1. Financial Management for State and Regionals: Best Practices for Busy Leaders
Ari Kaufman, Associate Registrar for Operations – Berklee College of Music
Chair, AACRAO State & Regional Relations Committee
Treasurer, NEACRAO (New England)
April 14, 2013

2. The Reality of Managing the Finances of a State or Regional ACRAO
We have full-time jobs as Registrars, Admissions Officers and Enrollment Managers.
Board members are almost always spread out in different locations.
We are often friends with our fellow board members. Can we ask the hard questions?
There is often no instruction manual to tell us all the things we should be doing.

3. The Reality of Managing the Finances of a State and Regional ACRAO
It is often hard to find volunteers to serve the organization.
Budgets are limited. Thus robust software for membership tracking is not always possible.
State and Regional Presidents usually change from year to year.
Cash basis accounting (instead of accrual based) is how we usually record activity.

4. What “Must” We Be Doing? Incorporation Insurance
Receive invoices and pay them
Send invoices and deposit checks
Manage Bank Accounts
Prepare Financial Reports for Meetings
File Tax Forms

5. Incorporate ! Is your ACRAO Incorporated as a Nonprofit?
Why is this crucial?
Board Members avoid personal liability
Tax exempt status
Also…
Donations received are tax-exempt
Lower postage rates

6. Incorporate !
Keep your incorporation documents up-to-date and in a safe place. Find out how often they need to be renewed.
Example: In Massachusetts, we need to file an annual renewal report each year which costs a small fee of $15.00

7. Insure your ACRAO
Make sure you have general liability insurance to protect the assets of the organization against lawsuits due to such things as:
Injuries at conferences
Property Damage

8. Insurance Questions How much insurance should you carry?
Are legal fees from a lawsuit covered?
Should you have special liquor liability insurance?
Other kinds of insurance?

9. Tax Forms
Find out which of the three Tax Forms your organization should file annually:
Form 990N ( < $50,000 in gross receipts)
Form 990EZ ( < $200,000 in gross receipts and total assets < $500,000)
Form ( >= $200,000 in gross receipts and total assets >= $500,000)

10. Filing Tax Returns
When is your ACRAO’s Fiscal Year End and when is your Annual Meeting ?
If necessary you can get a extension
Example: NEACRAO’s Fiscal Year End is June 30. Tax return is due on Nov 15. We ask for a 3 month extension so the tax return can be prepared

11. Using a Tax Accountant
Using a CPA or other qualified tax preparer is a good idea

12. Day to Day Bookkeeping and Treasurer Duties you Must Do….
Pay outstanding invoices – keep copies of invoices
Deposit checks
Reconcile bank statements monthly and print out and keep copies of the reconciliations
Document business purpose for every check written
Update signers on your account each year
Safeguarding your assets (check book, credit cards)

13. Bookkeeping and Treasurer Duties that Should Be Done….
Arrange for an periodic independent review
Audit Committee (good)
Independent Accountant (better)
How often should this be done?
Annually?
At least once during each Treasurer’s term

14. Using an Independent Accountant
Agreed Upon Procedures
Can be tailor made to suit your organization
Procedures Could Include:
Reviewing a sample of cash disbursements
Reviewing your internal controls
Reviewing bank statements, reconciliations
Reviewing a sample of cash receipts

15. Using an Audit Committee
Members of the State or Regional would comprise this committee
Same objectives as using an independent accountant, but less professional expertise
How often should this independent review be done?
How do you find volunteers for this?

16. Audit Committee and Board
Asking the tough questions of your Treasurer can be interpersonally difficult
You don’t enjoy putting people on the spot at a board or annual meeting
What are some alternatives?
Getting the financials to board members ahead of time and questions back to Treasurer ahead of meeting

17. Bookkeeping and Treasurer Duties that Should Be Done….
Follow-up with uncollected invoices (i.e. conference attendees that never sent in their checks.)
Make deposits in a timely fashion
Pay invoices / reimburse people within 30 days
Send new membership renewal letters before the end of the current fiscal year

18. Bookkeeping and Treasurer Duties that Should Be Done….
Segregation of Duties
The person receiving cash should not be the person recording the transaction. Access to the bank statement should be available to more than one person
Two signatures for checks over a certain dollar amount
System to ensure same invoice doesn’t get paid twice
Minutes should be maintained
Backup copies of accounting files

19. Bookkeeping and Treasurer Duties that Could Be Done….
Budgeting
Preparing a Budget for the upcoming fiscal year
Approving a Budget
Reviewing underages and overages
Why this is hard in a cash basis system
What is the risk of not doing budgeting

20. Bookkeeping and Treasurer Duties that Would Be Done If…
Membership Work
Following up with each member that has not renewed their dues until a confirmed answer is received. Develop formal procedures to collect late dues.
Soliciting new members - colleges in your state or region that are not currently members

21. Questions?