Financial Resource Management Recommended Best Practices

1. Financial Resource Management Recommended Best Practices Training for Volunteers and Support Groups

2. Overview • Core Principles • Examples of Support Groups • Support Group Responsibilities • Tax Exemptions

3. 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

4. Examples of Support Groups • Master Gardeners • Master Naturalists • Program Committees • Task Forces • Others • Texas Extension Education Association • Texas Extension Education Clubs • Others

5. Best Management Practices Support Group Responsibilities • Organization • Finances • Internal Controls • Accountability and oversight

6. Best Management Practices Organization • Support Groups can generate funds through: • 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

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

8. Best Management Practices Finances • Establish bank account (if funds will be generated) • Should be in name of the Support Group • 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 • Do not use personal social security number to set up bank account • Do not use Texas AgriLife Extension tax identification number to set up bank account

9. Best Management Practices Finances • 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 • Identify individual responsible for reconciling bank statements – cannot be an Extension employee

10. 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

11. Best Management Practices Internal Controls • Suggested internal controls for handling funds • 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 • At least two people should be involved in receiving, check writing and reconciliation process • Establish procedures for receipting and disbursing funds • Keep detail records of incoming and outgoing funds • Use pre-numbered multi-copy receipts

12. Best Management Practices Internal Controls • Suggested internal controls for handling funds • 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

13. Best Management Practices Internal Controls • Suggested internal controls for handling funds • 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

14. Best Management Practices Internal Controls • Suggested internal controls for handling funds • 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 • Establish procedures for maintaining records of assets and preforming annual physical count and inspection

15. 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 • Summary report of findings should be reviewed by the support committee • 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

16. Best Management Practices Accountability and Oversight • Proposal/Grant Submissions • Support groups determine what proposals are submitted on behalf of the group • Any documentation that is signed and submitted on behalf of the Support Group should be approved and signed by officers of the group • Support Groups may not commit Extension resources or personnel without prior approval from the agency Director or designee

17. 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

18. 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/taxinfo/taxforms/12-302.pdf

19. Questions?