Memo

To: Susan R. Street- Beavers

From: Bill Milroy-

Subject: New Set-up ofIndianapolis Office ofIndiana Libertarian Party

Date: April 29, 2007

I am submitting this memo to you to suggest steps that might be taken to have a business
office in Indianapolis. My experience is, as you know, is primarily in accounting and
office procedures and this memo covers my suggestions for this aspect of office
operations. I do believe to insure efficient and transparent operations all previous records
should be clear and documented and that continuing operations should have clear and
understandable record of all transactions.

As a basis for beginning operations I suggest these records should be obtained from the
current Treasurer If the Treasurer does not have the records we will have to search the
office or make inquires of previous personneL

Financial Statements- All tax returns, campaign finance reports, and if prepared financial
statements should be obtained. Any other reports filed for internal use or with state or
Federal authorities should be obtained. I don't know how long the current Treasurer has
been doing these reports but all the reports during his tenure should be obtained. Inquires
should also be made to determine if other records exist and where the records are.

Cash- All bank statements, cancelled checks, check registers, deposit slips, and
documented service charges should be obtained. The bank account authorization and
agreement as well as the signature cards should be obtained and reviewed, especially to
see if there are any special provisions. When these documents are obtained the account
should also be transferred to a branch near the Indianapolis office and the signature cards
changed. All of these records should probably be reviewed by you and audited as you
mentioned by a CPA to see if there are questionable deposits or disbursements.

Disbursements- The supporting documentation for disbursements should be reviewed to

check that the expenditures appear reasonable and have: invoices, receipts, or some other
documentation and were approved by an officer or other authorized person. As I do not
know what previous procedures were used but if we have questions at least a verbal or
written explanation might be requested. I do think we do want to insure in the future that
documentation with supporting documents should be used as well as approval by you as
Executive Director. The use of a pre-numbered Purchase Orders might also be considered
if the need for approval prior to a purchase is considered advisable and the volume is
significant.

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Memo to Susan R. Street-Beavers-Indiana Libertarian party Indianapolis Office page# 2

Fixed Asset Records- I don't know if lists office equipment exist and if all the equipment
is owned by the party. If such lists do exist we should have them and if not perhaps a list
should be prepared to prevent unauthorized removal.

Agreements- Any agreements for office rent, parking leasing of office equipment,
internet service should be obtained and reviewed. If the agreements are not available we
should contact the vendor.

I am sure as we work though the transition other records or questions will come to our
attention I realize I may not have covered all questions but these ideas will give us a
starting point.

Office Operations I know we will want to set up procedures which will document all the
business transactions. I am offering these suggestions:

Cash All checks and cash however received should be recorded on the day received and
deposited that day. The checks should be restrictively endorsed when received. We
should also probably, especially for donations provide a receipt prepared at the time
received and given to the donor or mailed. A list of the receipts should be prepared daily
and reviewed by you and then the receipted deposit slip from the bank initialed by you to
insure the deposit was made.

The bank account should be reconciled monthly and you should have access to the
account on the Internet. You should also review the monthly reconciliation.

Disbursements- As mentioned above we should either by Purchase Order or by pre-

approval insure all but minor purchases are approved by you. The checks should only be
prepared after an invoice or other documentation is submitted and the receipt of the
merchandise or service is verified and the documentation checked for correct prices, tax
properly charged and the disbursement total is correct. The checks should be signed by
you after you make a final check of the documentation. If you think control would be
improved we might consider two signatures on disbursements above a certain amount. I
realize these suggestions may seem too detailed for a small office but this type of detail
documentation may prevent questions in the future.

Petty Cash A small petty cash fund should be set up. I would suggest $200.00. The
amounts paid should be less than $20.00 per transaction and should be documented with
a Petty Cash slip and supporting documents. The fund should be reimbursed from the
bank account and I believe no more than twice per month unless there are unusual
circumstances. You should periodically make a check of the Petty Cash. I would also
suggest the fund be kept in a small box and in a filing cabinet.

Financial Statements- I don't know if actual financial statements have been prepared so
we will have to see what has been done in the past. If a formal, but basic statement has
not been prepared; we may wish to consider a simple chart of accounts to record our
transactions and from this General Ledger prepare monthly financial statements. If a
General Ledger is required I will submit a chart of accounts which we should be able to
set up on the computers at the office,
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Memo to Susan R. Street-Beavers-Indiana Libertarian Party Indianapolis Office page# 3

Payroll- I a not submitting any suggestions on this question as I do have any information
on the current compensation arrangements.

Conclusion: I have prepared this memo with the intent of providing some suggestions
for office operations based on my brief conversation with you. I hope you will find these
suggestions helpful and we can use these basic ideas to set up a more formal office which
will allow us to provide documented and helpful information to the Libertarian Party
members and will insure there will be an honest administration of their funds. Any
suggestions you have will be helpful and I will be happy to add. I hope further these ideas
will provide a basis to begin this work.