Financial Resource Management

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Financial Resource Management Recommended 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

• Master Gardeners
• Master Naturalists
• Program Committees
• Task Forces
• Others
• Texas Extension Education Association
• Texas Extension Education Clubs
• Others

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Best Management Practices Support Group
Responsibilities

• Organization
• Finances
• Internal Controls
• Accountability and oversight

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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

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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 Extensions tax exempt status
  cannot be used by Support Groups

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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 Groups 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

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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

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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

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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

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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

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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

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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

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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

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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

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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/exemp
  t_search.html

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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

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Questions?