Best Practices in Money Management 1 February 2014

2 Why set standards? To ensure that financial resources are appropriately managed and used (4-H, CEOS, Master Gardeners, etc) To maintain public confidence in Extension’s programs To protect volunteers and employees To clarify and strengthen roles Risk management

3 Topics of Discussion WVU Extension Service group information Fundraising/Gifts Responsibilities of County Extension Agent Responsibility of Extension employees Responsibilities of affiliated organizations Findings Budget building

4 Tax exemption is gained from parent organization West Virginia University. 4-H is a State Tax-exempt organization CEOS is State Tax-exempt Master Gardeners is State Tax-exempt Affiliated Group Information

5 Federal income tax exempt number –4-H Federal tax exempt number is GEN 2704(Expired 5/16/2011) State sales tax exempt number –State – WVU state sales tax exempt number is (4-H, Mater Gardeners and CEOS) Affiliated Information - Taxes

6 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 –Apply online or print out the application –Fax/online/mail completed tax forms to the IRS office handling your area’s Federal income tax returns –No charge to apply EIN Information

7 Form 990 or 990 EZ or 990 N E-Postcard 990 or 990 EZ - annual IRS report required when gross receipts exceed $50,000 per fiscal year 990 N E-Postcard – annual IRS report required when gross receipts are under $50,000 per fiscal year –Gross receipts refers to all revenue generated in all accounts owned by your organization (EIN) within in a given year. –Contact your local IRS Office for forms and any questions relating to Federal income tax matters or on the internet at:

8 HELP on Taxes & EIN For help on taxes, EIN, and 990’s –Sean Beatty –Bob Nickelson

9 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.

10 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

11 HELP on Fundraising/Gifts For help on fundraising and gifts Brent Clark Andrew Barnes Debbie McDonald Alicia Cassels Cindy Fitch Pat Gruber Jennifer Williams

12 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

13 Responsibilities of Extension Employees Refrain from utilizing client group accounts as a depository for funds not related to that group’s 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 $50,000 per fiscal year (IRS form 990 or 990 EZ) Be very familiar with The 4-H, MasterGardeners and CEOS Name and Emblem Guidelines for Authorized Use Be very familiar with Tax Exempt Status of WVUES Organizations Authorized to Use the 4-H Name and Emblem

14 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 WVUES Division name and emblem locally Keep records of all WVUES organizations authorized to use their name and emblem

15 By-Laws By-laws must define: –Membership –Purpose (must match Extension’s) –Meetings –Non-discrimination –Dissolution –Guidance and control

16 HELP with by-laws For help with by-laws –Debbie McDonald (4-H) –Cindy Fitch (CEOS) –Mirjana Bulatovic-Danilovich (ANR)

17 Responsibilities of County Extension Agent Work with Principal Investigators (PI’s) as appropriate on grants Report local funding issues to PI’s 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

18 Responsibilities of County Extension Agent Monitor bank statements monthly: –Each bank account must have the affiliated group’s address as the County Extension office. Open the bank statement and review Photocopy Mail original statement to the treasurer File in the county office by affiliated organization’s name A paperless system is not allowed

19 HELP with Agent/Employee Roles & Responsibilities For help with employee roles and responsibilities –Bob Nickelson –Sean Beatty

20 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 Robert’s Rules of Order, Parliamentary Procedure Back-up computer files to avoid loss of data Use of Debit/Credit cards is not permitted

21 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 group’s purpose Promote compliance and provide fiscal management

22 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

23 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

24 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

25 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 year’s budget – annual and event

26 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

27 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 Sam’s Club (fees, no controls) Money misappropriated

28 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