1. Chapter Financial Management Michael Kerns Past President – National Capital Chapter Bruce Sufranski ASSE Director of Finance/Controller October 5, 2012

2.  Treasurer Roles  Chapter Leadership  Financial Manager  Treasurer Responsibilities  Strategic Planning  Financial Management – Focus of today’s session Financial Management: Agenda

3.  Executive Committee  Leadership Role: “Beyond Bean Counting”  Participate in all chapter business decisions  Focus on Membership Value / Experience  To maintain chapter’s financial well being, must be an active participant on Executive Committee Treasurer’s Roles: Chapter Leadership

4.  Strategic Planning – long term view  Set Chapter Direction and Priorities  Assess Financial Impact of Business Decisions  Are we providing best value for our Members  Do revenues exceed expenses  Special project initiatives  How to pay for it  Plan for the Long-Term  Develop healthy and sustainable Chapter  Financial health is key component Treasurer’s Roles: Chapter Leadership

5.  Financial Management: Responsibilities  “Counting the Beans”  Safeguard chapter assets  Financial Control: annual chapter budget  Financial Reporting: monthly/ quarterly/ annually  Financial Compliance: IRS tax filings / other requirements Treasurer’s Roles: Financial Manager

6.  Use Sound Accounting Practices to Record Transactions  GAAP requires “accrual accounting” (probably need to be an accountant)  Most chapters use “cash basis” accounting (like keeping your check book)  Cash comes in = revenue  Cash goes out = expense  Keys: Consistency/ Accuracy/ Transparency Financial Management – General Concepts

7.  Obtain financial records/ tax returns from predecessor  History provides important starting point  Financial Audit  Prepare Monthly Financial Reports  Require Executive Committee Participation  Review financial reports  Review bank statements Financial Management – General Concepts

8.  Safeguard Chapter Assets  Guard against loss, theft, fraud, etc.  Chapter Annual Budgeting  Short-term view (next 12 Months)  Monthly/ Quarterly/ Annual Reporting  How is Chapter doing?  Reports to Chapter Executive Committee  Reports to HQ  IRS Tax Filings  Stay in compliance Financial Management: Responsibilities

9. Safeguarding Chapter Assets  What are your Chapter’s Assets  Savings/checking account  Investment account (if any)  Fixed assets (if any)  How do you safeguard assets?  Proper procedures for handling cash receipts  Proper procedures for handling cash disbursements  Two Signatures required on checks  Monthly financial reports  Executive Committee review of financial reports and bank statements (Guest Access)

10. Financial Control: Budgeting  Budgeting is key step in financial control  Forces critical evaluation of where resources are going  Establishes guidelines for expenditures  Requires discipline  Budgeting leads to review of activities  Value added vs non-value added

11. Budgets: An Example 11

12.  Processes all receipts and disbursements of funds.  Transfers funds into authorized accounts as needed.  Receives and reconciles bank statements monthly.  Processes requests for reimbursement of chapter business expenses.  Reviews invoices for payment.  With the President and approved by the Executive Committee, prepares the annual budget.  Prepares all financial reports monthly / compares actual to budget  Prepares/files annual tax returns Treasurer Responsibilities

13.  Processes cash disbursements: NEVER WRITE A CHECK TO YOURSELF Treasurer Responsibilities

14. General Guidelines:  Assures records are in good order and up-to-date  Benefit to treasurer: documentation that good procedures are consistently followed  Internal audit:  Completed annually near year end or after President/Treasurer leaves office  Results communicated to Chapter/Region executive committee- deficiencies corrected  Audit Procedures  See website for detailed audit checklist Treasurer Responsibilities: Auditing

15. Some Possible Warning Signs:  Are financial records organized and readily available? Is the past treasurer accessible?  Have bank statements been reconciled?  Have cash / check receipts been deposited?  Do cash disbursements (checks written) include proper support? (e.g., approved invoices)  Does the chapter executive committee review the financial statements regularly? Treasurer Responsibilities: Auditing

16. Quarter 1 APRIL 1 st – Beginning of fiscal year 15 th – Previous month financial report MAY 15 th – Previous month financial report 31 st – Previous fiscal year financial report to ASSE JUNE 15 th – Previous month financial report Quarter 2 JULY 15 th – Previous month financial report AUGUST 15 th – IRS deadline For 990, 990EZ, 990N & 990T 15 th – Previous month financial report 15 th – Proof of tax filing or extension to ASSE SEPTEMBER 15 th – Previous month financial report Quarter 3 OCTOBER 15 th – Previous month financial report NOVEMBER 15 th – Previous month financial report DECEMBER 15 th – Previous month financial report Quarter 4 JANUARY 15 th – Previous month financial report FEBRUARY 1 st – Executive Committee approval of next years budget 15 th – Previous month financial report MARCH 1 st – Chapter dues notification due to ASSE 15 th – Previous month financial report 31 st – End of fiscal year Critical ASSE Dates

17. Financial Reports – Monthly – General Guidelines:  Treasurer prepares a monthly financial report for the Executive Board. The reports should include:  Income Statement: Revenues and Expenses  Balance Sheet: Assets and Liabilities  Highlight areas of concern  Minutes from each Executive Board meeting should reflect the submittal, review, and approval of financial report.  Treasurer should also ensure that Executive Board receives/reviews all bank statements on a regular basis Treasurer Responsibilities: Reporting

18. Submitted to ASSE HQ Excel spreadsheet Electronically available on ASSE Officer Central Website Annual Financial Report American Society of Safety Engineers _________________ Chapter Annual Financial Report Period Ending March 31, 2011 INCOME STATEMENT REVENUES (Cash Receipts) Dues $ - Meeting Fees $ - Conference/Seminars $ - Special Project $ - Interest $ - Advertising (Unrelated Business) $ - Sale of Product ** (Unrelated Business) $ - Sale of Services (Unrelated Business) $ - Other $ - Gross (total) revenue from Sections $ - REVENUE (Total Receipts) $ - EXPENSES (Cash Disbursements) MEETINGS: Lunch/Dinner $ - Speaker Gifts $ - Other $ - CONF/SEMINAR: Meals/Breaks $ - Speaker Expenses $ - Books & Materials $ - Other $ - NEWSLETTER: Printing $ - Postage & Mailing $ - Other $ - TRAVEL: Officers $ - Other $ - Publicity $ - Special Project $ - Administrative $ - Scholarship $ - Bank Fees $ - Web Hosting $ - Other $ - Gross (total) expense from Sections $ - EXPENSES (Total Disbursements) $ - NET INCOME (Excess Receipts over Disbursements) $ - PREVIOUS YEAR CASH BALANCE - Total Assets from Previous Year NEW CASH BALANCE - Previous Year Cash Balance plus Net Income$0.00 Total Assets as of March 31, 2011 / Bank Balance Savings$0.00 Checking$0.00 Other/CD$0.00 MUST MATCH Deposit In Transit$0.00 (Outstanding Checks)$0.00 NEW CASH BALANCE = Total Bank Balance$0.00 Only one of the following choices should be checked 'yes': Is the average of Chapter’s Gross Receipts for this Fiscal Year and the prior two years less than or equal to $50,000? (If so, a 990N must be filed). Yes____No____ Is the Chapter’s Gross Receipts for this Fiscal Year between $50,000 and $200,000 and total assets less than $500,000? (If so, a 990EZ must be filed) Yes____No____ Is the Chapter’s Gross Receipts for this Fiscal Year greater than or equal to $200,000 or total assets greater than or equal to $500,000? (If so, a 990 must be filed) Yes____No____ Has or will either a 990N, 990EZ, or 990 been filed for fiscal year 2011 (tax return year 2010)? Yes____No____ Is the Chapter’s total unrelated business income (advertising, etc…) less than $1,000 **? (Note: If more than $1,000 a 990T form MUST be filed). Yes____No____ This report includes the financial activities of all Sections chartered for the Chapter. Yes____No____ ** Does not generate UBIT if (1) includes an educational/information message on the product or (2) is accompanied by literature which describes the organization's programs and mission. Chapter Treasurer (Print and Sign Name)Date REPORT DUE 5/31/2011

19. Shown below are actual financial reports submitted ASSE HQ using the Excel spreadsheet: Annual Financial Report - Samples

20.  By March 1: Chapter Dues Change Notification Due  IF changing, notify HQ - email the following information to: chapterservices@asse.org chapterservices@asse.org  Chapter Name/ your name & title  New Dues Amount / Old Dues Amount  Date when Chapter approved new dues amount  By May 31: Upload annual financial report to  http://www.asse.org/committees/finance-reports.asp http://www.asse.org/committees/finance-reports.asp  By August 15:  File tax return(s) with the IRS  Copy of the Chapter’s tax return, proof of filing, or proof of extension Critical Chapter Financial Reports

21. 21 General Chapter Financial Information ASSE is tax exempt - Section 501(C) 6 Exempt from Federal income tax Each chapter is incorporated in the State of Illinois Has its own Federal tax identification number Critical to use correct tax id on IRS tax returns May be tax exempt for your state Check with your state tax authority

22.  File appropriate tax return  Use correct tax id number-THIS IS CRITICAL  Keep good records-pay attention to deadline  Consider hiring a tax accountant if chapter is large  Resources  IRS Website (www.irs.gov) and help linewww.irs.gov  “Chapter Tax Responsibilities” webinar-4/25/12  ASSE Director of Finance, Bruce Sufranski  bsufranski@asse.org bsufranski@asse.org Chapter IRS Responsibilities

23.  Required Form Depends on Chapter Size  Gross Receipts <= $50,000  File Form 990N (ePostcard)  Gross Receipts between $50,000 and $200,000 and Total Assets < $500,000  File Form 990EZ or Form 990  Gross Receipts =>$200,000 OR Total Assets =>$500,000  File Form 990  Unrelated Business Income >$1000  File Form 990T IRS Filings – Tax Year 2010 and Later

24.  ASSE is exempt from state sales tax.  NO - Most states do not exempt from sales tax.  All income is free from federal income tax.  NO - Revenue from unrelated activities is taxable. Ex. Advertising, Sale of services, certain product sales, etc.  Donations to ASSE are tax deductible.  NO - ASSE is not a charitable organization. However, the ASSE Foundation IS a charitable organization and therefore donations to the Foundation are tax deductible. Taxes: Common Misconceptions

25. Questions?

26.  Reduce risk of unlawful or unethical transactions.  Reduce the risk of civil liability to Officers.  Provide Best Practice Accounting Guidelines for Chapters to adopt.  Provide “Transparency” of Financial Management of Chapter’s funds. Chapter Financial Guidelines

27. No monies obtained by the Chapter will be deposited into a personal bank account or any other account, which has not been approved by the Executive Committee. (cash receipts-A) All cash accounts owned by the Chapter will be held in financial institutions, which are federally insured and have been approved by the Executive Committee. (cash receipts-B) All disbursements must be pre-approved by a quorum of the Executive Committee. (cash disbursements-A) Checks shall never be written directly to an individual by the same individual. (cash disbursements-B) Approval for an expense by the member must be indicated on the check request voucher, or at minimum, by e-mail. (cash disbursements-H) Checks shall never be cashed through the petty cash fund. (petty cash-A) A single disbursement from petty cash shall never exceed a pre-set level, determined by the Chapter Executive Committee, such as $20. (petty cash-B) Musts & Shalls

28. The petty cash fund shall be operated on an impress basis which means the amount of the petty cash fund should remain constant: (example- change for meetings/PDCs) (petty cash-C) When it is time to replenish the petty cash fund, the Treasurer shall total out the expenses made and identify those expenses by general ledger account number. (petty cash-C1) In the absence of backup materials, receipts for the purchase must be provided to the Treasurer for attachment to the check request within two weeks from the check date. (purchases-A3) No alcohol may be included on an expense report. (purchases-C3) All contracts to exceed $1,500 over the course of the year must be approved by the Chapter Executive Committee and the contract approved by the Region VP. (purchases-E1) Any contract potential conflict of interest must be presented to the Chapter Executive Committee before the contract is accepted. (purchases-E2) The Minutes from each Chapter Executive Committee meeting shall reflect the submittal and approval of the monthly financial report by the committee. (financial reporting-1) Musts & Shalls

29. The Chapter Executive Committee shall approve new signers to each bank account. (new chapter checklist-A) The Chapter Executive Committee shall approve any new and necessary bank accounts. (new chapter checklist-B) As required, new signers shall complete the appropriate signature card and Chapter resolutions. (new chapter checklist-C) The President shall represent the Chapter at meetings and conferences, unless other attendees are needed. (travel-B1) The dates, location, and reason for travel must be identified and approved by the Chapter Executive Committee. (travel-B2) The vote to approve the travel shall include a discussion on the requested approximate travel expenses to be covered. (travel-B3) Musts & Shalls

30. Financial “Red Flags” Exercise Does the Chapter use a bank account authorized by the Executive Committee? Does more than one person have access to the Chapter bank account? Is the Chapter bank account in the Chapter’s name? Is the Chapter Articles of Incorporation up to date? Are more than one Officer listed on the bank signature cards? Does the Chapter use attendance records at events where money is received? Does the Chapter use a cash receipt book to record cash receivables? Does the Chapter conduct an annual internal audit? Does the Chapter audit cash receipts against the deposit slips and attendance records? Does the audit committee include members other than President and Treasurer? Does the Treasurer provide monthly financial reports?

31. Financial “Red Flags” Exercise Does the Treasurer respond to check requests and issue checks timely? Is the Treasurer employed? Does the Chapter use electronic banking and email alerts? Does more than one officer have access to an authorized Chapter P.O. Box? Does more than one officer have access to Chapter bank statements? Does the Treasurer attend regular Executive Board meetings? Does more than one officer have access to other accounts (PayPal, Cvent)?

32.  Officer Turnover Checklist  Check Request  Travel Reimbursement  Monthly Financial Report  Cash Receipt  Asset Log  Meeting Attendance Log (used to reconcile with cash receipts)  Internal audit checklist  Financial Red-Flag Checklist Forms

33.  Accounting Standard Operating Guidelines  Policies and procedures  Electronic Banking  Email alerts, electronic statements  Internal Financial Audits  Audit checklist  3 rd Party CPA Firm  Officer Training  Leadership Training  Officer Central  Regional Operating Committee meetings ROCs Resources

34.  Many tools and resources to help do your job  Obtain records from your predecessor!  ASSE Website – Officer Central  Treasurer Training  Financial Planning Checklist  Budgeting  Audit Guidelines  Travel Expense Guidelines  ASSE Finance Staff  Other Chapter Treasurers Chapter Treasurers: Resources

35. Questions?