Financial Responsibilities

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Financial Responsibilities
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Financial Responsibilities
Objectives

• Organizational Structure
• Getting Started
• Understand the importance of and how to develop a
  budget
• Criticality of tracking expenditures
• Performance and Accountability
• Reporting Guidelines
• Annual Audit

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Financial Responsibilities
Financial Organizational Structure
501(c)(3) Organization a charitable organization
that is organized and operated exclusively for
religious, charitable, scientific, testing for
public safety, literary, or educational purposes,
or to foster national or international amateur
sports competition (but only if no part of its
activities involve the provision of athletic
facilities or equipment), or the for prevention
of cruelty to children or animals, no part of the
net earnings of which inures to the benefit of
any private shareholder or individual, no
substantial part of the activities of which is
carrying on propaganda, or otherwise attempting,
to influence legislation and which does not
participate in, or intervene in (including the
publishing or distributing of statements), any
political campaign on behalf of (or in opposition
to) any candidate for public office.
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Financial Responsibilities
Getting Started

• Preparation and Submittal of Form SS-4
  (Application for Employer Identification Number)
• National Office submits Form SS-4 to IRS after
  chapter is approved
• Use Employer Identification Number (EIN) for bank
  accounts
• An EIN, also known as a Federal Tax
  Identification Number, is a nine-digit number
  that the IRS assigns to business entities. The
  IRS uses this number to identify taxpayers that
  are required to file various business tax
  returns. EINs are used by employers, sole
  proprietors, corporations, partnerships,
  non-profit organizations, trusts and estates,
  government agencies, certain individuals and
  other business entities.
• EINs distinguish chapters from each other.

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Financial Responsibilities
Budget Planning

• A Budget is
• National Budget Procedures
• Formation developing a budget (plan)
• Execution managing the budget during the year
• Reporting giving an official account of actual
  amounts of money received and spent
• Chapter Budget Procedures
• Estimates of amounts of money to be received and
  spent for various purposes in a given period of
  time
• Tool for effective planning and management
• Constitutional and fiduciary responsibilities
• Basis for evaluating results
• Accomplishments versus goals
• An annual plan

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Financial Responsibilities
Budget Planning

• Items Needed to Prepare the Budget
• List of program(s) adopted for the coming year
• Prior years total income and disbursement by
  category
• Current year-to-date total income disbursement
  and
• Funding resources are aligned to meet the program
  of work.
• Its critical to plan, act, and deliver dont
  over obligate!
• Plan to maintain chapter solvency.

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Financial Responsibilities
Budget Planning Example
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Financial Responsibilities
Budget Formation

• Development Duty of the Finance Committee
• ALL Officers and committee chairpersons submit
  requests
• Expenditure Request Form
• Goals and Justifications
• Estimates based on historical data
• Adjustments for changes in costs, e.g. inflation

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Financial Responsibilities
Budget Formation

• Overall Chapter Budget
• Income
• Program1 (budget plan)
• Program2 (budget plan)
• Membership Dues
• Donations
• Expenses
• Program1 (budget plan)
• Program2 (budget Plan)
• Membership Dues to National
• Membership Dues to Region

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Financial Responsibilities
Budget Execution

• Based on an approved budget
• Member approval of proposed activities prior to
  incurring expenses
• Availability of funds
• Receipts for all revenues
• Signatures of persons submitting and receiving
  funds
• Voucher - request for disbursement of funds
• Signatures verifying
• approval of expenditure (Secretary)
• availability of funds (Treasurer)
• Signatures of persons disbursing and receiving
  funds
• Periodic comparison of actual revenues and
  expenses with budget
• For significant differences
• Modify or cancel planned programs/activities
• Redress budget

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Financial Responsibilities
Tracking Expenditures

• Committee Chair shall submit an expenditure
  report to the Finance Chair
• A proposed expenditure report prior to approval
  for the event and an actual expenditure, at the
  conclusion of the event
• Document each line item with associated cost
• The treasurer should track all expenses in
  budget worksheets, to reflect revenue and
  disbursements
• For all executed activities

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Financial Responsibilities
Reporting

• Treasurers reports are not Finance Reports
• Monthly Financial Reports (Finance Chair)
• Budget tracking and reporting
• Not a record of each transaction
• Committees Activity Reports
• Periodic or on completion of activity
• Sources and amounts of revenues and expenses
• Transactions recorded by category
• Disclosure of Financial Statements
• Audits
• IRS Form 990
• Submit annual financial reports on time
• Penalties for not reporting include
• Suspension of Chapter
• Revocation of Charter
• Exclusion from IRS group exemption

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Financial Responsibilities
Treasurers Responsibilities

• Custodian of Chapter Funds
• Obtain a signature card
• Collect Membership dues and forward dues along
  with the membership report to National Office
• Maintain accurate financial records
• File IRS Form 990 with National Organization by
  March 15
• Disburse funds and pay bills promptly as approved
  by the Executive Committee
• Perform all duties as specified in the bylaws
• Bonded or two signatures required
• Serve as ex officio member of the Finance
  Committee
• Work closely with Membership Chair to assure
  Chapter and National membership records are
  accurate
• Expedite collection and remittance of membership
  dues

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Financial Responsibilities
Treasurers Responsibilities

• Treasurers essential items
• Ledger
• Checkbook
• Receipt book
• File
• Records of all receipts should be accurate and
  up-to-date
• Prepare an annual final report, consolidating by
  category all transactions during the fiscal year.
• Checkbook should be balanced monthly
  Reconciliation recorded on bank statement
• Prepare a treasurers report for the
  chapter/region meeting (monthly)
• Report the balance on hand (beginning and end of
  reporting period
• Deposit chapter/region funds

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Financial Responsibilities
Bank Reconciliation Steps

• Bank Reconciliation steps
• Verify all amounts on bank statement with amounts
  in checkbook.
• Place the amount of bank balance in the
  appropriate space on the back of the bank
  statement.
• Add any deposits not noted on the statement
• Deduct all outstanding checks.
• Adjusted balance should agree with the checkbook
  balance.

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Financial Responsibilities
SUMMARY
Budget Preparation Budget Justification Budget
Execution Budget Reporting Fiscal
Integrity Accountability Credibility
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Financial Responsibilities