Mechanics of Running a Section: Leadership and Finances

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Mechanics of Running a Section Leadership and
Finances

• Mary Lassiter Snitch
• AIAA Vice PresidentElect, Member Services

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Agenda

• Section Leadership
• Establishing a Council
• Regional Assistance
• Section Finances
• Establishing an Annual Budget
• AIAA Money Categories
• AIAA Self-Governance
• Impact of Sarbanes-Oxley on AIAA
• Responsibilities for Section Leaders

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Establishing a Council

• Priority 1 for Section Chair -- establish a
  strong and active Council
• Number of officers depends on the Section Bylaws
  and size of Section
• At a minimum, the Council has
• Chairperson
• Vice-Chairperson
• Secretary
• Treasurer
• Develop a succession plan for each of these
  positions
• Rotate people through different positions,
  culminating with the Chair

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Responsibilities of the Chairperson

• Motivate your Section officers
• Establish goals for the year
• Oversee the activities of the Section
• Identify future leaders
• Seek corporate management support
• Hold regularly scheduled meetings with your
  officers
• Help organize the Section
• Monitor the progress of the Section, keep it on
  course and within the bounds of its budget
• Document your success by preparing the Section
  Annual Report at the end of your year

Check out the Officer Manual online for more info
about roles and responsibilities of Section
Leaders
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Responsibilities of Leaders

• Vice-Chairperson
• Fills in for Chairperson when needed
• Automatically succeeds Chair in some Sections
• Sometimes doubles as Program Chairperson
• Secretary
• Prepares agendas and takes minutes for Section
  Council meetings
• Distributes meeting notices
• Keeps the permanent Section records (Bylaws)

Check out the Officer Manual online for more info
about roles and responsibilities of Section
Leaders
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Responsibilities of Leaders

• Treasurer
• Helps to prepare the budget
• Monitors budget performance
• Maintains the financial records of the Section
• Helps to prepare the end-of-year audit
• Insures that Section Officers and Council
  properly authorize all expenditures
• Files any tax return and information filings

More information about Finances in later slides
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Establishing a Council

• Beyond the Council Executives
• Regional Advisory Committee Representative
• Programs Officer
• Career Enhancement Officer
• Education Officer
• Honors and Awards Officer
• Membership Officer
• Communication Officer (Webmaster, Newsletter
  Editor)
• Pre-College Outreach Officer
• Public Policy Officer
• Young Professional Officer

Check out the Officer Manual online for more info
about each of these positions
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Regional Leadership Assistance

• Regional Activities Committee
• Chaired by Regional Director
• Meetings held regularly via telecon or
  face-to-face meeting
• Exchange news about Institute and Sections
• Each Section should have a representative!
• Attendance and Active Participation is Critical
• Regional Directors
• Each Section Officer position has a counterpart
  Regional Deputy Director
• Encourage each officer to communicate regularly
  with the appropriate Regional Deputy Director

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Financial Responsibilities

• Submit Annual budget and audit
• Provide copies to Regional Director DD Finance
• Account for all Section Income and Expenses
• Due June 30 of each year
• Required to obtain Category I money for Section
• Maintain oversight over Section finances
• Checking and Savings accounts should have
  multiple signatories (Chair and Treasurer)
• Ensure that expenses are reasonable and for the
  benefit of AIAA Section and Members
• Follow the RSAC financial guidelines (Review the
  Officer Manual, Section 4.4.4)
• AIAA is a non-profit organization

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Establishing an Annual Budget

• Review previous years budgets
• Meet with the various officers to obtain expense
  estimates for the new budget
• Account for all expected income expenses
• Budget for corporate contributions
• Dont forget special expenses
• Awards, plaques, and certificates
• Speaker gifts
• Membership dues in local technical societies.
• Student support supporting Regional Student
  Conferences, Student Branch activities, awards to
  students, etc.

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Section Meeting Expenses

• Structure meetings to pay for themselves
• Establish different rates for members,
  non-members (25-40 difference recommended)
• Negotiate with restaurants, meeting places for
  reasonable costs
• Sections do not pay speakers travel or honoraria
  expenses
• Use the Distinguished Lecturer Program!
• Maintain a clear "paper trail"
• Keep supporting info for all financial
  transactions
• Examples include invoices, receipts, deposit and
  withdrawal slips, canceled checks

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Last Years A/B Report
1. Copy the budgeted income and expenses to this
years report
This Years A/B Report
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Last Years A/B Report
This block is the actual cash you had on hand at
the beginning of this year, and is the same as
the cash you had on hand at the end of last year.
This Years A/B Report
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Last Years A/B Report
This Years A/B Report
Just copy the entries from the plan you made at
the beginning of this year, including how much
cash you estimated that would be in the bank at
the end of the year. The circled values should
be equal.
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Last Years A/B Report
2a Record actual income and expenses
These entries should all be ledger entries from
your Sections books.
This Years A/B Report
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Last Years A/B Report
2a Record actual income and expenses
Since the end of last year is the same as the
beginning of this year, the entries indicated are
identical.
This Years A/B Report
2b Enter bank balances from date of report. The
circled values should be equal.
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Last Years A/B Report
Your planned income and expenses are all
estimates, and up to your council to determine.
Some councils plan to spend only what they bring
in, resulting in no change in the bank balance
from today.
This Years A/B Report
3. Estimate planned income, expenses, and
resulting end-of-year bank balance. The circled
values should be equal.
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Last Years A/B Report
1. Copy the budgeted income and expenses to this
years report
2a Record actual income and expenses
This Years A/B Report
2b Enter bank balances from date of report.
3. Estimate planned income, expenses, and
resulting end-of-year bank balance
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AIAA Money Categories

• Five Categories of Money
• Category I - Section rebate allocations
• Category II - Section Awards
• Category III - Regional Director funds
• Category IV - Vice President Member Services
  funds
• Category V - Start-up money for prospective
  Sections
• Category I Rebates are distributed in October,
  upon review and approval of the Annual Report and
  Audit and Budget by your Regional Director

Cat II Money 500 First Place 200 Second
Place 100 Third Place
Cat I Money 7.50 per member 2.50 per NEA
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Category III Money Use it!

• Each Regional Director has Cat III money
• Amount depends on membership size of Region
• How to get Cat III money
• Section Chair can request money using Cat III
  Rebate Form in the Officer Manual
• Submit to Regional Director for consideration
• RAC votes to approve request
• All funds are use or lose at end of fiscal year
  (30 September)

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Category III Money Use it!

• Cat III money generally approved for
• One-time expense for a new program/initiative
• An improvement or enhancement to an existing
  program
• Anything that supports/promotes
• Student-section interaction
• Student-industry interaction
• Aviation/aerospace in general
• Membership growth and retention
• New chapters and/or new student branches
• Requests are generally turned down if
• It seems to be an item that violates the
  guidelines for Section rebates, such as
  honorarium for a speaker
• It is something that can be interpreted as a
  regular yearly Section activity

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Sarbanes-Oxley

• What is Sarbanes-Oxley?
• The Sarbanes-Oxley Act of 2002 (Pub. L. No.
  107-204, 116 Stat. 745, also known as the Public
  Company Accounting Reform and Investor Protection
  Act of 2002 is a law passed in response to a
  number of major corporate scandals resulting in a
  decline of public trust in corporate accounting
  practices
• Supporters of these reforms believe the
  legislation was necessary and useful while
  critics believe it does more economic damage than
  it prevents.
• The most important part of the Act establishes a
  new quasi-public agency, the Public Company
  Accounting Oversight Board,, which is charged
  with overseeing, regulating, inspecting, and
  disciplining accounting firms in their roles as
  auditors of public companies.

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AIAA Self-Governance Initiative

• Sarbane-Oxley Act defines corporate governance
  for publicly traded companies
• What are the rules for non-profit?
• California passed law applying Sarbane-Oxley to
  non-profit organizations
• Other states and federal laws expected to follow
  in time
• AIAA has established a policy for self-governance
• (Explanation)

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Impact of Sarbanes-Oxley on AIAA

• Focus areas for AIAA Governance Initiative
• Independent Audit
• Conflict of Interest
• Code of Conduct / Ethics
• Whistle Blower
• AIAA Governance Charter
• Board of Directors has ultimate responsibility
• Education training provided for staff
  volunteers

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Responsibilities for Section Leaders

• Independent Audit Requirements
• Section finances must be audited
• Annual Budget and Audit form must be completed
  and appropriately signed
• Regional Director and DD Finance shall review
• Whistle Blower Policy for Members
• Responsibility of a member having knowledge of a
  suspected violation of law or of AIAA policy, or
  of unauthorized or inappropriate conduct, to
  report such activity confidentially to
• Committee chair
• Member of the Board of Directors
• AIAA Policy Ombudsman
• AIAA expressly prohibits any form of retaliation,
  against members who raise suspected violations of
  law

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Responsibilities for Section Leaders

• Conflict of Interest
• The potential for a conflict of interest exists
  whenever a person owes a loyalty to multiple
  interests or organizations
• A conflict of interest occurs only when loyalty
  to one interest would impel a course of action
  different from that impelled by another interest
• Responsibilities of Volunteers
• If a volunteer is in a position of conflict of
  interest, they should disqualify themselves and
  refrain from participating in the deliberations
  and decision-making
• If a volunteer is in a position that APPEARS like
  conflict of interest, they should take action as
  defined in the Policy
• Review the Policy for more discussion

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Leadership and Finances Summary

• Establish an active Council
• Review the Online Officer Manual for guidance
• Establish an Annual Budget
• Apply for Cat III money for new initiatives
• Submit Annual Audit to receive Cat I money
• Understand the AIAA self-governance policies
• Avoid potential conflicts of interest
• Follow the audit process for Section finances
• Honor the Whistle Blower Policy
• Report Code of Ethics violations

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