1. 2011 AMC INSTITUTE COMMUNITY CONFERENCE “ACCREDITATION - IT’S ALL ABOUT BEST PRACTICES” Suzanne C. Pine, CAE AMC – National Accounts, PCVB AMCI Accreditation Task Force Chair August 6, 2011

2. 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.

3. 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

4. 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)

5. 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

6. 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

7. 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)

8. 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

9. 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

10. 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

11. 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

12. 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)

13. 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

14. AMC INSTITUTE ACCREDITATION “IT’S ALL ABOUT BEST PRACTICES” There are currently 68 AMC Institute Accredited AMCs – Won’t you join us?