best practices for clubs and classes

Best Practices for Clubs and Classes

Webinar PresentationOctober 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 ResponsibilitiesBest Practices

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

Fraud, Inattention: Not Just Theoretical Issues

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

Annual Financial Reports

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

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

Transactions: Collecting Revenue and Paying Liabilities

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

best practices for clubs and classes

Documents