2011 AMC INSTITUTE COMMUNITY CONFERENCE

“ACCREDITATION - IT’S ALL ABOUT

BEST PRACTICES”

Suzanne C. Pine, CAEAMC – National Accounts, PCVBAMCI Accreditation Task Force Chair August 6, 2011

BECOMING AN ACCREDITED AMC

The Standard establishes requirements that provide a measurement for practices that are utilized by all sizes and types of AMCs in order to enhance the performance of the AMC and its staff.

The Standard establishes requirements that each individual AMC is permitted to use to create its own measurables. An AMCs compliance with the Standard will depend on its adoption and implementation of its own definitions, procedures, and policies as they relate to each element in the Standard.

STANDARD OF GOOD PRACTICES

Client Contracts: Review Procedures and Requirements

Servicing the Clients and Service Delivery Procedures Project (Service) Completion Financial Management and Internal Controls Insurance Coverage Employee Recruitment and Selection Employee Training and Professional Development Subcontracting and Purchasing Requirements Record Keeping Requirements Internal Audit Procedural Requirements

SELECTING A THIRD PARTY AUDITOR

The AMC selects a qualified CPA Qualifications include:

CPA must meet the standards of a peer-review once every 3 years, and receive an unqualified opinion on the review;

CPA must be qualified to perform ‘agreed-upon-procedures’ engagements and prepare an opinion;

CPA should possess previous experience with the AMC Institute Accreditation Review process (this will save the AMC time and money)

THE COST OF AN AUDIT

The cost will vary based on a number of factors including size of the AMC, geographic location, and the CPA’s experience with the review process

Key elements for estimating costs are: Desktop review of documents 3-4 hours Onsite review 7-14 hours Preparation of required forms 2-3 hours

WHAT HAPPENS DURING THE ONSITE REVIEW?

The CPA will review current documentation in support of the policies and procedures provided during the desktop review stage

The CPA will question AMC staff to confirm they are aware of the documented policies and procedures To make this process more efficient, provide the

auditor with a computer and access to your network

CASH VERSUS ACCRUAL BASIS OF ACCOUNTING

AMCs must ensure that client financial statements are presented in accordance with GAAP AMCs must propose to client boards that

they use accrual basis accounting, however, it is the client’s decision

AMCs should document a client’s decision to use “other comprehensive basis of accounting” (cash)

MUST WE HAVE A WRITTEN POLICY?

The AMCI Accreditation Program requires AMCs to have written policies and procedures – it does not dictate how detailed they should be

When drafting new policies, keep it simple! You don’t get extra points for more

words

AUDITOR REVIEW VERSUS INTERNAL AUDIT SECTION 12

The Auditor Review is conducted every 4 years by a qualified CPA (outsider)

Section 12 of the standard refers to AMC staff conducting an internal review of existing policies and procedures

The purpose of the internal review is to assure continued compliance with the AMCs written plans and procedures

HOW LONG WILL THE ACCREDITATION PROCESS TAKE?

Depending on available resources, the entire process (from start to finish) can average 3 – 6 months

Larger AMCs don’t have an advantage

Having well documented policies and procedures will give you a jump start

GETTING STARTED

Assign an Accreditation Champion Meet with key personnel and assign

specific sections of the standard based on areas of expertise

Clearly communicate timelines and expectations

Share progress with all associates

THE COST OF BECOMING ACCREDITED

Total first year fees are estimated between $1,200 - $4,200; including: Accreditation application fee ($700) Auditor review fee ($500 - $3,500)

(Auditor’s fee is negotiated directly by the AMC with the selected qualified CPA - AMC Institute can recommend an auditor, if desired)

Annual accreditation maintenance fee ($275)

HELPFUL RESOURCES ARE AVAILABLE

The AMCI web site resource center is available to all members and includes sample documents

The AMCI Accreditation Task Force hosts free information calls every other month available to non-members and members

The PCVB offers free workshops at regional locations, facilitated by Sue Pine

AMC INSTITUTE ACCREDITATION

“IT’S ALL ABOUT BEST PRACTICES”

There are currently 68 AMC Institute Accredited AMCs – Won’t you join us?