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

3.  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

4.  Governmental Exemption  County Extension is tax exempt because Extension Districts are considered a governmental subdivision of the Commonwealth (KRS 164.620)  501(c)3 status  Needed to accept certain grants or to conduct numerous gaming or raffle fund raisers (see KY regulations on Gaming)

5.  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

6.  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

7.  The county program councils and their related sub-groups will maintain control and have autonomy over their own funds and individual bank account with general oversight by the County Program Council  The appropriate agent will be responsible for adherence to procedures

8.  Funds related to a program area in the county will be handled centrally by the appropriate county program council, with separate sub- accounts established in a Quicken, Quickbooks or similar electronic bookkeeping system for each related entity’s (club/group/etc.) funds.  The appropriate agent will be responsible for adherence to procedures

9.  County Program Council funds will be handled centrally by the County Extension District Board with a separate sub-account established for each County Program Council in a Quicken, Quickbooks or similar electronic bookkeeping system.

10.  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 Program Council and County Extension Council

11.  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:  Link to the KY 4-H Foundation OR  Link to a county 4-H program for government exemption and follow their guidelines

12.  By March 15 EACH 4-H club/council or entity with an EIN/Checkbook must decide the option chosen. (Option A, B, C, or D)  State 4-H Office will be surveying each county to verify which plan is chosen which will then be reported to National 4-H HQ

13.  Can be included in the Governmental Exemption, but may have to decide before all of the details are known  Can form own 501(c)3 organization.

14.  To be developed.