Best Practices for Clubs and Classes

Webinar Presentation October 30, 2012

Welcome   Thanks for your service to your club, class and college!

Today’s presenters:     Jennifer Evans Casey, Director, Class Activities – Alumni Relations, [email protected]

Sue Young, Senior Associate Director, Club Affairs – Alumni Relations, [email protected]

Hugh O’Reilly ’86, [email protected]

Joe Mannes ‘80, [email protected]

Topics Covered  Examples  Responsibilities  Best Practices

Fraud, Inattention: Not Just Theoretical Issues    Fraud   Alpha Theta Class and Club examples  Theft (use for personal expenses)  Improper use of funds (overnight loans to personal business) Failure to file  Loss of tax status Other  Single signature example

Annual Financial Reports   Classes     File with the College by August 31 Fiscal Year End: June 30 Prepare/distribute an Annual Class Financial Statement What it is: two page report in Excel   Summary headcounts/financials/other Forms the basis for tax filing Clubs    Aim to deliver at August or September meeting Fiscal year ends June 30 Prepare/distribute Financial Report to Club’s Board or ExecCom

Best Practices: Annual Financial Reports   Clubs  Does not need formality of a CPA’s financial statements, but should present:     Profit/Loss data by category Cash balances and any other assets or liabilities Essential to tool for preparing and presenting upcoming year’s Budget If Club files “full” tax returns, align by tax category Classes  Know the due date  Review with treasurer

Taxes     Due annually, 11/15 Know your form (990-N, EZ or the Full Monty)  Depends on gross income, avg. over 3 yrs.

 Reunion years can push a class up to a longer form, so don’t wait until the last minute to determine!

Bad habit to rely on extensions, but better to file for extension than to miss a deadline Failure to file for three years?   Loss of tax status Difficult to restore

Best Practices: Taxes    Know the deadline: 11/15 Confirm filing  Get a copy of the filing confirmation (990-N)  Get a copy of the statement (990-EZ, etc.) Concerned about resources?

 College sends instructions (on website )  Use software/online service  Outside filing help available. (For ex.: One CPA in Hanover offers fixed-fee tax service for Classes and Clubs)

State Filings  Clubs and Classes that are separate legal entities may have annual State filings also    Financial filings – may be state DOR, or another regulator (e.g. Atty. General) Corporate filings with Secretary of State Which officer is responsible varies among clubs/classes

Budgets     Prepare an annual Budget  Typically Treasurer prepares draft; presents to Board or ExecCom for comments / revisions / adoption Consider categories rather than specific events/costs as line items Regularly compare results against budget to improve planning Note unusual liabilities/payments  Projects/Scholarships/etc.

Balance the Books, and Access to Information    Recording income and expenses   Income is more than just dues Accurate Tracking by event/project essential to evaluating outcomes and planning for the next time Maintain an accurate ledger of all financial transactions  Reconcile against bank accounts Options: paper, Excel, accounting packages (box, online), Quickbase

Best Practices: Balancing the Books   Transparency   Second signer (not dual signer) on all accounts Make bank statements available to President – many mechanisms available:    Paper copies Online Banking with shared logon Cloud storage of documents Give “Bus List” to President with acct #s, online passwords, PINs, etc. ( Bank, PayPal,…)  Share bank reconciliations

Interim Reports on Finances   Provide regular updates   Verbal In writing Provide financial statements    Income statement Balance sheet Descriptions of assets held

Best Practices: Interim Reports on Finances   Periodically report in writing – quarterly or mid-year interim report is preferred.

  To President and ExecCom To entire club/class Know your assets  Bank accounts? Other holdings?

 Investment policy statement

Transactions: Collecting Revenue and Paying Financial Liabilities   Pay obligations on a timely basis      Newsletters Gifts/Projects Scholarship Fund contributions  College closes its books on 6/30 Event costs Other costs Prompt payment to college, etc.

 <30 days

Transactions: Collecting Revenue and Paying Liabilities  Collecting the Cash   Timely deposits of Checks  Stale checks (now often 90 days)  Handoffs can cause delays Electronic Payment mechanisms  Many available today  Can be more difficult to track and identify payers

Special Class Topic: Reunions    Significant cash flows May have separate treasurer Reunions are class business   Must be reflected in class finances Must be included in class tax filings

Best Practices: Special Class Topic: Reunions      Prepare, manage and share budget Second signatures on reunion accounts Regular treasurer should have access to financial information Transparency on reunion expenses Timely final reporting required for tax filings

And in Conclusion. . .

Be Informed   Responsibility to your club/class is fundamental. Ask yourself:   “Do we know what and where all our assets are?” “If we had to do a transition today—for any reason—are we prepared?” Know your:    Primary Tasks Key Deadlines Master Checklist provided