Chapter Financial Management

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Chapter Financial Management

Michael Kerns

Past President


National Capital Chapter

Bruce Sufranski

ASSE 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
ANNUAL
Cash 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
3000
Mtg Fees
400
200
200
800
100
100
200
200
200
300
2700
Advertising
0
Conf/Sem
2000
3000
5000
Special Proj
0
Interest
45
45
45
45
180
Other
0
Total Revenue (Receipts)
300
500
845
400
400
1045
2300
3300
445
400
400
545
10880
EXPENSES
Cash Disbursements
MEETINGS
Meals
335
170
170
650
80
80
170
170
170
245
2240
Spkr Gifts
25
50
25
100
Other
100
100
CONF/SEM
Meals/Break
2000
2000
Spkr Exp
700
700
Bks/Material
500
500
Other
500
500
NEWLETTER
Printing
100
100
100
100
100
100
100
100
100
100
100
100
1200
Postage
60
60
60
60
60
60
60
60
60
60
60
60
720
Other
0
TRAVEL
Officers
825
25
25
525
1400
Other
0
PUBLICITY
400
400
SPCL PROJ
0
ADMIN
30
30
30
30
30
30
30
30
30
30
30
250
580
SCHOLARSH
0
OTHER
0
Total Expenses (Disbursements)
190
190
1375
360
360
1015
670
3970
360
385
360
1205
10440
NET INCOME
Excess Revenue
over 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 1

APRIL

1
st



Beginning of fiscal year

15
th



Previous month
financial report

MAY

15
th



Previous month
financial report

31
st



Previous fiscal year
financial report to ASSE

JUNE

15
th



Previous month
financial report


Quarter 2

JULY

15
th



Previous month
financial report


AUGUST

15
th



IRS deadline For 990,
990EZ, 990N & 990T

15
th



Previous month
financial report

15
th



Proof of tax filing or
extension to ASSE

SEPTEMBER

15
th



Previous month
financial report


Quarter 3

OCTOBER

15
th



Previous month
financial report

NOVEMBER

15
th



Previous month
financial report

DECEMBER

15
th



Previous month
financial report

Quarter 4

JANUARY

15
th



Previous month
financial report


FEBRUARY

1
st



Executive Committee
approval of next years
budget

15
th



Previous month
financial report


MARCH

1
st



Chapter dues
notification due to ASSE

15
th



Previous month
financial report

31
st



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 Report

American Society of Safety Engineers _________________ Chapter

Annual Financial Report

Period Ending March 31, 2011

INCOME STATEMENT

REVENUES
(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 Balance

Savings

$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 literatu
re
which describes the organization's programs and mission.



Chapter Treasurer (Print and Sign Name)

Date

REPORT DUE 5/31/2011

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






Annual Financial Report
-

Samples


By March 1
: Chapter Dues Change Notification Due



IF changing, notify HQ
-

email the following information to:
chapterservices@asse.org



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


bsufranski@asse.org


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 Guidelines


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 &
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)





















Musts & Shalls

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)?


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


Forms


Accounting Standard Operating Guidelines


Policies and procedures


Electronic Banking


Email alerts, electronic statements


Internal Financial Audits


Audit checklist


3
rd

Party CPA Firm


Officer Training


Leadership Training


Officer Central


Regional Operating Committee meetings ROCs


Resources



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?