Compiled, written, and edited by: Ardis Bazyn
Acknowledgements
Thank you to all of the A.C.B. members who gave valuable input -- Ardis Bazyn
TABLE OF CONTENTS
1. Introduction
2. Opening Checking Accounts
3. General Treasurer's Guidelines
4. Maintaining Checking Accounts
5. Budgeting Process
6. Savings and Investments
7. Treasurer's Reports
8. Fund-raising
9. Membership Lists
10. Mailing Lists
11. Affiliates with Offices
12. Federal Tax Filings
13. State Tax Requirements
14. Filing Incorporation Papers
Introduction
This manual was written to assist the state and special interest affiliates with their record keeping. This document is meant to assist the affiliate treasurers in procedures that would be beneficial for the organization. It should help make transition from one treasurer to another easier.
All affiliates operate in different ways but these guidelines should pertain to all. Obviously, not all treasurers have the same capabilities and these are not meant to discourage any current treasurers. However, this manual is meant to provide a means for starting some procedures that would benefit the affiliate.
This manual contains the normal treasurer's duties. It gives procedures to follow when opening, maintaining, and balancing checking accounts. It also gives information about treasurer's reports and requirements for meetings. It also tells how to prepare and maintain the membership and mailing lists. Finally, tax filings, incorporation filings, and other information about possible documents are discussed.
Opening Checking Accounts
1. A federal tax identification number is necessary before opening a checking account. If the affiliate does not have a federal identification number the bank will use the Social Security number of the treasurer or whoever opens the account. This would cause the bank to list that person as having earned the interest for that account.
2. To receive a tax identification number an application must be filed with the Internal Revenue Service. This only requires filling out a form listing the current officers of the organization and their signatures.
3. Each checking and savings accounts should have at least two signatures. Usually the president and the treasurer are the two signers although this is sometimes based on where the signers live. Emergency situations may come up where the second signature may be needed.
4. An account should only be opened or closed with the permission of the president or the board of directors.
5. When looking for a different bank to open any checking account all charges should be thoroughly investigated. Some banks charge for each check written and each deposit made. Some charge a monthly service charge. Some allow the account to earn interest if the account maintains a certain average balance but will charge a fee if not maintaining that balance. Some have no service charge but no interest if the account maintains a certain balance. Some banks allow accounts with no service charge for nonprofit organizations.
General Treasurers Guidelines
1. All treasurers should be bonded for an amount established by the board of directors. Bonding the treasurer will keep affiliates from incurring any losses due to errors or improper dispersement of funds.
Some affiliates also bond the president as the second signature on the account. Bonding companies can vary greatly in their charges. It is advisable to check with other nonprofit organizations in the local area to determine which would best serve the needs of the affiliate.
2. No withdrawals, dispersement, transfers, or investments should be made without the direction or approval of the president or the board of directors.
3. Some special interest affiliates have a fiscal year starting on July 1 and ending on June 30. This is because their business meeting might be used for planning the yearly budget. Others may use the membership deadline to start the next fiscal year. State affiliates are generally based on the calendar year (January 1 to December 31). Those affiliates who use the July 1 to June 30 or the membership deadline as the beginning of the fiscal year for their accounting should contemplate changing to the calendar year. It is much easier when calculating figures for tax forms that have to be filed. However, the affiliate must decide which is the most efficient for their needs. There are sometimes federal grants that ask for earnings based on the federal year which is from October 1 to September 30.
Maintaining Checking Accounts
1. Records of checks and deposits need to be kept clear and accurate. This will make it easier for an audit to be done without any problems and it will facilitate the changing of positions at a later date.
2. Each bill needs to be filed so that there is a receipt for each check written. It is helpful to write the check number on each bill paid to make it easier to check later.
3. Any check written needs to be approved by the president or the board of directors.
4. If possible, a note should be written on the check memo stating the purpose of the check. This may eliminate confusion if more than one check has been written to the same party.
5. Each month a bank statement will be sent to the treasurer. Each check and deposit should be verified on the check register to be sure that all figures are correct.
6. Check charges and bank charges need to be deducted or interest that may accrue needs to be added to the register.
7. The balance on the check register must agree with the balance on the statement after adding additional deposits to the register amount and subtracting any additional checks from the statement.
8. It can be easier to understand the types of expenses if these records are categorized on a computer spread sheet
9. Some affiliates would rather use a ledger as a second way to verify the check registers. The ledger can also categorize expenditures. This can allow longer explanations to be noted.
10. If you use either a ledger or a spread sheet, your totals should always agree with your check register.
Budgeting Process
1. Some affiliates have the treasurer draw up the budget while others have a finance or budget committee. There are a few who have the president present a budget for approval. In most cases, however, the treasurer has to gather the data from the year before.
2. It is easiest to get the figures from the previous year and delete old expenses and add in new expenses.
3. It is beneficial to get input from committee chairs to find out the possible expenses for the next year if there will be any.
4. Most affiliates do not have any special rules about spending over the budget limit. Most have the board initially approve the budget. The affiliate constitution and bylaws should be consulted to make sure that no special instructions have been provided.
5. A budget guides the treasurer in paying bills. If the budget for expenses is close to the limit the treasurer can consult the president about the proper procedure.
6. Sometimes the board of directors may need to be consulted when a large expenditure is presented that was not on the original budget.
Savings and Investments
1. No savings and investments should be made without the approval of the president or the board of directors. The by-laws of your affiliate may have special rules concerning these types of accounts.
2. Sufficient funds should be kept in the checking account to minimize bank charges. Some banks offer interest or no fees if the balance remains high enough. This advantage should be weighed against the interest that same amount would earn in a savings account.
3. Some treasurers are given the approval to withdraw the interest from a savings account as needed for the checking account. A new treasurer should make sure limitations are understood when taking over a position so no controversy arises later.
4. Some affiliates allow the treasurer to add to the savings whenever the balance reaches a set amount as long as it is reported at the next board meeting. Other affiliates make those recommendations for adding more to the savings when the treasurer gives the report at a board meeting.
Treasurers' Reports
1. The treasurers report consists of the beginning balance, a list of expenses (in categories), and a list of income in categories such as donations and fund-raising activities.
2. This is generally a summary but the treasurer must be prepared to answer questions about any particular amount.
3. A report is usually given at each regular board meeting and convention and the business meeting for national special interest affiliates.
4. Each treasurer should send out a copy of the report before the next board meeting in an alternative format (i.e. Braille, computer disk, or tape and large print).
5. The treasurer may opt to send a copy of the report to the newsletter editor for publication so it is in an alternative format and for members to read. This is easier for many smaller affiliates.
Fund-raising
1. The treasurer is usually on the fund-raising committee since the treasurer is responsible for keeping track of all funds.
2. If using a professional fund-raiser, a separate account must be kept since expenses must come out before the money can be considered the affiliates' to use.
3. Some fund-raising income can be kept in the checking account but should be designated when deposited so later it can be determined if a particular fund-raiser is worth attempting again.
4. As noted under the mailing list, donors from fund-raising letters should be designated. It is usually a sign of willingness to donate in the future.
5. Fund-raising often needs to be encouraged by the treasurer since the treasurer knows how much money is needed.
Membership list
1. Membership lists should be kept accurate and as up to date as possible.
2. Each entry should contain the members name address and phone number.
3. Each entry should also give the choice of format for both the Affiliates Newsletter and the Braille Forum.
4. Each entry should tell the mailing status such as blind or sighted. Some affiliates may prefer to designate blind visually impaired or sighted.
The U.S. Post Office regulations E040.4.0 through E040.4.2 pertain to mail sent without postage. These require that mail sent without postage meet certain requirements. First, the person sent the mail must be unable to read regular print (blind or physically handicapped). Paper, Braille, records, tapes, or other material for the production of reading matter is allowed. The size of the type must be 14 point or larger to be eligible. The envelopes must be left unsealed and must contain the words "Free Matter for the Blind or Handicapped" on the upper right corner of the addressed side.
5. It would be helpful for membership retention to designate whether a member is a new member or a renewal. With this designation it would be easier to check and see if prior members have renewed. This would allow affiliates to call members to find out why they have not renewed. It also will help insure that new members are added to the lists going to the national office for both membership dues and the Braille Forum.
6. The A.C.B. office sends out a membership list each year to check against the current list and affiliates will have to add any new members to that A.C.B. list. The deadline for A.C.B. is on or before March 15. Each affiliate has it's own membership deadline.
7. The treasurer must be sure to provide the information to all who handle the membership lists after receiving each member's dues. This needs to be done throughout the year as any dues are received.
8. It may be easier to change information and retrieve information if you use a computer. Many affiliates use computers for their lists. A variety of programs are currently used. They include: Word Perfect Lotus D Base or Microsoft Works. If you are using a print or Braille list, it will be easier if it is in alphabetical order.
9. It will be helpful to the person keeping the membership list to have on the affiliate application a question asking if the name, address, or phone number may be given out to other members if requested.
Mailing List
1. Some affiliates combine their mailing list and membership list and just designate which names are members. This may depend on which method the affiliate uses for it's records computer print or Braille.
2. Mailing lists need to contain the name address and phone number of each person on the list. Phone numbers are helpful if a copy of a send-out comes back without a postal stamp marking the status. Also sometimes those stamps are not correct. Some mailings have come back marked deceased and the person was found to be very much alive later.
3. Mailing lists should be checked periodically to make sure that those are up to date.
4. Mailing lists need to contain postal information to indicate whether those can be sent free matter or not. It is the affiliate's choice whether it just lists sighted or blind or whether it has visually impaired as a third listing (explanations of the Free Matter qualifications are listed under the Membership Lists).
5. If this mailing list is used for fund-raising it may be helpful to note when the person has made a donation. Sometimes this is an indicator of interest in making donations in the future.
Affiliates With Offices
1. Offices can be used for permanent storage. This is a special benefit when officers change so often that records can get lost.
2. Many offices have the equipment for transcribing minutes and treasurers reports in alternative format for board members. However, the secretary and treasurer must get the information to them in a timely manner to allow them to do so.
3. The office will often file resolutions for the affiliate. The secretary must make sure that the office receives these.
4. The secretary will have to separate the motions from the rest of the minutes in order for the office to file them. If the office does not currently have a separate file for motions, this practice might be encouraged. It will save time when looking for a particular motion later. The office might be the one asked to look through the minutes in the future otherwise.
5. If offices do the accounting for the affiliate, it is important to have a viable check and balance system. This will allow the treasurer to easily follow what has transpired. The treasurer will be the one responsible for signing the checks and must understand what the accountant is working on. It is important for the treasurer to verify the amounts of checks before signing them. This also makes it easier in the future when an audit occurs.
6. Most offices do not do any tax filing unless an accountant does the bookkeeping (tax information listed under "Federal Tax Filings" and "State Tax Filings"). The office will usually store all important documents such as incorporation papers, papers declaring the tax exempt status (501 C 3), the Constitution and By- laws, and any other papers necessary for the organization. However, most secretaries and treasurers keep a current copy of the most recent minutes and treasurers reports since they might be the ones questioned about them.
7. It is important, when taking over the position of either secretary or treasurer, to make sure it is understood what responsibilities are usually given to the office personnel.
8. If the office takes care of the membership and mailing lists, it is important for the secretary and treasurer to get new members' names and addresses to them as soon as possible to keep their records up to date. The information needed for these lists is given under the section labeled "Membership Lists" and "Mailing Lists".
9. Offices should try to accumulate a disk library of all their records. Not only do these disks take less room than paper records, but they are usually more accessible. If copies of these are kept in a different location from other records, no records will be totally lost if damage or loss occurs due to flood, fire, earthquake or misplacement through moves. This office can serve as a more permanent storage location.
Federal Tax Filings
1. Affiliates that earn under $25000 do not have to file for the Internal Revenue Service. If your affiliate wishes to do fund- raising and encourage contributors by indicating that the donations are tax exempt, 501 C 3 status is necessary.
2. To receive tax exempt status, Form 1023 of the Internal Revenue Service must be completed. This application states which sections affect different organizations wishing tax exempt status. All affiliates would be listed as charitable organizations. This also explains that subordinate organizations that are covered by a group exemption letter do not have to file separately. In other words, a chapter in a state or a state special interest affiliate would not have to file for this tax exempt status if group exemption letters have been filed by the state or special interest affiliate.
3. The affiliate will have to submit a description os the activities engaged in by the organization. The description given for a charitable organization is organized and operated for the benefit of public interest.
4. File the completed form with all the necessary information with the key district office in the city where the organization's key place of business or office is located.
5. As soon as possible after the application is received, the affiliate will receive notice of the IRS determination. The affiliate will also be advised which annual returns the organization will be required to file.
NOTE: It may take several months for this to happen. Sometimes the I.R.S. requests more information more than once.
6. The application form gives addresses telling where to submit the form.
7. Affiliates having receipts from $25,000 to $100,000 and having assets under $250,000 may submit the Form 990 EZ.
8. Affiliates having receipts over $100,000 must submit the Form 990 unless there are unrelated business earnings. These are earnings from any enterprise that would be in competition with other businesses, i.e. thrift stores, food stands, or any competitive production. If an affiliate has any of these earnings, the Form 990T must be filed.
9. Affiliates must send 1099's to any subcontractors (persons working on specific projects), to renters of office space, or to individuals earning interest from loans.
10. Any affiliate with employees have to file all federal tax forms for employees, i.e. Form 941 for federal income withholding tax, Social Security, and Medicare: Forms W2, W3, and W4's; and Federal Unemployment forms.
11. Workmen's compensation insurance is also required for affiliates to cover any employee. This can be obtained through most insurance companies.
State Tax Requirements
1. Check what state tax documents must be filed for your organization, call your State Department of Revenue. Most states have limits for the amount of receipts that can be earned in a calendar year before any form needs to be filed. These amounts vary depending on the state. Some states require a form to be filed by all public charities.
2. Many states have support services available for filing tax documents for non-profits.
3. Many states charge sales tax even to non-profit organizations who hold raffles, bingos, or some other fund-raising activities. The State Department of Revenue will be able to give this information.
4. Gambling licenses are required for most organizations that hold raffles, bingos, or similar chance activities. Some have less expensive ones available for one time raffles.
Filing Incorporation Papers
1. If the organization is incorporated papers have to be filed periodically. Some states have yearly filing requirements and some have biannual or triannual filing requirements.
2. Do not allow this filing to lapse. There are substantial penalties for up dating lapsed incorporation papers.
3. It is wise to choose either a member who will remain in the vicinity indefinitely or to have a lawyer as the registered agent.
4. If you are not incorporated or you are not sure contact your state attorney general or the secretary of state. This will depend on which state the affiliate would be registered.
5. Many special interest affiliates have the national office handle the registering and reporting for affiliate corporations in the District of Columbia. This is helpful since special interest affiliates have members in many states. If this is done for the affiliate the treasurer will receive a bill for the registration charge.
The list of special interest affiliates that are currently having their filings done by the national office are as follows: A.C.B. Radio Amateurs A.C.B. Social Service Providers, American Blind Lawyers Association, Braille Revival League, Council of Citizens with Low Vision International, Council of Families with Visual Impairments, A.C.B. Friends in Art, Guide Dog Users Incorporated, National Alliance of Blind Students, National Association of Blind Teachers, Randolph Sheppard Vendors of America, and the Randolpph Sheppard Service Corp. The D.C. Association of Workers for the Blind also has their incorporation papers filed by the national office.
6. If the affiliate is not incorporated, the assets of the officers can be redressed if there is any debt or liability against the organization. If the affiliate is incorporated, no officer can be held responsible unless there is malfeasance involved.