Best Practices in Money Management

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Best Practices in Money Management

• October 31, 2008

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Why set standards?

• To ensure that financial resources are
  appropriately managed and used (4-H, CEOS, Master
  Gardeners, etc)
• To maintain public confidence in Extensions
  programs
• To protect volunteers and employees
• To clarify and strengthen roles
• Risk management

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Topics of Discussion

• 4-H, CEOS and other affiliated groups information
• Fundraising/Gifts
• Responsibilities of County Extension Agent
• Responsibility of Extension employees
• Responsibilities of affiliated organizations
• Findings
• Budget building

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Affiliated Group Information

• 4-H is a federal income tax-exempt organization
  under section 501 (c)(3) of the IRS code
• CEOS is 501(c)(3)
• Master Gardeners we are currently clarifying
  their status
• Other groups operating and supporting WVU ES
  programs 501(c)(3) status will vary

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Affiliated Information - Taxes

• Federal income tax exempt number
• 4-H Federal tax exempt number is GEN 2704
• State sales tax exempt number
• State WVU state sales tax exempt number is
  55-6000842004 (4-H and CEOS)

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EIN Information

• Employer Identification Number (EIN)
• NOT the same as Federal income tax-exempt
• All WVU Extension affiliated organizations must
  have their own EIN for banking and tax purposes
• To get an EIN , file application Form SS-4 with
  the IRS
• Online at http//www.irs.gov
• Apply online or print out the application
• Fax/online/mail completed tax forms to the IRS
  office handling your areas Federal income tax
  returns
• No charge to apply

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Form 990 or 990 EZ or 990 N E-Postcard

• 990 or 990 EZ - annual IRS report required when
  gross receipts exceed 25,000 per fiscal year
• 990 N E-Postcard annual IRS report required
  when gross receipts are under 25,000 per fiscal
  year
• Gross receipts refers to all revenue generated in
  all accounts owned by your organization (EIN)
• Contact your local IRS Office for forms and any
  questions relating to Federal income tax matters
  or on the internet at
• http//www.irs.gov

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HELP on Taxes EIN

• For help on taxes, EIN, and 990s
• Sean Beatty 293-2401 x3358
• Bob Nickelson 293-2401 x3352
• Kelly Nix 293-2796 x3431
• Pat Gruber 293-2796 x3421

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Fundraising

• Supporters must be made aware of the intended use
  of fund-raising dollars
• Fundraising dollars must be used for the purpose
  given
• Affiliated organization is responsible for all
  financial obligations associated with a
  fund-raising project
• Funds cannot be used for unauthorized purposes
• Advantage to placing funds in WVU Foundation cash
  and/or endowed accounts

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Gifts

• Encourage the use of WVU Foundation for private
  grants, corporate gifts, and creating
  endowed/cash accounts
• One time private gifts larger than 5,000 must go
  though the WVU Foundation
• Gifts and donations must be used for the purpose
  given

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HELP on Fundraising/Gifts

• For help on fundraising and gifts
• Julie Cryser 293-5691 x3307
• Jessie Momen 293-2401 x3355
• Debbie McDonald 293-2694 x3446 (4-H)
• Bill Beckley 293-2694 x3438 (4-H)
• Pat Gruber 293-2796 x3421 (CEOS)
• Kelly Nix 293-2796 x3431 (CEOS)
• Jennifer Williams 293-6131 x4239 (ANR)

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Responsibilities of Extension Employees

• No Extension employee (WVU or Local) can serve as
  treasurer, financial officer, co-signer of
  accounts, make deposits, or expend private funds
  of any Extension organization
• Responsible for teaching Best Financial Practices
  to WVUES organizations and affiliates
• Responsible for ensuring that WVUES organizations
  and affiliated organizations financial resources
  are appropriately managed and used
• Report any fraudulent activity to WVU Extension
  Administration
• Promote compliance and provide fiscal management

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Responsibilities of Extension Employees

• Refrain from utilizing client group accounts as a
  depository for funds not related to that groups
  purpose or the organizations non-profit status
  can be revoked
• Advise organization to seek help from a
  professional tax advisor when their annual
  revenue exceeds 25,000 per fiscal year (IRS form
  990 or 990 EZ)
• Be very familiar with The CEOS Name and Emblem
  Guidelines for Authorized Use
• Be very familiar with Tax Exempt Status of CEOS
  Organizations Authorized to Use the CEOS Name and
  Emblem

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Responsibilities of County Extension Agent

• Secure by-laws, minutes and treasurers reports of
  all WVUES groups
• Review activities to ensure that the organization
  is meeting objectives
• Secure charter or MOU as appropriate
• Authorize use of CEOS name and emblem locally
• Keep records of all CEOS organizations authorized
  to use CEOS name and emblem

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By-Laws

• By-laws must define
• Membership
• Purpose (must match Extensions)
• Meetings
• Non-discrimination
• Dissolution
• Guidance and control

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HELP with by-laws

• For help with by-laws
• Roger Hanshaw 293-5691 x3306
• Debbie McDonald 293-2694 x3446 (4-H)
• Bill Beckley 293-2694 x3438 (4-H)
• Pat Gruber 293-2796 x3421 (CEOS)
• Kelly Nix 293-2796 x3431 (CEOS)
• Jennifer Williams 293-6131 x4239 (ANR)

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Responsibilities of County Extension Agent

• Work with Principal Investigators (PIs) as
  appropriate on grants
• Report local funding issues to PIs related to
  grants/programs
• Review Board and County Commission invoices
• Request reviews of local organization finances
  annually and report fraudulent or suspicious
  activity
• Teach and assist volunteers in the creation of
  annual and event budgets

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Responsibilities of County Extension Agent

• Monitor bank statements monthly
• Each account must have the affiliated groups
  name and sent to the County Extension Office
• Open the bank statement and review
• Photocopy
• Mail original statement to the treasurer
• File in the county office by affiliated
  organizations name
• A paperless system is not allowed

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HELP with Agent/Employee Roles Responsibilities

• For help with employee roles and responsibilities
• Dave Snively 293-2691 x3344
• Jessie Momen 293-2401 x3355
• Bob Nickelson 293-2401 x3352
• Sean Beatty 293-2401 x 3358

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Responsibilities of Affiliated Organizations

• Create/adopt an annual budget by vote of
  membership
• Members should make organizational decisions
• Secretaries should record financial decisions in
  the official meeting minutes
• Follow Roberts Rules of Order, Parliamentary
  Procedure
• Back-up computer files to avoid loss of data
• Use of Debit/Credit cards is strongly discouraged

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Responsibilities of Affiliated Organizations

• Have an annual, independent audit or review at
  the close of the fiscal year or when the
  treasurer changes. Reviewers must be independent
  and have recognized competencies to fulfill the
  responsibility
• Refrain from utilizing client group accounts as a
  depository for funds not related to that groups
  purpose
• Promote compliance and provide fiscal management

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Responsibilities of Affiliated Organizations

• Treasurers
• make timely deposits, expenditures, and reports
  consistent with organization decisions
• report monthly in writing to membership and the
  Extension Office.
• make detailed cash receipts and disbursement
  registers
• reconcile monthly bank statements (attach
  invoices/receipts to used check and appropriate
  bank statement)
• all accounts require two signatures, the
  treasurer and one other individual unrelated to
  the treasurer
• no one is to sign a blank check
• prepare 990 N, 990 or 990EZ

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HELP on Affiliated Organizations Roles
Responsibilities

• For help with affiliated organizations roles and
  responsibilities
• Dave Snively 293-5691 x3344
• Jessie Momen 293-2401 x3355
• Bob Nickelson 293-2401 x 3352
• Debbie McDonald 293-2694 x3446 (4-H)
• Bill Beckley 293-2694 x3438 (4-H)
• Pat Gruber 293-2796 x3421 (CEOS)
• Kelly Nix 293-2796 x3431 (CEOS)
• Jennifer Williams 293-6131 x4239 (ANR)
• Sean Beatty 293-2401 x3358

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What is a budget?

• A report of estimated expenditures and
  revenue/allocation
• A record to present for approval to a funding
  agency/center/unit
• An historical record of revenue/allocation and
  expenses for comparison to past years and to
  better plan for future years

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Why do we build a budget?

• To plan an event or program to create a financial
  contact
• To make recommendations on appropriate methods of
  processing payments and paying vendors within 30
  days
• Plan for possible outcomes
• Residual funds
• Shortfall
• To improve future budgets
• Avoids over/under charging participant fees
• Avoids hidden agendas
• To make your life easier

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Post event/year end

• Collect revenue
• Pay all invoices
• Compare estimates to actuals
• Revenue
• Expenses
• Determine balance forward or shortfall
• List areas for improvement for next years budget
  annual and event

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HELP on Budgets

• For help with budgets
• Jessie Momen 293-2401 x3355
• Bob Nickelson 293-2401 x3352
• Sean Beatty 293-2401 x3358

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County Review Findings

• Poorly managed books
• No documentation or back-up
• No audits or reviews
• Non sufficient funds
• Signed blank checks
• No approved annual or event budgets
• Poor cash handling
• Checks written to cash

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County Review Findings

• Only 1 signature on a check
• For line is left blank on a check
• No treasurers reports
• No budgets
• Minutes do not match expenditures
• Sams Club (fees, no controls)
• Money misappropriated

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County Review Findings

• Accepting dollars from unaffiliated groups or
  events
• Paying late fees and/or bad check fees
• Debit Cards
• Extension employees on a checking account or with
  a credit card

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HELP on County Review Findings

• For help with review findings
• Sean Beatty 293-2401 x3358
• Jessie Momen 293-2401 x3355
• Bob Nickelson 293-2401 x 3352

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Where do we go from here?

• Assign a financial trustee from WVUES to each
  affiliated organizations bank account
• Training and development - County tool kit web
  version

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Educational Opportunities

• WVUES groups
• Civic groups
• Livestock associations
• Fair boards
• Chambers of Commerce
• Camp boards
• Economic development boards

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Questions

• Sean Beatty 293-2401 x3358
• Sean.beatty_at_mail.wvu.edu
• Dave Snively 293-5691 x3344
• David.Snively_at_mail.wvu.edu
• Jessie Momen 293-2401 x3355
• jlmomen_at_mail.wvu.edu
• Bob Nickelson 293-2401 x3352
• rsnickelson_at_mail.wvu.edu
• Toll free
• 1-800-670-4838

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Questions

• Debbie McDonald - 4-H 293-2694 x3446
• Debbie.McDonald_at_mail.wvu.edu
• Pat Gruber Families and Health 293-2796 x3421
• prgruber_at_mail.wvu.edu
• Steve Bonanno CEWD 293-6967 x3343
• scbonanno_at_mail.wvu.edu
• Jennifer Williams ANR 293-6131 x4239
• JOWilliams_at_mail.wvu.edu