best practices: financial resource management february 2011

Best Practices:Best Practices:Financial Resource ManagementFinancial Resource Management

February 2011February 2011

Core Principles for Financial Core Principles for Financial Resource ManagementResource Management

• Maintain public trust

• Establish internal and external accountability practices

• Ensure risk management and mitigation

• Minimize risk of support groups and volunteers through education/training

• Identify clear roles of Extension and support groups

2

Core Principles for Financial Core Principles for Financial Resource ManagementResource Management

• Document and communicate best management practice policies and procedures

• Ensure that external resources invested in Extension programs are used in the manner intended

• Ensure compliance with A&M System policies

3

Potential Agency RisksPotential Agency Risks

• Failure to be accountable for resources invested in our agency

• Vulnerability in the mismanagement of funds generated by external support groups

4

Key Elements of Best Key Elements of Best PracticesPractices

• State/Federal law requires that funds raised or given in support of all Extension programs be handled in a manner of public trust.

• Financial responsibility is the responsibility of the entire organization.

5

Key Elements of Best Key Elements of Best PracticesPractices

• Securing external funds for program enhancement is an acceptable way to expand Extension programming.

• Planning, controls, and documentation are major components for managing program finances, assets and taxes.

6

Determination of FundsDetermination of Funds

• Texas AgriLife Extension Service

• External Support Group

7

Determination of FundsDetermination of Funds

• Texas AgriLife Extension Service

8

Stakeholder Accountability Stakeholder Accountability ExpectationsExpectationsAgency FundsAgency Funds

Contracts, Grants and User Fees:

• TAMUS Policies and Procedures

• Director authorized

• On-site reviews / Audits

• Fiscal accountability

9

Type of Agency FundsType of Agency Funds• Designated Funds

• workshops / conferences

• publication sales

• services / labs

• gifts – restricted / unrestricted

• Restricted Funds

• contracts & grants

10

Agency EventsAgency Events

Options for handling agency events internally:

•Extension Conferencing Services

• http://agrilifevents.tamu.edu

•Unit / District Offices – submit revenue to AgriLife Cash Management Office

• http://agrilifeas.tamu.edu/fiscal/cash-mgmt/index.php 11

Contracts & GrantsContracts & Grants

• A grant proposal cannot be requested nor received on behalf of Extension without the Extension Director’s approval.

• All Extension grants will be administered through the AgriLife Contracts and Grants office.

12

Agency Compliance & Record Agency Compliance & Record RetentionRetention

• Agency subject to open records act

• Funds held by agency are subject to state, federal and local audit

• Documentation should be held in compliance with state record retention schedule.

13

Agency Tax ExemptionsAgency Tax Exemptions

• Agency purchases are exempt from state sales tax

• Texas sales and use tax exemption certification required• Sales tax not reimbursable

• Agency may short pay invoice

• Employee responsible for correcting with vendor

• Travel using agency funds qualify for Texas hotel occupancy tax exemption certificate

14

Determination of FundsDetermination of Funds

External Support Groups

15

Stakeholder Accountability Stakeholder Accountability ExpectationsExpectations

External Support Group External Support Group FundsFunds

Contracts, Grants and User Fees:

• Cash Management Practices

• Support Group controlled

• Support Group accountable

16

Key Elements of Best Key Elements of Best PracticesPractices

Support funds generally are:

• user fees

• sales and registration fees

• personal and corporate contributions

• grants/contracts

17

Key Elements of Best Key Elements of Best PracticesPractices

External support group funds are…

• Not the property of Extension

• Not controlled by the agency or its employees

18

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• An external committee/group determines:

• what proposals are signed and submitted on behalf of the external entity.

• may not propose or commit Extension resources or personnel without prior approval by:

• Extension educator

• Immediate supervisor

• AgriLife Contracts and Grants office

19

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

Where Extension staff have access to grant funds received by another entity e.g.,

• county

• foundation

• local 501(c)(3) group

• support group

. . . access to fund should be outlined in writing with allowable expenditures clearly defined.

20

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Support funds may be held by nonprofit status organizations, i.e.:

• 4-H Council

• 4-H Volunteer Leaders Associations

• Master Gardeners Associations

• Extension Program Council

• Extension Program Area Committees

• Legal ownership of funds and property must reside with the association/organization.

21

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Clarifying Extension and support group roles will help:

• safeguard funds

• prevent misunderstandings

• protect Extension and its employees

• A written record of ownership should be prepared with the owner and kept on file in the Extension office.

22

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Extension employees may facilitate registration and the collection of fees for activities and competitions

• In no case will Extension employees receipt, control or make deposits for support group funds. Volunteers or county support staff where necessary, may conduct the process.

23

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Individuals responsible for handling external support funds must do so in an open, responsible and trustworthy manner.

• Administrators, faculty, staff, club managers, and treasurers must carry out their respective responsibilities as defined by the rules and guidelines for handling finances and assets.

24

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Extension does have an interest in ensuring that support groups do not improperly use their relationship or association with the agency when collecting monies or receiving donations.

• Care should be taken to ensure…• use of donated funds match the purpose• utilized in a timely manner

25

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Each county Extension program area should have a committee or task force to direct financial resource management.

• No Extension employee will have custody, signature authority, or online access of an external support group bank account or certificate of deposit.

26

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• External Support Group Responsibilities

• Clearly define individuals in group that have fiscal responsibility of funds.

• Identify a treasurer to maintain records of financial transactions for the organization

• Recommend annual review of financial records by outside group.

27

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• Review of external support accounts helps to ensure:

• Committee has internal controls in place

• Established by-laws

• Proper record keeping and authorizations

• Separation of duties

• Development of annual budget

• Proper tax forms filed

28

Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• All external support groups must have a set of by-laws that include:

• Provisions for receipting and disbursing funds

• Planned disposition of external support group assets if the group disbands

29

Additional ResourcesAdditional Resources

• Best Management Practices: Texas AgriLife Extension Service Financial Resource Management Manual

• Contact your immediate supervisor

30