Financial Resource Management Recommended Best Practices Training for
Financial Resource Management Recommended Best Practices Training for Volunteers and Support Groups Overview Core Principles Examples of Support Groups Support Group Responsibilities Tax Exemptions 2 Core Principles for Financial Resource Management Maintain public trust
Ensure internal and external accountability Ensure risk management and mitigation Minimize risk to support groups and volunteers through education/training Clearly identify role of Extension and role of Support Group 3 Examples of Support Groups 4 Best Management
Practices Support Group Responsibilities Organization Finances Internal Controls Accountability and oversight 5 Best Management Practices Organization Support Groups can generate funds through: o
o o o user fees sales and registration fees personal and corporate contributions grants/contracts Funds generated by Support Groups are not the property of AgriLife Extension and are not controlled by Extension or its employees Funds generated by Support Groups must be handled in a fiscally sound and responsible way
6 Best Management Practices Organization Develop written by-laws Identify officers, appoint a treasurer Obtain EIN (employer identification number) If appropriate, apply for Texas sales tax exemption with Comptroller of Public Accounts at http://www.window.state.tx.us/taxinfo/exe mpt/
Texas AgriLife Extensions tax exempt status cannot be used by Support Groups 7 Best Management Practices Finances Establish bank account (if funds will be generated) o Should be in name of the Support Group o Cannot be in name of Extension agent or AgriLife Extension. Name on the account should not include a reference to Extension unless
part of the Support Groups legal name o Do not use personal social security number to set up bank account o Do not use Texas AgriLife Extension tax identification number to set up bank 8 Best Management Practices Finances o Designate address for bank statements- should be addressed to
Support Group Can be a post office box Can be the Extension office, but must be in name of Support Group - Extension employees should not open statements- Support Group treasurer should be notified when bank statements arrive in mail o Identify individual responsible for reconciling bank statements cannot be an Extension employee 9
Best Management Practices Finances Assign signature authority to limited number of people- online access to bank accounts should be to limited number of people Review signature authority annually and update immediately with signed letter from officers when signature authority or online access changes Establish procedures for who can purchase and sell assets Establish procedures for identification and control of physical assets Establish procedures for financial record keeping and annual review of records Develop and review budget annually File any required tax forms 10
Best Management Practices Suggested internal controls for Internal Controls handling funds o Ensure separation of duties Individual receiving funds should be different from individual writing checks on the account Individual reconciling bank statement should not write
on account checks At least two people should be involved in receiving, check writing and reconciliation process o Establish procedures for receipting and disbursing funds Keep detail records of incoming and outgoing funds Use pre-numbered multi-copy receipts 11 Best Management Practices Internal Controls Suggested internal controls for handling funds o Establish procedures for receipting and disbursing funds Record and deposit funds immediately upon receipt
Recommend depositing funds daily if greater than $200 or within 3 working days if less than $200 Make all payments by serially numbered checks Maintain and account for duplicate copies of receipts given to individuals Do not make checks payable to Cash Have approval process for any checks written 12 Best Management Practices Internal Controls
Suggested internal controls for handling funds o Establish procedures for receipting and disbursing funds Ensure goods or services are received and in good condition before issuing payment to vendor Issue checks to vendor against original invoices onlyalways re-add and verify amount of invoice Keep funds in secure location prior to deposit Reimbursements to individuals should only be made when supported by receipts or paid invoices. When supporting documentation of expense is not available, a signed affidavit of expenditure should be required
13 Best Management Practices Internal Controls Suggested internal controls for handling funds o Establish procedures for reconciling bank statements Individual writing checks should not be reconciling the bank statements. If this is the case, other checks and balances should be in place to provide oversight of reconciliation process o Establish procedures for
maintaining records of assets and preforming annual physical count and inspection 14 Best Management Practices Accountability and Oversight Review list of officers annually to ensure signature authorities are current Recommend annual review of financial records by outside group o Summary report of findings should be reviewed by the support committee o Copy of annual financial review should be submitted to the Extension Office
Support group records should not be maintained on agency computers; any records on agency computers are subject to open record requests 15 Best Management Practices Accountability and Oversight Proposal/Grant Submissions o Support groups determine what proposals are submitted on behalf of the group o Any documentation that is signed and submitted on behalf of the Support Group should be approved and signed by officers of the group
o Support Groups may not commit Extension resources or personnel without prior approval from the agency Director or designee 16 Tax Exemptions Texas Sales Tax Exemption Support Groups do not qualify for an automatic sales tax exemption when purchasing from AgriLife entities (including the AgriLife Bookstore). Support Groups must provide a current Sales Tax Exemption Certification to AgriLife Extension Texas sales tax will be applied to
Support Group purchases unless proof of Texas Sales Tax exemption is provided Exempt entities can be found at the following site: http://www.window.state.tx.us/taxinfo/exempt/ exempt_search.html 17 Tax Exemptions Texas Hotel Tax Exemption form 12-302 Texas Hotel Tax Exemption is not for use by any Support Group as a representative of AgriLife Extension, including 4-H members, parents, or volunteers.
Texas Hotel Tax Exemption is not for use by agents who are receiving travel reimbursement from local or county funds. Texas Hotel Tax Exemption may be used by state employees on state business who are receiving reimbursement from state funds. http://www.window.state.tx.us/ 18 Questions? 19
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