 Federal laws changed. All tax exempt organizations were required to begin filing annual IRS tax forms in 2007  4-H National HQ decided to cease providing group exemption for clubs and affiliates (councils) in July 2010  Increased need for financial transparency and accountability for all Extension funds

 Provide financial accountability and transparency  Be minimally disruptive, yet provide accountability  Establish a tax exempt basis for UK CES  Provide options rather than dictate actions

 Financial Accountability  Budget Transparency  Group Oversight  Adherence to UK money handling and financial procedures  Electronic Recordkeeping with the goal of standardizing categories to facilitate aggregation of records

 Governmental Exemption  County Extension is tax exempt because Extension Districts are considered a governmental subdivision of the Commonwealth (KRS )  501(c)3 status  Needed to accept certain grants or to conduct numerous gaming or raffle fund raisers (see KY regulations on Gaming)

 Option A: Governmental, multi-checkbook  Groups keep checkbooks  Option B: Governmental, single checkbook per program council  Option C: Governmental, District Board holds the checkbook  Option D: Seek 501(c)3 Status

County 4-H councils and 4-H entities:  will maintain control/have autonomy over own funds and own bank account  May use own EIN on bank account.  County 4-H Council will have general oversight of all 4-H entities in county.  Appropriate agent will be responsible for adherence to procedures

 All 4-H funds in the county will be handled centrally by the County 4-H Council.  Separate sub-accounts will be established in a Quicken, Quickbooks or similar electronic bookkeeping system for each entity’s funds.  Appropriate agent will be responsible for adherence to procedures.

 County 4-H Council funds will be handled centrally by the County Extension District Board.  Separate sub-account will be established for County 4-H Council in a Quicken, Quickbooks or similar electronic bookkeeping system.  The appropriate agent will be responsible for adherence to procedures.

 Apply for own 501(c)3 exempt status  Needs Memorandum of Understanding between the Director of the Cooperative Extension Service and each 501(c)3 entity which will accomplish:  Financial Accountability to District Board  Programmatic Accountability to County 4-H Council and County Extension Council

 If 501(c)3 status is needed for grants, KY 4-H Foundation is willing to handle funds to meet requirements of being a 501(c)3 entity.  Subject to Service Fee (currently 5%)  Multi-county/District entities have 2 choices:  Link to the KY 4-H Foundation OR  Link to a county 4-H program for government exemption and follow their guidelines

4-H entities:  Will no longer submit a 990-N, 990-EZ or 990.  Will be tax exempt as a “government” org.  May work with KY 4-H Foundation if 501(c)(3) status is needed for grants.

 4-H entity will complete application process to become 501(c)(3).  4-H entity will file the appropriate form of 990 annually to IRS.  Entity will be tax exempt as a 501(c)(3) org.

 By March 15, EACH 4-H club/council or entity handling funds must decide the option chosen. (Option A, B, C, or D)  Agent will report the choice of each group to the State 4-H Office via a Google document.  State will send information to 4-H National Headquarters.  4-H National HQ will send info to IRS.