Chapter Financial Management Michael Kerns Past President – National Capital Chapter Bruce...

Chapter Financial Management

Michael KernsPast President – National Capital ChapterBruce SufranskiASSE Director of Finance/Controller

October 5, 2012

Treasurer Roles Chapter Leadership Financial Manager

Treasurer Responsibilities Strategic Planning Financial Management – Focus of today’s session

Financial Management: Agenda

Executive Committee Leadership Role: “Beyond Bean Counting”

Participate in all chapter business decisions Focus on Membership Value / Experience

To maintain chapter’s financial well being, must be an active participant on Executive Committee

Treasurer’s Roles: Chapter Leadership

Strategic Planning – long term view Set Chapter Direction and Priorities Assess Financial Impact of Business Decisions

Are we providing best value for our Members Do revenues exceed expenses Special project initiatives

How to pay for it Plan for the Long-Term

Develop healthy and sustainable Chapter Financial health is key component

Treasurer’s Roles: Chapter Leadership

Financial Management: Responsibilities “Counting the Beans” Safeguard chapter assets Financial Control: annual chapter budget Financial Reporting: monthly/ quarterly/ annually Financial Compliance: IRS tax filings / other

requirements

Treasurer’s Roles: Financial Manager

Use Sound Accounting Practices to Record Transactions GAAP requires “accrual accounting” (probably need to be an

accountant) Most chapters use “cash basis” accounting (like keeping

your check book) Cash comes in = revenue Cash goes out = expense

Keys: Consistency/ Accuracy/ Transparency

Financial Management – General Concepts

Obtain financial records/ tax returns from predecessor History provides important starting point Financial Audit

Prepare Monthly Financial Reports Require Executive Committee Participation

Review financial reports Review bank statements

Financial Management – General Concepts

Safeguard Chapter Assets Guard against loss, theft, fraud, etc.

Chapter Annual Budgeting Short-term view (next 12 Months)

Monthly/ Quarterly/ Annual Reporting How is Chapter doing?

Reports to Chapter Executive Committee Reports to HQ

IRS Tax Filings Stay in compliance

Financial Management: Responsibilities

Safeguarding Chapter Assets

What are your Chapter’s Assets Savings/checking account Investment account (if any) Fixed assets (if any)

How do you safeguard assets? Proper procedures for handling cash receipts Proper procedures for handling cash disbursements

Two Signatures required on checks Monthly financial reports Executive Committee review of financial reports and bank

statements (Guest Access)

Financial Control: Budgeting

Budgeting is key step in financial control Forces critical evaluation of where resources are

going Establishes guidelines for expenditures Requires discipline

Budgeting leads to review of activities Value added vs non-value added

Budgets: An Example

11

REVENUE ANNUALCash Receipts APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR BUDGET

Dues 300 500 400 200 200 200 200 200 200 200 200 200 3000Mtg Fees 400 200 200 800 100 100 200 200 200 300 2700Advertising 0Conf/Sem 2000 3000 5000Special Proj 0Interest 45 45 45 45 180Other 0Total Revenue (Receipts) 300 500 845 400 400 1045 2300 3300 445 400 400 545 10880

EXPENSESCash Disbursements

MEETINGSMeals 335 170 170 650 80 80 170 170 170 245 2240Spkr Gifts 25 50 25 100Other 100 100CONF/SEMMeals/Break 2000 2000Spkr Exp 700 700Bks/Material 500 500Other 500 500NEWLETTERPrinting 100 100 100 100 100 100 100 100 100 100 100 100 1200Postage 60 60 60 60 60 60 60 60 60 60 60 60 720Other 0TRAVELOfficers 825 25 25 525 1400Other 0PUBLICITY 400 400SPCL PROJ 0ADMIN 30 30 30 30 30 30 30 30 30 30 30 250 580SCHOLARSH 0OTHER 0Total Expenses (Disbursements) 190 190 1375 360 360 1015 670 3970 360 385 360 1205 10440

NET INCOMEExcess Revenueover Expenses 110 310 -530 40 40 30 1630 -670 85 15 40 -660 440

Processes all receipts and disbursements of funds. Transfers funds into authorized accounts as needed. Receives and reconciles bank statements monthly. Processes requests for reimbursement of chapter business

expenses. Reviews invoices for payment. With the President and approved by the Executive Committee,

prepares the annual budget. Prepares all financial reports monthly / compares actual to

budget Prepares/files annual tax returns

Treasurer Responsibilities

Processes cash disbursements:

NEVER WRITE A CHECK TO YOURSELF

Treasurer Responsibilities

General Guidelines:

Assures records are in good order and up-to-date Benefit to treasurer: documentation that good procedures

are consistently followed

Internal audit: Completed annually near year end or after

President/Treasurer leaves office Results communicated to Chapter/Region executive

committee-deficiencies corrected

Audit Procedures See website for detailed audit checklist

Treasurer Responsibilities: Auditing

Some Possible Warning Signs: Are financial records organized and readily

available? Is the past treasurer accessible? Have bank statements been reconciled? Have cash / check receipts been deposited? Do cash disbursements (checks written) include

proper support? (e.g., approved invoices) Does the chapter executive committee review the

financial statements regularly?

Treasurer Responsibilities: Auditing

Quarter 1APRIL

1st – Beginning of fiscal year

15th – Previous month financial report

MAY


31st – Previous fiscal year financial report to ASSE

JUNE


Quarter 2JULY


AUGUST

15th – IRS deadline For 990, 990EZ, 990N & 990T


15th – Proof of tax filing or extension to ASSE

SEPTEMBER


Quarter 3OCTOBER


NOVEMBER


DECEMBER


Quarter 4JANUARY


FEBRUARY

1st – Executive Committee approval of next years budget


MARCH

1st – Chapter dues notification due to ASSE


31st – End of fiscal year

Critical ASSE Dates

Financial Reports – Monthly – General Guidelines: Treasurer prepares a monthly financial report for the Executive Board.

The reports should include: Income Statement: Revenues and Expenses Balance Sheet: Assets and Liabilities Highlight areas of concern

Minutes from each Executive Board meeting should reflect the submittal, review, and approval of financial report.

Treasurer should also ensure that Executive Board receives/reviews all bank statements on a regular basis

Treasurer Responsibilities: Reporting

Submitted to ASSE HQ

Excel spreadsheet

Electronically available on ASSE Officer Central Website

Annual Financial ReportAmerican Society of Safety Engineers _________________ Chapter

Annual Financial Report

Period Ending March 31, 2011

INCOME STATEMENTREVENUES (Cash Receipts)

Dues $ -

Meeting Fees $ -

Conference/Seminars $ -

Special Project $ -

Interest $ -

Advertising (Unrelated Business)

$ -

Sale of Product **(Unrelated Business)

$ -

Sale of Services (Unrelated Business)

$ -

Other $ -

Gross (total) revenue from Sections $ -

REVENUE (Total Receipts) $ -

EXPENSES (Cash Disbursements)

MEETINGS:

Lunch/Dinner

$ -

Speaker Gifts $ -

Other $ -

CONF/SEMINAR: Meals/Breaks

$ -

Speaker Expenses $ -

Books & Materials $ -

Other $ -

NEWSLETTER: Printing

$ -

Postage & Mailing $ -

Other $ -

TRAVEL: Officers

$ -

Other $ -

Publicity $ -

Special Project $ -

Administrative $ -

Scholarship $ -

Bank Fees $ -

Web Hosting $ -

Other $ -

Gross (total) expense from Sections $ -

EXPENSES (Total Disbursements) $ -

NET INCOME (Excess Receipts over Disbursements) $ -

PREVIOUS YEAR CASH BALANCE - Total Assets from Previous Year

NEW CASH BALANCE - Previous Year Cash Balance plus Net Income $0.00

Total Assets as of March 31, 2011 / Bank BalanceSavings $0.00

Checking $0.00

Other/CD $0.00 MUST MATCH

Deposit In Transit $0.00

(Outstanding Checks) $0.00

NEW CASH BALANCE = Total Bank Balance $0.00

Only one of the following choices should be checked 'yes':

Is the average of Chapter’s Gross Receipts for this Fiscal Year and the prior two years less than or equal to $50,000? (If so, a 990N must be filed). Yes____ No____

Is the Chapter’s Gross Receipts for this Fiscal Year between $50,000 and $200,000 and total assets less than $500,000? (If so, a 990EZ must be filed) Yes____ No____

Is the Chapter’s Gross Receipts for this Fiscal Year greater than or equal to $200,000 or total assets greater than or equal to $500,000? (If so, a 990 must be filed) Yes____ No____

Has or will either a 990N, 990EZ, or 990 been filed for fiscal year 2011 (tax return year 2010)? Yes____ No____

Is the Chapter’s total unrelated business income (advertising, etc…) less than $1,000 **? (Note: If more than $1,000 a 990T form MUST be filed). Yes____ No____

This report includes the financial activities of all Sections chartered for the Chapter. Yes____ No____

** Does not generate UBIT if (1) includes an educational/information message on the product or (2) is accompanied by literature which describes the organization's programs and mission.

Chapter Treasurer (Print and Sign Name) DateREPORT DUE 5/31/2011

Shown below are actual financial reports submitted ASSE HQ using the Excel spreadsheet:

Annual Financial Report - Samples

Nation Capital Chapter

Southern Colorado Chapter

Arizona Chapter

By March 1: Chapter Dues Change Notification Due

IF changing, notify HQ - email the following information to: [email protected] Chapter Name/ your name & title New Dues Amount / Old Dues Amount Date when Chapter approved new dues amount

By May 31: Upload annual financial report to http://www.asse.org/committees/finance-reports.asp

By August 15: File tax return(s) with the IRS Copy of the Chapter’s tax return, proof of filing, or

proof of extension

Critical Chapter Financial Reports

21

General Chapter Financial Information

• ASSE is tax exempt - Section 501(C) 6• Exempt from Federal income tax

• Each chapter is incorporated in the State of Illinois• Has its own Federal tax identification number• Critical to use correct tax id on IRS tax returns

• May be tax exempt for your state• Check with your state tax authority

File appropriate tax return Use correct tax id number-THIS IS CRITICAL Keep good records-pay attention to deadline

Consider hiring a tax accountant if chapter is large Resources

IRS Website (www.irs.gov) and help line “Chapter Tax Responsibilities” webinar-4/25/12 ASSE Director of Finance, Bruce Sufranski

[email protected]

Chapter IRS Responsibilities

Required Form Depends on Chapter Size Gross Receipts <= $50,000

File Form 990N (ePostcard) Gross Receipts between $50,000 and

$200,000 and Total Assets < $500,000 File Form 990EZ or Form 990

Gross Receipts =>$200,000 OR Total Assets =>$500,000 File Form 990

Unrelated Business Income >$1000 File Form 990T

IRS Filings – Tax Year 2010 and Later

ASSE is exempt from state sales tax. NO - Most states do not exempt from sales tax.

All income is free from federal income tax. NO - Revenue from unrelated activities is taxable.

Ex. Advertising, Sale of services, certain product sales, etc.

Donations to ASSE are tax deductible. NO - ASSE is not a charitable organization.

However, the ASSE Foundation IS a charitable organization and therefore donations to the Foundation are tax deductible.

Taxes: Common Misconceptions

Questions?

Reduce risk of unlawful or unethical transactions.

Reduce the risk of civil liability to Officers. Provide Best Practice Accounting Guidelines for

Chapters to adopt. Provide “Transparency” of Financial

Management of Chapter’s funds.

Chapter Financial Chapter Financial GuidelinesGuidelines

•No monies obtained by the Chapter will be deposited into a personal bank account or any other account, which has not been approved by the Executive Committee. (cash receipts-A)

•All cash accounts owned by the Chapter will be held in financial institutions, which are federally insured and have been approved by the Executive Committee. (cash receipts-B)

•All disbursements must be pre-approved by a quorum of the Executive Committee. (cash disbursements-A)

•Checks shall never be written directly to an individual by the same individual. (cash disbursements-B)

•Approval for an expense by the member must be indicated on the check request voucher, or at minimum, by e-mail. (cash disbursements-H)

•Checks shall never be cashed through the petty cash fund. (petty cash-A)

•A single disbursement from petty cash shall never exceed a pre-set level, determined by the Chapter Executive Committee, such as $20. (petty cash-B)

Musts & ShallsMusts & Shalls

•The petty cash fund shall be operated on an impress basis which means the amount of the petty cash fund should remain constant: (example- change for meetings/PDCs) (petty cash-C)

•When it is time to replenish the petty cash fund, the Treasurer shall total out the expenses made and identify those expenses by general ledger account number. (petty cash-C1)

•In the absence of backup materials, receipts for the purchase must be provided to the Treasurer for attachment to the check request within two weeks from the check date. (purchases-A3)

•No alcohol may be included on an expense report. (purchases-C3)

•All contracts to exceed $1,500 over the course of the year must be approved by the Chapter Executive Committee and the contract approved by the Region VP. (purchases-E1)

•Any contract potential conflict of interest must be presented to the Chapter Executive Committee before the contract is accepted. (purchases-E2)

•The Minutes from each Chapter Executive Committee meeting shall reflect the submittal and approval of the monthly financial report by the committee. (financial reporting-1)


•The Chapter Executive Committee shall approve new signers to each bank account. (new chapter checklist-A)

•The Chapter Executive Committee shall approve any new and necessary bank accounts. (new chapter checklist-B)

•As required, new signers shall complete the appropriate signature card and Chapter resolutions. (new chapter checklist-C)

•The President shall represent the Chapter at meetings and conferences, unless other attendees are needed. (travel-B1)

•The dates, location, and reason for travel must be identified and approved by the Chapter Executive Committee. (travel-B2)

•The vote to approve the travel shall include a discussion on the requested approximate travel expenses to be covered. (travel-B3)


Document

Financial “Red Flags”Financial “Red Flags”ExerciseExercise

•Does the Chapter use a bank account authorized by the Executive Committee?

•Does more than one person have access to the Chapter bank account?

•Is the Chapter bank account in the Chapter’s name?

•Is the Chapter Articles of Incorporation up to date?

•Are more than one Officer listed on the bank signature cards?

•Does the Chapter use attendance records at events where money is received?

•Does the Chapter use a cash receipt book to record cash receivables?

•Does the Chapter conduct an annual internal audit?

•Does the Chapter audit cash receipts against the deposit slips and attendance records?

•Does the audit committee include members other than President and Treasurer?

•Does the Treasurer provide monthly financial reports?

Financial “Red Flags”Financial “Red Flags”ExerciseExercise

•Does the Treasurer respond to check requests and issue checks timely?

•Is the Treasurer employed?

•Does the Chapter use electronic banking and email alerts?

•Does more than one officer have access to an authorized Chapter P.O. Box?

•Does more than one officer have access to Chapter bank statements?

•Does the Treasurer attend regular Executive Board meetings?

•Does more than one officer have access to other accounts (PayPal, Cvent)?

Officer Turnover Checklist Check Request Travel Reimbursement Monthly Financial Report Cash Receipt Asset Log Meeting Attendance Log (used to reconcile with cash

receipts) Internal audit checklist Financial Red-Flag Checklist

FormsForms

Accounting Standard Operating Guidelines Policies and procedures

Electronic Banking Email alerts, electronic statements

Internal Financial Audits Audit checklist 3rd Party CPA Firm

Officer Training Leadership Training Officer Central Regional Operating Committee meetings ROCs

ResourcesResources

Many tools and resources to help do your job Obtain records from your predecessor!

ASSE Website – Officer Central Treasurer Training Financial Planning Checklist Budgeting Audit Guidelines Travel Expense Guidelines

ASSE Finance Staff Other Chapter Treasurers

Chapter Treasurers: Resources

Questions?

Chapter Financial Management Michael Kerns Past President – National Capital Chapter Bruce...

Documents

Transcript of Chapter Financial Management Michael Kerns Past President – National Capital Chapter Bruce...