Financial Responsibilities

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Financial Responsibilities

  1. 1. Financial Responsibilities
  2. 2. Financial Responsibilities Objectives… <ul><li>Organizational Structure </li></ul><ul><li>Getting Started </li></ul><ul><li>Understand the importance of and how to develop a budget </li></ul><ul><li>Criticality of tracking expenditures </li></ul><ul><li>Performance and Accountability </li></ul><ul><li>Reporting Guidelines </li></ul><ul><li>Annual Audit </li></ul>
  3. 3. Financial Responsibilities Financial Organizational Structure… <ul><li>501(c)(3) Organization </li></ul><ul><ul><li>a charitable organization that is organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or the for prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. </li></ul></ul>
  4. 4. Financial Responsibilities Getting Started… <ul><li>Preparation and Submittal of Form SS-4 (Application for Employer Identification Number); </li></ul><ul><li>National Office submits Form SS-4 to IRS after chapter is approved; </li></ul><ul><li>Use Employer Identification Number (EIN) for bank accounts: </li></ul><ul><ul><li>An EIN, also known as a Federal Tax Identification Number, is a nine-digit number that the IRS assigns to business entities. The IRS uses this number to identify taxpayers that are required to file various business tax returns. EINs are used by employers, sole proprietors, corporations, partnerships, non-profit organizations, trusts and estates, government agencies, certain individuals and other business entities. </li></ul></ul><ul><li>EIN’s distinguish chapters from each other. </li></ul>
  5. 5. Financial Responsibilities Budget Planning… <ul><li>A Budget is … </li></ul><ul><li>National Budget Procedures </li></ul><ul><ul><li>Formation: developing a budget (plan) </li></ul></ul><ul><ul><li>Execution: managing the budget during the year </li></ul></ul><ul><ul><li>Reporting: giving an official account of actual amounts of money received and spent </li></ul></ul><ul><li>Chapter Budget Procedures </li></ul><ul><li>Estimates of amounts of money to be received and spent for various purposes in a given period of time </li></ul><ul><li>Tool for effective planning and management </li></ul><ul><ul><li>Constitutional and fiduciary responsibilities </li></ul></ul><ul><li>Basis for evaluating results </li></ul><ul><ul><li>Accomplishments versus goals </li></ul></ul><ul><li>An annual plan </li></ul>
  6. 6. Financial Responsibilities Budget Planning… <ul><li>Items Needed to Prepare the Budget: </li></ul><ul><ul><li>List of program(s) adopted for the coming year; </li></ul></ul><ul><ul><li>Prior year’s total income and disbursement by category; </li></ul></ul><ul><ul><li>Current year-to-date total income & disbursement; and </li></ul></ul><ul><li>Funding resources are aligned to meet the program of work. </li></ul><ul><li>It’s critical to plan, act, and deliver… don’t over obligate! </li></ul><ul><li>Plan to maintain chapter solvency. </li></ul>
  7. 7. Financial Responsibilities Budget Planning Example… Planning Efforts Calendar Year Timeframe Projected Costs Host a training forum (agenda TBD) Summer 2008 Revenue $1000 Expenses $250 Host a membership drive and/or a Formal Banquet Summer 2008 to Fall 2009 Revenue $2000 Expenses $500 Compile career data for BIG members within the Chapter By Year-End 2008 $0 Update the Chapter Directory By Year End 2008 $0
  8. 8. Financial Responsibilities Budget Formation… <ul><li>Development – Duty of the Finance Committee </li></ul><ul><li>ALL Officers and committee chairpersons submit requests </li></ul><ul><ul><li>Expenditure Request Form </li></ul></ul><ul><ul><li>Goals and Justifications </li></ul></ul><ul><li>Estimates based on historical data </li></ul><ul><ul><li>Adjustments for changes in costs, e.g. inflation </li></ul></ul>
  9. 9. Financial Responsibilities <ul><li>Overall Chapter Budget </li></ul><ul><ul><li>Income </li></ul></ul><ul><ul><ul><li>Program1 (budget plan) </li></ul></ul></ul><ul><ul><ul><li>Program2 (budget plan) </li></ul></ul></ul><ul><ul><ul><li>Membership Dues </li></ul></ul></ul><ul><ul><ul><li>Donations </li></ul></ul></ul><ul><ul><li>Expenses </li></ul></ul><ul><ul><ul><li>Program1 (budget plan) </li></ul></ul></ul><ul><ul><ul><li>Program2 (budget Plan) </li></ul></ul></ul><ul><ul><ul><li>Membership Dues to National </li></ul></ul></ul><ul><ul><ul><li>Membership Dues to Region </li></ul></ul></ul>Budget Formation…
  10. 10. Financial Responsibilities Budget Execution… <ul><li>Based on an approved budget </li></ul><ul><li>Member approval of proposed activities prior to incurring expenses </li></ul><ul><ul><li>Availability of funds </li></ul></ul><ul><li>Receipts – for all revenues </li></ul><ul><ul><li>Signatures of persons submitting and receiving funds </li></ul></ul><ul><li>Voucher - request for disbursement of funds </li></ul><ul><ul><li>Signatures verifying: </li></ul></ul><ul><ul><ul><li>approval of expenditure (Secretary) </li></ul></ul></ul><ul><ul><ul><li>availability of funds (Treasurer) </li></ul></ul></ul><ul><ul><li>Signatures of persons disbursing and receiving funds </li></ul></ul><ul><li>Periodic comparison of actual revenues and expenses with budget </li></ul><ul><li>For significant differences </li></ul><ul><ul><li>Modify or cancel planned programs/activities </li></ul></ul><ul><ul><li>Redress budget </li></ul></ul>
  11. 11. Financial Responsibilities Tracking Expenditures… <ul><li>Committee Chair shall submit an expenditure report to the Finance Chair </li></ul><ul><ul><li>A proposed expenditure report prior to approval for the event and an actual expenditure, at the conclusion of the event </li></ul></ul><ul><li>Document each line item with associated cost </li></ul><ul><li>The treasurer should track all expenses in budget worksheets, to reflect revenue and disbursements </li></ul><ul><ul><li>For all executed activities </li></ul></ul>
  12. 12. Financial Responsibilities Reporting… <ul><li>Treasurer’s reports are not Finance Reports </li></ul><ul><li>Monthly Financial Reports (Finance Chair) </li></ul><ul><ul><li>Budget tracking and reporting </li></ul></ul><ul><ul><li>Not a record of each transaction </li></ul></ul><ul><li>Committees’ Activity Reports </li></ul><ul><ul><li>Periodic or on completion of activity </li></ul></ul><ul><ul><li>Sources and amounts of revenues and expenses </li></ul></ul><ul><li>Transactions recorded by category </li></ul><ul><li>Disclosure of Financial Statements </li></ul><ul><li>Audits </li></ul><ul><li>IRS Form 990 </li></ul><ul><ul><li>Submit annual financial reports on time </li></ul></ul><ul><ul><li>Penalties for not reporting include </li></ul></ul><ul><ul><ul><li>Suspension of Chapter </li></ul></ul></ul><ul><ul><ul><li>Revocation of Charter </li></ul></ul></ul><ul><ul><ul><li>Exclusion from IRS group exemption </li></ul></ul></ul>
  13. 13. Financial Responsibilities Treasurer’s Responsibilities… <ul><li>Custodian of Chapter Funds </li></ul><ul><li>Obtain a signature card </li></ul><ul><li>Collect Membership dues and forward dues along with the membership report to National Office </li></ul><ul><li>Maintain accurate financial records </li></ul><ul><li>File IRS Form 990 with National Organization by March 15 </li></ul><ul><li>Disburse funds and pay bills promptly as approved by the Executive Committee </li></ul><ul><li>Perform all duties as specified in the bylaws </li></ul><ul><li>Bonded or two signatures required </li></ul><ul><li>Serve as ex officio member of the Finance Committee </li></ul><ul><li>Work closely with Membership Chair to assure Chapter and National membership records are accurate </li></ul><ul><li>Expedite collection and remittance of membership dues </li></ul>
  14. 14. Financial Responsibilities Treasurer’s Responsibilities… <ul><li>Treasurer’s essential items: </li></ul><ul><ul><li>Ledger </li></ul></ul><ul><ul><li>Checkbook </li></ul></ul><ul><ul><li>Receipt book </li></ul></ul><ul><ul><li>File </li></ul></ul><ul><li>Records of all receipts should be accurate and up-to-date </li></ul><ul><li>Prepare an annual final report, consolidating by category all transactions during the fiscal year. </li></ul><ul><li>Checkbook should be balanced monthly Reconciliation recorded on bank statement </li></ul><ul><li>Prepare a treasurer’s report for the chapter/region meeting (monthly) </li></ul><ul><ul><li>Report the balance on hand (beginning and end of reporting period </li></ul></ul><ul><li>Deposit chapter/region funds </li></ul>
  15. 15. Financial Responsibilities Bank Reconciliation Steps… <ul><li>Bank Reconciliation steps: </li></ul><ul><ul><li>Verify all amounts on bank statement with amounts in checkbook. </li></ul></ul><ul><ul><li>Place the amount of bank balance in the appropriate space on the back of the bank statement. </li></ul></ul><ul><ul><li>Add any deposits not noted on the statement </li></ul></ul><ul><ul><li>Deduct all outstanding checks. </li></ul></ul><ul><li>Adjusted balance should agree with the checkbook balance. </li></ul>
  16. 16. Financial Responsibilities SUMMARY Budget Preparation Budget Justification Budget Execution Budget Reporting Fiscal Integrity Accountability Credibility
  17. 17. Financial Responsibilities

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