total of 11.5 million workers quit their jobs. For employers, the cost of any turnover is expensive, and school districts should take steps now to prepare for operations to continue if vacancies occur.

One important step that school districts can take is to create an accounting procedures manual. The manual should outline the day-to-day operations and include items such as issuing checks, processing payroll, ensuring prompt deposits, etc. While most employees know their specific duties and how to do them efficiently, these routine tasks are often overlooked and remain undocumented.

Write accounting procedures for each key transaction cycle (i.e., disbursements, receipts, and payroll) to ensure that the everyday transactions are processed and recorded correctly. Further, it is recommended that these procedures be reviewed and updated frequently to reflect changes in the procedures that result from gaining efficiencies or changes in the software.

Once accounting procedures have been written, cross-train employees to ensure that all key transaction cycles are covered in the event of turnover, vacations or medical leave. Cross-training allows employees to take time off without the office suffering as their duties have been well documented, and other departments have been trained to handle the processing of the transactions. With cross-training, it is essential to consider segregation of duties when determining which employees will take on extra responsibilities.

While internal preparation is vital, school management should also know when to ask for external help. The pandemic has resulted in long-employed individuals retiring or taking different positions, adversely affecting operations at the districts. Such unexpected turnover can cause the business office to fall behind on day-to-day transactions and annual audit preparation, resulting in increased monitoring by funding agencies. These agencies could also potentially withhold such funds.

Oversight by management and/or the Board of Education is necessary. Limited consulting services are often available through your audit firm, such as cash to accrual entries for audit preparation, capital asset tracking, payroll preparation, etc. Discussion with your external auditor is always a good springboard. They work closely with firms that can assist with the day-to-day processing of transactions without impairing their independence.

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