Financial Management - Snake River Chapter

Report
Chapter Financial Management
Michael Kerns
Past President – National Capital Chapter
Bruce Sufranski
ASSE Director of Finance/Controller
October 5, 2012
Financial Management: Agenda
 Treasurer Roles
 Chapter Leadership
 Financial Manager
 Treasurer Responsibilities
 Strategic Planning
 Financial Management – Focus of today’s session
Treasurer’s Roles: Chapter Leadership
 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: Financial Manager
 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
Financial Management – General
Concepts
 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:
 Safeguard ChapterResponsibilities
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
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
REVENUE
Cash Receipts
Dues
Mtg Fees
Advertising
Conf/Sem
Special Proj
Interest
Other
Total Revenue (Receipts)
EXPENSES
Cash Disbursements
MEETINGS
Meals
Spkr Gifts
Other
CONF/SEM
Meals/Break
Spkr Exp
Bks/Material
Other
NEWLETTER
Printing
Postage
Other
TRAVEL
Officers
Other
PUBLICITY
SPCL PROJ
ADMIN
SCHOLARSH
OTHER
Total Expenses (Disbursements)
NET INCOME
Excess Revenue
over Expenses
APR
300
MAY
500
JUN
400
400
JUL
200
200
AUG
200
200
45
300
500
SEP
200
800
OCT
200
100
NOV
200
100
2000
3000
45
DEC
200
200
JAN
200
200
FEB
200
200
45
845
400
400
1045
2300
3300
445
400
400
335
25
170
170
650
50
100
80
80
170
170
170
ANNUAL
MAR
BUDGET
200
3000
300
2700
0
5000
0
45
180
0
545
10880
245
25
2000
700
500
500
100
60
100
60
100
60
100
60
100
60
825
100
60
100
60
100
60
2240
100
100
2000
700
500
500
100
60
25
100
60
100
60
25
100
60
1200
720
0
525
30
30
30
30
30
30
30
30
30
30
30
250
190
190
1375
360
360
1015
670
3970
360
385
360
1205
1400
0
400
0
580
0
0
10440
110
310
-530
40
40
30
1630
-670
85
15
40
-660
440
400
11
Treasurer Responsibilities






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: Auditing
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 committeedeficiencies 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?
Critical ASSE Dates
APRIL
– Beginning of fiscal year
15th – Previous month
financial report
MAY
– Previous month
financial report
31st – Previous fiscal year
financial report to ASSE
JUNE
– Previous month
financial report
Quarter 1
1st
15th
15th
Quarter 2
JULY
15th – Previous month
financial report
AUGUST
15th – IRS deadline For 990,
990EZ, 990N & 990T
15th – Previous month
financial report
15th – Proof of tax filing or
extension to ASSE
SEPTEMBER
15th – Previous month
financial report
Quarter 3
OCTOBER
15th – Previous month
financial report
NOVEMBER
15th – Previous month
financial report
DECEMBER
15th – Previous month
financial report
Quarter 4
15th
JANUARY
– Previous month
financial report
1st
FEBRUARY
– Executive Committee
approval of next years
budget
15th – Previous month
financial report
MARCH
– Chapter dues
notification due to ASSE
15th – Previous month
financial report
31st – End of fiscal year
1st
Treasurer Responsibilities:
Reporting
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
Annual Financial Report
Submitted to ASSE HQ
Excel spreadsheet
American Society of Safety Engineers _________________ Chapter
Annual Financial Report
Electronically available on
ASSE Officer Central
Website
Period Ending March 31, 2011
INCOME STATEMENT
REVENUES (Cash Receipts)
Dues
$
-
Meeting Fees
$
-
Conference/Seminars
$
-
Special Project
$
-
Interest
$
-
Advertising
$
-
$
-
$
-
Other
$
-
Gross (total) revenue from Sections
$
-
$
-
Lunch/Dinner
Speaker Gifts
$
-
Other
$
-
$
-
$
-
Books & Materials
$
-
Other
$
-
$
-
$
-
$
-
$
-
$
-
Publicity
$
-
Special Project
$
-
Administrative
$
-
Scholarship
$
-
Bank Fees
$
-
Web Hosting
$
-
Other
$
-
Gross (total) expense from Sections
$
Sale of Product **
Sale of Services
(Unrelated Business)
(Unrelated Business)
(Unrelated Business)
REVENUE (Total Receipts) $
-
EXPENSES (Total Disbursements) $
-
$
-
EXPENSES (Cash Disbursements)
MEETINGS:
CONF/SEMINAR:
NEWSLETTER:
Meals/Breaks
Speaker Expenses
Printing
Postage & Mailing
Other
TRAVEL:
Officers
Other
-
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 Balance
Savings
$0.00
Checking
$0.00
Other/CD
$0.00
Deposit In Transit
$0.00
(Outstanding Checks)
$0.00
NEW CASH BALANCE = Total Bank Balance
MUST MATCH
$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?
Is the Chapter’s Gross Receipts for this Fiscal Year between $50,000 and $200,000 and total assets less than $500,000?
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 990N must be filed).
(If so, a 990EZ must be filed)
(If so, a 990 must be filed)
Has or will either a 990N, 990EZ, or 990 been filed for fiscal year 2011 (tax return year 2010)?
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).
This report includes the financial activities of all Sections chartered for the Chapter.
** 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)
Date
REPORT DUE 5/31/2011
Yes____
No____
Yes____
No____
Yes____
No____
Yes____
No____
Yes____
No____
Yes____
No____
Annual Financial Report - Samples
Shown below are actual financial reports submitted ASSE HQ using the
Excel spreadsheet:
Critical Chapter Financial Reports
 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
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
21
Chapter IRS Responsibilities
 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]
IRS Filings – Tax Year 2010 and Later
 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
Taxes: Common Misconceptions
 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.
Questions?
Chapter Financial Guidelines
 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.
Musts & Shalls
•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 th
Chapter Executive Committee, such as $20. (petty cash-B)
Musts & 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)
Musts & Shalls
•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)
Financial “Red Flags”
Exercise
•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”
Exercise
•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)?
Forms
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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
Resources
 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
Chapter Treasurers: Resources
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
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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
Questions?

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