Chapter Financial Management Training

Chapter Financial Management Training
Operate Chapter per the Board of Directors
Approved Manual for Chapter Operations.
Chapter Treasurer Duties
Financial Accounting & Banking
Chapter Annual Audits
Revenue and Taxation Reporting
Fiduciary Duties
Must file both federal and state taxes to keep
their non-profit status
Should have an annual audit
Should use the services of a CPA
1- There are penalties for chapters not filing both federal
and state taxes;
2- Society can also be at risk when chapters lose their
non-profit status. Chapters should check to see if their
state requires separate non-profit filing.
Chapter Presidents to Prepare Balanced Budgets for Approval by BOG.
Treasurer shall make all Deposits and issue all checks as authorized by the
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
Responsible to File Tax Returns!!!-ASHRAE WEB SITE.
The Chapter Officers including the Chapter Treasurer and the At-Large Board
of Governors, has a fiduciary duty to the chapter.
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
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), in the ASHRAE Foundation or a Chapter Foundation.
Set up audit committee made up of Past Presidents
and or / Senior ASHRAE Members to perform annual
Larger Chapters may want to consider outside
accounting firms to perform financial audits.
Chapter Treasurers should not audit books for their
Audit Findings should be presented to Chapter BOG
once per year.
All USA Chapters must complete annual IRS Form 990
tax returns.
There are separate forms for Small and Large Chapters
Who Must File
Most small tax-exempt organizations with gross receipts that are normally
$25,000 or less must file the e-Postcard. Exceptions to this requirement
• Organizations that are included in a GROUP RETURN, and Churches,
their integrated auxiliaries, and conventions or associations of churches.
• The following organizations cannot file the e-Postcard but must file
different forms instead:
• Tax-exempt organizations with annual gross receipts that are
normally greater than $25,000 must file Form 990 or Form 990-EZ;
• Private Foundations must file Form 990-PF;
• Section 509(a) supporting organizations that are required
to file Form 990or Form 990-EZ.
990 Filing thresholds for the year 2010 and later (filed
in 2011 and later) have changed for all organizations
required to file a 990-series return.
Annual Electronic Filing requirements for Small Exempt
Organizations- Form 990-N (E-Postcard)
Small ASHRAE Chapters whose gross receipts are normally
$50,000 and less must complete 990-N form (but may
choose to file a complete Form 990 or Form 990-EZ).
In prior years only organizations with gross receipts normally
less than $25,000 could file the Form 990-N (e-postcard).
Annual Electronic Filing requirements for Large Exempt
Organizations - Form 990 or 990-EZ.
Large ASHRAE Chapters whose gross receipts are normally
greater than $50,000 and less than $200,000 or total assets
are less than $500,000 must complete Form 990 or Form
ASHRAE Chapters with gross receipts that are
$200,000 or less or total assets are $500,000 or
less must file Form 990.
Private foundations must file Form 990-PF
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
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
November 15th. (Check with IRS if not known)
You cannot file until after your tax year ends.
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.
(Usually the Chapter President)
Confirmation of annual gross receipts.
Chapters who fail to file tax returns risk IRS fines.
They also would jeopardize the Society’s Tax
Exempt Status
The Society could dissolve the chapter
As a Chapter Officer you have a Fiduciary duty to your
ASHRAE Chapter.
The - Dictionary defines a fiduciary as a
person who has the power and obligation to act for
another…under circumstances which require total trust,
good faith and honesty.
A fiduciary has three primary duties
Duty of Care
Duty of Loyalty
Duty of Obedience
Board members must exercise reasonable
care in overseeing the organizations
financial and operational activities.
Board members must act solely in the
best interests of the organization and its
constituents, and not for personal gain.
Board members must act in accordance with
the organization’s 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.
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.
ROS MBO #3 Chapter Treasurer Training.pptx
A common misconception is that volunteers are shielded
from liability. In fact, though they do enjoy some protection
from financial responsibility, that protection isn’t 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
ASHRAE Chapters must avoid the co-mingling of investment
funds and operating accounts.
Research Promotion events are to have separate accounting
Make every effort possible for Chapter Member and others to write checks
specifically to “ASHRAE Research” and not simply to ASHRAE or the local
Chapter. This allows a complete tax deduction to be taken by the donor.
Scholarship Funds are to be in a separate account within the
chapter. (see example next slide)
Operating funds are to accounted for in each of the separate
committee accounts.
However the Chapter event is advertised is how the funds are to
be allocated. I.e. if it is a RP event then ALL the money goes to
RP not just the net amount.
Enjoy your participation in ASHRAE

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