Financial Resource ManagementRecommended Best Practices

Training for Volunteers and Support Groups

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Overview

• Core Principles

• Examples of Support Groups

• Support Group Responsibilities

• Tax Exemptions

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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

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Examples of Support Groups

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Best Management PracticesSupport Group Responsibilities

• Organization

• Finances

• Internal Controls

• Accountability and oversight

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Best Management PracticesOrganization• Support Groups can generate funds

through:

o user feeso sales and registration feeso personal and corporate contributionso 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

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Best Management PracticesOrganization• 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/exempt/

• Texas AgriLife Extension’s tax exempt status cannot be used by Support Groups

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Best Management PracticesFinances• 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 Group’s 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 account

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Best Management PracticesFinances

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

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Best Management PracticesFinances• 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

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Best Management PracticesInternal Controls

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

• Suggested internal controls for 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 checks on account

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Best Management PracticesInternal 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

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Best Management PracticesInternal 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 only- always 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

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Best Management PracticesInternal 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

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Best Management PracticesAccountability 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

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Best Management PracticesAccountability 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

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Tax ExemptionsTexas Sales Tax Exemption

• Exempt entities can be found at the following site:

• http://www.window.state.tx.us/taxinfo/exempt/exempt_search.html

• 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

• Support Groups do not qualify for an automatic sales tax exemption when purchasing from AgriLife entities (including the AgriLife Bookstore).

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Tax ExemptionsTexas 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/taxinfo/taxforms/12-302.pdf

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Questions?