ASHRAE Chapter Best Practice

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ASHRAE Chapter Best Practice

• Chapter
• Financial Risk Management

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Financial Risk Management

• Chapter Treasurer Duties
• Financial Accounting Banking
• Chapter Annual Audits
• Revenue and Taxation Reporting
• Fiduciary Duties

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Chapter Treasurers

• Chapter Presidents to Prepare Balanced Budgets
  for Approval by BOG.
• Treasurer shall make all Deposits and issue all
  checks as authorized by the BOG.
• Treasurer to Balance Monthly Statements Present
  to BOG for Review Approval Keep Records.
• Annual Independent Audit Committee appointed by
  BOG-Elect Prior to Annual Chapter Meeting.
• Chapter Account used for Operations Only.
• Use Separate Accounts for Special Events such as
  CRC Fund or Scholarships.
• Responsible to File Tax Returns!!!-ASHRAE WEB
  SITE.

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Financial Accounting and Banking

• It is recommended that each Chapter have its own
  copy of a reputable Financial Software.
• At least three Chapter officers should have
  signing authority.
• At least two signatures are required on each
  check. (for sums of 100
  and greater.)
• Consider separate bank accounts for high dollar
  special events.
• Where possible all Research Donations should be
  forwarded directly to ASHRAE Research.
• All investments should be in safe low risk
  investments. (I.e. bonds,
  term deposits).

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Chapter Financial Audits

• Set up audit committee made up of Past Presidents
  and or / Senior ASHRAE Members to perform annual
  audit.
• Larger Chapters may want to consider outside
  accounting firms to perform financial audits.
• Chapter Treasurers should not audit books for
  their year.
• Audit Findings should be presented to Chapter BOG
  once per year.

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Revenue and Taxation Reporting

• All USA Chapters must complete annual IRS Form
  990 tax returns.
• There are separate forms for Small and Large
  Chapters.

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Revenue and Taxation Reporting Small ASHRAE
Chapter

• Annual Electronic Filing requirements for Small
  Exempt Organizations- Form 990-N (E-Postcard)
• http.epostcard.form990.org
• Small ASHRAE Chapters whose gross receipts are
  normally 25,000 and less must complete 990-N
  form.

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Revenue and Taxation Reporting Large ASHRAE
Chapter

• Annual Electronic Filing requirements for Large
  Exempt Organizations - Form 990 or 990-EZ.
• Large ASHRAE Chapters whose gross receipts are
  normally greater than 25,000 must complete Form
  990 or 990-EZ.
• The Board of Governors of the chapter should
  review the completed 990 form before it is sent
  to the IRS
• Should consider using an outside CPA firm to
  complete the tax return

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Revenue and Taxation Reporting

• Your Tax filing is due every year by the end of
  the 15th day of the 5th month after the close of
  your year end.
• For most Chapters the year ends on June 30 and
  the Tax Filing must be completed by Nov.15th.
  (Check with IRS if not known)
• You cannot file until after your tax year ends.

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Information Needed To File

• Employee Identification Number (EIN) or
  alternatively Taxpayer Identification Number
  (TIN).
• Tax Year.
• Legal name. (ASHRAE Chapter Chartered name)
• Mailing address.
• Alternative name organization uses.
• Name and address of principal officer.
  (Chapter President)
• Confirmation of annual gross receipts.

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Late Filing or Failure to File

• Chapters who fail to file tax returns risk IRS
  fines.
• They also would jeopardize the Societys Tax
  Exempt Status
• The Society could dissolve the chapter

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UNDERSTANDING FIDUCIARY DUTIES

• As a Chapter Officer you have a Fiduciary duty to
  your ASHRAE Chapter.
• The Law.com - Dictionary defines a fiduciary as a
  person who has the power and obligation to act
  for anotherunder circumstances which require
  total trust, good faith and honesty.

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Fuduciary Primary Duties

• A Fiduciary has three primary duties
• Duty of Care
• Duty of Loyalty
• Duty of Obedience

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Duty of Care

• Board members must exercise reasonable care in
  overseeing the organizations financial and
  operational activities.

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Duty of Loyalty

• Board members must act solely in the best
  interests of the organization and its
  constituents, and not for personal gain.

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Duty of Obedience

• Board members must act in accordance with the
  organizations mission, charter and bylaws, and
  any applicable state of federal laws.
• Board members who violate these duties may be
  held personally liable for any financial harm the
  organization suffers as a result.

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Avoiding Conflicts of Interest

• One of the most important components of the duty
  of loyalty is the obligation to avoid conflicts
  of interests.
• Step aside or abstain from voting when ever there
  is an appearance of a conflict of interest.
• Please review the ASHRAE Codes of Ethics.
  http//www.ashrae.org/publications/detail/14686

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Can a Volunteer be Liable?

• A common misconception is that volunteers are
  shielded from liability. In fact, though they do
  enjoy some protection from financial
  responsibility, that protection isnt absolute.
• ASHRAE Security Privacy Policy does not apply
  to sites of any ASHRAE chapter, region, student
  branch, technical committee or other group
  affiliated or associated with the Society.

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ASHRAE Chapter Best Practice

• Enjoy your participation in ASHRAE