LTC Financial Operations

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(No Transcript)
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Finance Technical Division and
Institutes Roy Hogan rehogan_at_sandia.gov Elio
Manes ManesE_at_asme.org
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Why talk about finances?

• Money lets us do good things!
• A financially sound organization benefits
  everyone!
• Stewards of your Divisions resources
• Responsibility accountability

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Objectives of Division/Institute Finance Session

• Overview of ASME Finances
• The Big Picture of ASME
• The ASME budgeting process
• How your Unit fits in
• Guidance for Unit Leaders
• Your financial responsibilities
• Your financial resources

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The Big Picture of ASME Finances

• Our focus
• Putting our money to work to accomplish our
  Mission and Vision
• Our opportunity
• Wisely use our Division/Institutes money to
  serve our members and the Society as a whole

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ASME is a Not-for-Profit under IRS 501-(c)(3)
Regulations

• Exempt from payment of federal income and sales
  taxes (in certain States)
• Operated exclusively for purposes of
  scientific, public safety, .
• Dictates mandatory operational, accounting, and
  reporting responsibilities and limitations which
  are applicable to all of us

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Overview of ASME Finances

• ASME operates on a 3-year budget cycle
• Driven by 3-year publication sales of the ASME
  Boiler Code
• Budget is balanced over a 3-year period
• ASME Fiscal Year ? July 1 to June 30
• Nominal annual operating budget is 80M

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Revenue and Expenses(2010 Actuals)
Centers
Strategic
Institutes
Events Management
Knowledge Community
Standards Certifications
Marketing Membership
Publications
HQ Services
Revenues (86.2 M)
Expenses (84.6M)
8/53
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Financial Governance

• Board of Governors (BOG)
• sets policies, strategic direction, and
  priorities
• Committee on Finance Investment (COFI)
• reports to the Board of Governors
• responsible for maintaining Societys financial
  policies
• leads our financial operations and approves an
  annual operating budget
• produces our Annual Report
• Knowledge and Community (KC) Financial
  Operations Operating Board
• prepares and monitors budget for the KC Sector

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ASME Annual Report

• IRS requires ASME to produce an Annual Report
• 501-(c)(3) not for profit
• Publication 557
• http//www.irs.gov/
• Link to Annual Report
• http//files.asme.org/asmeorg/About/26305.pdf

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ASME Policies Finance Related

• http//www.asme.org/Governance/Society_Policies.cf
  m
• All the way from P-1.1 to P-17.1

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Society Budget Includes Funds for Operating the
Institutes

• Sector organization and operating units
• Knowledge Community (KC)
• Institutes
• Standards Certification
• Centers
• Strategic Management
• Publishing Services
• Corporate Support

• Three Institutes
• International Gas Turbine Institute (IGTI)
• International Petroleum Technology Institute
  (IPTI)
• Nanotechnology Institute

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Society Budget Includes Funds for KC Volunteer
and Staff Support

• Sector organization and operating units
• Knowledge Community (KC)
• Institutes
• Standards Certifications
• Centers
• Strategic Management
• Publishing Services
• Corporate Support

• Five Vice-Presidencies
• Technical Communities
• Global Communities
• Programs and Activities
• Affinity Communities
• Financial Operations

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Financial Operations Board Develops a KC Budget

• Operation of KC Sector
• KC Board, plus Technical, Global, Affinity, and
  Programs Activities Boards and programs
• Volunteer/staff travel and expenses
• Audio/Visual, meals, telecons, etc.
• Division custodial fund activities do NOT roll up
  into the Society general fund budgeting process

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Majority of KC Budget Supports Governance and
Operations
FY11 Volunteer Travel Meals FY11 Volunteer Travel Meals FY11 Volunteer Travel Meals
  Travel Meals
KC ADMIN 161240 11952
ENERGY GROUP 1248 312
PRESSURE TECHNOLOGY GROUP 1248 225
ENVIRONMENT TRANSP GROUP 1248 225
BASIC ENGINEERING GROUP 1248 450
SYSTEMS DESIGN GROUP 1248 450
ENGINEERING TECH MGT GROUP 1248 450
MANUFACTURING GROUP 1248 312
DISTRICT OPS (includes district budgets) 112060 18713
STUDENT SECTION OPS 154960 2923
TOTAL TRAVEL 436996 36012
KC Admin includes the KC Operating Board,
Technical Communities, Global Communities,
Affinity Communities, Programs Activities, and
Financial Operations Board
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KC Budget Feeds into the Overall Society Budget

• KC Financial Operations Board integrates
  requests from the five vice-presidencies (TC, GC,
  AC, PA, FO) in the January/February timeframe
• Budget requests prioritized by Strategic
  Management Committee (SMC) COFI
• Final budget approved by the BOG at the Annual
  Meeting (June)

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Division Leaders Responsibilities

• Division/Institute Income Expenses
• Conferences, Exhibits, and Events
• Custodial and Operating Accounts
• Annual Budgets and Reporting
• Resources for Division/Institute Leaders
• Understand and follow Society Policies
• http//www.asme.org/Governance/Society_Policies.cf
  m

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Volunteer Leaders Represent ASME and our
Membership

• Its important to remember that our actions will
  reflect on the reputation of the Society.
• Act with integrity and honesty
• Practice financial stewardship and accountability
• Understand and follow ASME policies
• Avoid real or perceived inappropriate, unethical,
  conflicts-of-interest. behavior and activities
• Public respect and trust of ASME has been earned
  over many years but it can be easily destroyed!

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Income and Expenses

• Income (Sources of Funds)
• Where do Technical Divisions or Institutes get
  their operating funds?
• Expenses (Uses for Funds)
• How do Technical Divisions or Institutes use
  their money?

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Divisions and Institutes Earn Income Through
Programs

• Surplus and/or share from Conferences,
  expositions, short courses, publications, etc.
  (Pursuant to Policy P-12.1)
• Journal Revenue Sharing
• Voluntary member dues contributions
• Share of Continuing Education Institute (CEI)
  programs sponsored/facilitated by a Division
• Solicitation of Funds from Non-ASME Sources such
  as corporate sponsorships (Pursuant to Policy
  P-2.7)

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Division Institute Expenses

• Conferences, short courses, etc
• Recognition, honors and awards
• Speaker programs
• Scholarship programs
• Student activities, competitions, etc.
• Newsletters and other communications
• Volunteer travel and support
• ASME staff support

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When are Expenses Covered?

• ASME units may pay expenses when
• There are sufficient funds in the budget and
  custodial account to cover the expenses
• The expenses have been authorized, are within
  policy, and are supported with receipts
• The expenses are incurred for the benefit of ASME
• Expenses are allowed under current ASME Policy
• The expenses are consistent with ASMEs
  501-(c)(3) tax status
• Its your responsibility to know the Society
  Policies
• http//www.asme.org/Governance/Society_Policies.cf
  m

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Volunteer Travel Expenses

• Travel expense support for officers and members
  to participate in ASME programs (reimbursable
  pursuant to Policies P-4.5 and P-4.6)
• Travel must coincide with activity and be
  reasonable
• Custodial funds MAY NOT be used to cover
  differences in actual expenses and
  policy-reimbursable expenses
• Members may incur out-of-pocket costs that the
  Division cannot reimburse!

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Considerations for Covering Expenses for Invited
Speakers

• Reimbursement of travel expenses
• Reimbursement limited to acceptable expenses
• May cover all travel costs
• Honorariums
• May be awarded in lieu of covering expenses
• Must be reported as income to recipient
• Both require a written speaker agreement
  stipulating terms of engagement

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Recent Changes in Society Policies and Processes
Impact YOU

• Financial Accounting and Information Reporting
  (FAIR)
• Society Policy 12.1
• http//www.asme.org/Governance/Society_Policies.cf
  m
• Some new requirements are driven by IRS
• These apply to all conferences and events
  organized by the Divisions and Institutes

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Requirements for Conferences and Expositions
Depend on Finances

• ASME Financial responsibility drives requirements
  
• Sponsorship Total financial responsibility
• Co-sponsorship Joint financial responsibility
• Participation No financial responsibility
• Conferences expositions may
• be managed by ASME HQ, ASME units, or non-ASME
  organizations
• have total, shared, or no ASME financial
  responsibility
• All events require a CA-1 Approval Form

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Collaborations Require Additional Planning and
Agreements

• Co-sponsored events
• require a written agreement of the duties,
  responsibilities, and disposition of surpluses
  and losses
• Participation events
• require a written agreement of the duties,
  responsibilities, and stating no ASME financial
  obligations
• Prevents misunderstandings and conflicts

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Planning and conducting an ASME Conference or
Event

• ASME sponsored and co-sponsored events
• Require a business plan and budget
• Require approval of Conference Planning Committee
  
• Must be budgeted to be self supporting with 15
  surplus
• Must include Staff support (FAIR Accounting)
• May include a surcharge to produce operating
  funds
• All income is to be deposited into Custodial
  Accounts
• Must provide a final report to CPC
• May require post-event auditing

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Your Conference or Event May be Audited (Policy
12.1)

• Required
• When ASME has greater than a 50 financial
  responsibility and where actual or budgeted
  income or expense is 500,000 or more
• Performed by a professional independent auditor
• jointly identified by Event Chair and ASME
  Assistant Treasurer
• ASME Assistant Treasurer has final responsibility
  for the selection
• Cost incorporated into Event budget (estimated
  10K)
• Random
• When the actual or budgeted income or expense is
  less than 500,000
• Selected by the ASME Assistant Treasurer
• Cost paid by ASME

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Additional Considerations for Conferences and
Events

• All expositions
• Shall be conducted in a manner consistent with
  ASMEs Policy 12.1 and 501-(c)(3) tax status
• All contracts
• MUST be signed by the Executive Director or the
  Assistant Treasurer
• All income
• MUST be deposited in the Divisions or
  Institutes Custodial Fund

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Higher-Dollar Activities Require Additional
Approvals

• When any Division or Institute activity involves
  total annual expenditures of 100,000 or more
  (Policy P-2.1)
• An itemized budget MUST be prepared and submitted
  to the Committee on Finance and Investment for
  review and recommendation to Board of Governors
• MUST be approved by the Board of Governors for
  execution in the subsequent year

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International Events Require Additional Attention
to Finances

• North America
• Europe
• Developing Nations
• ASME has consultants available
• Work closely with ASME Staff
• Ken Hunt and Mike Weis

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Custodial and Operating Funds

• ASME has established policies that facilitate the
  efficient and timely financial operation of
  Divisions and Institutes
• Custodial and Operating accounts are
  available to Divisions and Institutes
• The ASME Assistant Treasurer creates monthly
  Custodial Fund financial reports that are
  available to Division/Institute Chairs and
  Treasurers on the ASME website

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Establishing Division/Institute Custodial or
Operating Funds

• To establish a new Custodial or Operating Fund, a
  Division or Institute (Policy P-2.1)
• MUST show that they have a need to make direct
  expenditures
• MUST have an approved budget
• MUST obtain the approval of the Technical
  Communities Operating Board, and of the Committee
  on Finance and Investment (COFI)

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Description of Operating Funds

• Operating Funds
• Money (usually for small, frequent expenses) kept
  separately in banks or other recognized financial
  institutions
• MUST have receipts available for audits
• MUST be reported annually to the Committee on
  Finance and Investments (COFI)
• Names and addresses of the financial institutions
  
• Names of those authorized to make withdrawals
• MUST adhere to all ASME Policies and necessary
  requirements for IRS 501-(c)(3)

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Annual Planning and Reporting

• Divisions should prepare an operating budget
• Divisions are required to prepare and submit an
  Annual Report and Plan to their respective
  Technical Group Operating Board
• Annual Report and Plan
• summarizes your Divisions activities
• presents goal plans for the upcoming year
• Important communication with your leadership!

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Using Your Custodial Fund

• All monies received by a Division or Institute
  are to be deposited into the Custodial Fund
• Payments from a Custodial Fund
• Payments are made from the Custodial Fund on the
  written request of two members of the Society
  authorized by the Executive Committee of the
  Division or Institute (usually the Treasurer and
  Chair)
• Verbal authorizations for payment may be given to
  staff by two authorized members for expenditures
  up to 2000, provided that copies of the approved
  invoices are sent to the authorizing members for
  their records

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Description of Custodial Funds

• Custodial Funds
• Money generated by an ASME activity
• Maintained in the ASME General Fund by the ASME
  Societys Treasurer
• Invested as part of the General Fund
• Investment gains and income (or losses) allocated
  to the Division or Institutes Custodial Fund

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Custodial Fund Reports

• Custodial Fund financial reports are available to
  Chairs and Treasurers
• View your Divisions custodial fund report at
  http//my.asme.org/financials/GLReports.cfm
• Check it often! It is your responsibility to be
  certain that your units accounts are accurate!
• Promptly report suspected errors to your assigned
  Division staff manager or support staff who will
  look into the problem

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Once you receive access to the custodial fund you
can go to the financial reports website and sign
in.
Please use the email address on your ASME record
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Enter your personal password that you created for
the ASME members-only site. Your password is
not your membership number or an ASME generated
number.
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Initial Page of the Financial Tool

1. Select the account you want to view
2. Click on Generate Report

Note You will only see your accounts
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Overview of Revenue and Expenses
Blue entries are hot and will take you to a
more detailed description of the item
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Hot Entries lead to the Details
Multiple pages
Multiple tabs for different entries
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Details Transaction Page Can be Printed,
Exported, or Saved

• From the Detailed Transaction Page you can
• Print your report
• Export your financial statement into other file
  formats (excel, word, adobe)
• Save your document

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Additional Financial Help

• For questions related to financial specifics
  please contact your ASME Staff Manager
• For any additional questions about the financial
  tool or your access
• please contact Deidra Hackley (
  hackleyd_at_asme.org )
• or send your message through the Volunteer
  E-Request Tool (VERT) at http//vorequest.asme.org

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ASME Financial Resources

• Earnings (or losses) from Division or Institute
  Custodial Funds
• Mingled with ASME General fund
• Society resources for innovative initiatives
• ASME Development Fund (Policy P-2.5)
• ASME Foundation Grants (Policy P-2.11)
• ASME Sustaining and Breakthrough Innovation Fund

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Additional Resources for Financial Questions and
Assistance

• Your Vice-President for Financial Operations
• Karen Ohland ohlandk_at_asme.org
• TCOB Resources
• Conference Planning Committee
• Committee on Finance and Administration
• Committee on Division Operations and Training
• Your Technical Group Operating Board
• Volunteer Orientation Leadership Training
  (VOLT)
• ASME website for forms, best practices, etc
• http//committees.asme.org/KC/CPC/Forms_Templates
  .cfm

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Summary

• Protect 501-(c)(3) status
• Understand and follow ASME policies
• Prepare an annual operating budget
• Follow Policy 12.1 for events
• Prepare Division Annual Report and Plan
• Keep records of what you spend and receive
• Monitor Custodial Fund using web tool often
• Promptly report errors in your account
• Operate with integrity, fairness, and honesty

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Contact Information

• Roy Hogan rehogan_at_sandia.gov
• Elio Manes ManesE_at_asme.org
• This presentation will be posted on the 2011 LTC
  Web Site
• http//www.asmeconferences.org/ltc11/presentations
  .cfm

Finance - Division and Institute
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• Any Questions or Comments?
• Please provide your comments and
• feedback on the Session Survey Form
• THANK YOU!

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Division/Institute Finances Exercise

• In this exercise, you will be reviewing your
  Division Financial report and preparing an annual
  operating plan
• What are the major expenses and revenues?
• What major activities are planned?
• What do you consider a strength or even a best
  practice?
• What are areas of improvement?
• Discuss these and select one highlight and one
  action planned based on what you have learned.
• Each division should select a spokesperson