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DISCUSSION MEMO
Date: 18 March 2017
To: Doug Lawrence
From: Accounting Professionals: Josette Roten, Lisa Michaelsen, and Jennie Robinson
Subject: West Coast Equestrian Association Account Advice
______________________________________________________________________________
After looking through the financials for West Coast Equestrian Association (WCEA) for
2012 and 2013, we have to trust that expenses are accurate with nothing to say otherwise. What
we can look for in WCEA financials is what money is left now, and what may not have been
accounted for.
The first place we looked was in revenues, which generate from membership fees. In
2012, $465,444 was reported. However, if you take 2,300 members and multiply by the $220 fee
equating to $506,000 - a difference of $40,556.
In 2013, 2,500 members paid a $220 fee, equaling $550,000 in revenues. They reported
$435,098, resulting in a difference of $114,902.
The 2013 bank balance reported $102,473, but was actually $45,354 - a difference of
$57,119. By the time Doug Lawrence realized the status of the numbers in May 2014 the
account reported a balance of less than $10,000, equaling an additional loss of $35,354.
Another potential loss can be seen with the education program. Their 2012 and 2013
reported incomes were $30,643 and $38,876, respectively. However, with 11 programs in 2012
and 15 programs in 2013, averaging 25 participants per program with a fee of $150, an
assumption of $41,250 and $56,250 can be made. Ultimately, this would create another loss of
$10,607 and $17,374, respectively.
Potential total losses accounted for are as follows:
40,556
114,912
57,119
35,354
10,607
17,374
$275,922
To prevent this type of fraud from occurring in the future, West Coast Equestrian
Association will have to put new management controls in place. To begin, WCEA should have
