FINANCE
An overview of
Centralized Financial Management
1
Pooled Banking System Structure
Special Olympics North Carolina, Inc. (SONC) is the only legal entity authorized by Special
Olympics, Inc. (SOI) and recognized by the State of North Carolina to administer the Special
Olympics Program throughout North Carolina. SONC is a private non-profit corporation and has
a 501(c)(3) status as determined by the Internal Revenue Service (IRS).
A Board of Directors that is responsible for all fiduciary responsibilities, including fundraising
and financial management, governs the organization. The Board also has the responsibility of
employing the President of the organization, who is held responsible for managing the
organization.
Included among the numerous topics of organizational management is the financial
management of the organization. This single function is very important because SONC
annually raises and spends several millions of dollars to carry out the Special Olympics mission.
These funds must be accounted for in a prudent and professional manner to assure the donors
that have contributed to the organization that all funds are being used correctly.
For the benefit of the grassroots level of the organization, a centralized financial management
system exists called the SONC Pooled Banking System. Quite simply, the Pooled Banking
System manages all the funds raised and spent at the grassroots level by its accredited subprogram in the name of Special Olympics.
As a condition to maintaining accreditation with SOI, SONC must ensure that its Sub-Programs
(local programs) conduct their affairs in accordance with the financial management and
reporting standards that are acceptable to SOI.
Based on the SOI General Rules, SONC requires in the SONC Operating Policies that all funds
raised in the name of Special Olympics in North Carolina be deposited in a bank account
opened and maintained solely in the name of Special Olympics North Carolina, Inc.
SONC disburses these funds through designated individuals and/or employees who are
authorized by the SONC Board and President for payment of appropriate and approved Special
Olympics expenses. This policy also allows SONC to meet the SOI requirement of providing
Sub-Program combined results, reflected as a single reporting entity.
SONC is required on an annual basis to have an independent audit so that each year’s financial
management process is reviewed for accuracy, dependability and accountability. Since all
funds raised in the name of Special Olympics, from the grassroots level to the state level, are
maintained by SONC, the audit is conducted more efficiently.
2
Pooled Banking System Purpose
While SONC has lessened the risk of financial improprieties through the use of a centralized
banking system, there are several other practical reasons that Pooled Banking is beneficial.

Accredited local programs are able to use operational funds through the Pooled
Banking System in order to offer training and competition to athletes in their
program. When a local program uses all of its financial resources, it can continue to
operate due to the pooled banking system. In a situation without Pooled Banking, a
local program would not have the ability to offer competition once its financial
resources were exhausted. Note that local programs have to seek prior approval
from the SONC President and show a plan to repay its deficit prior to spending more
than its balance.

A centralized financial management system in one bank account allows for lower
costs of banking as well as more attractive interest rates. Through the Pooled Bank
account, monthly bank fees are shared among the more than 100 local programs with
account balances, rather than each local program paying to maintain a separate
account. Additionally, the large amount of aggregate funds that are in the Pooled
Banking account can generate an interest credit that offsets the costs of bank fees.

The SONC finance staff handles the task of reconciling the Pooled Banking account
statement. This releases the local programs from going through this process.
Additionally, the local program is not required to prepare financial statements from
their transactions. The only requirement is that copies of supporting documentation
be maintained and accompany all check authorization and deposits submitted to
SONC. These records can be used to verify the Pooled Banking statements issued by
the SONC finance staff.

The records generated by the Pooled banking System allow the SONC Board and staff
to track fundraising and expense trends at the grass roots level. This tracking is
important in the development of future budgets and monitoring historical financial
information.
3
Internal Revenue Service
Department of the Treasury
P. O. Box 2508
Cincinnati, OH 45201
Date: May 5, 2005
Person to Contact:
Ms. Jackson 31-07417
Customer Service Representative
Toll Free Telephone Number:
8:00 a.m. to 5:30 p.m. EST
877-829-5500
Fax Number:
513-263-3756
Identification Number:
56-1149607
Special Olympics North Carolina Inc.
2200 Gateway Centre Blvd, Suite 201
Morrisville, NC 27560
Dear Sir or Madam:
This letter is in response to receiving your request to change the address of your organization
to what is reflected in the heading above and on our records.
In November 1972 we issued a determination letter that recognized your organization as
exempt from federal income tax. Our records indicate that your organization is currently
exempt under section 501(c)(3) of the Internal Revenue Code.
Our records indicate that your organization is also classified as a public charity under sections
509(a)(1) and 170(b)(1)(A)(vi) of the Internal Revenue Code.
Our records indicate that contributions to your organization are deductible under section 170
of the Code, and that you are qualified to receive tax deductible bequests, devises, transfers or
gifts under section 2055, 2106 or 2522 of the Internal Revenue Code.
If you have any questions, please call us at the telephone number shown in the heading of this
letter.
Sincerely,
Janna K. Skufca
Janna K. Skufca, Director, TE/GE
Customer Account Services
4
Check Authorizations
A SONC Check Authorization form is used to request payment for expenses from a Pooled
banking account by the accredited local program coordinator. These authorizations, along with
supporting invoices or receipts, must be submitted in a timely fashion to ensure that bills are
paid on time. SONC cannot pay expenses from account statements or packing slips issued by
vendors because statements usually lack the detail required for proper review. Check
authorizations should be forwarded directly to the appropriate SONC field services director,
who then will forward to the SONC Finance Department.
Proper supporting documentation must accompany ALL check authorization forms with the
exception of cash advance requests. Any check authorization without supporting
documentation, or one that is not filled out completely will be returned to the Local
Coordinator for correction.
Checks are issued once a week, usually on Tuesdays. Authorizations for payment of invoices
should be submitted to your area director well in advance and completed properly in order to
ensure timely processing payments. Request for payments turned in to the SONC Finance
Department by Monday at 5:00 p.m. will most likely be issued in the following Tuesday’s check
processing. However, in the event a question arises concerning an invoice, the authorization
will not be processed until research is completed. The SONC president ultimately has the
authority to approve all authorizations.
Only accredited active local programs are able to disburse funds from a Pooled Banking
account. Due to the fact that all checks are issued weekly, we believe that this leaves adequate
time for local programs to turn in their check authorizations. To further ensure vendors receive
payments in a timely fashion, we request that any arrangements made with vendors include
net 30 days payment terms.
5
Instructions
Payee: Name of vendor to receive payment.
Address: This is the complete address where check is to be mailed. Payments are sometimes
mailed to an address other than their physical address. It can be noted as the “Remit
To” address.
Invoice#: We can and do track payments to vendors by their invoice number. It is important
that you list the invoice number on the check authorization. If no invoice number is
available, use the date of the request as your invoice number. Ex: Request Date is
June 25, 2005, your invoice number would then be 062505.
Invoice Date: This is the date the vendor issued the invoice or the date of your request.
Brief Description of Purchase: This provides the basic information for the purchase, for
example: “T-shirts Spring Games” or “Port-A-Jons Fiesta Biathlon”.
Account Number:
This is the SONC assigned account number. It indicates the type
of purchase it was, such as 8133 - uniforms, 7121 – officials, etc. Please refer to “Chart
of Accounts” for the correct codes
Account Description: This is the description for the account code used, example:
uniforms, photography, or officials.
Purchase Amount: This amount is the total purchase price of the individual items and it does
not include sales tax.
Sales Tax: This amount should equal the amount of state and local taxes for the total
items purchased. SONC files a refund with the state and applicable local municipalities
every six months in order to get this money back for the local programs.
Total Purchase Amount: Total amount of invoice including sales tax. This amount
must equal the total amount of invoice or total of all receipts.
Local Program: This is the name and number of your local program. Ex: Iredell, #78
Local Program Coordinator: Only the Local Program Coordinator is authorized to
approve purchases made on behalf of the local program.
Date: Date submitted by Local Coordinator.
Field Services Director: This is where your SONC field services director verifies that they have
reviewed the check authorization before sending it to the SONC Finance office.
Date: Date approved and submitted by field services director.
6
Sales Tax:
SONC applies for a tax refund annually and local programs get their tax reimbursement amount
credited to their account, so it is important to document all sales taxes that are paid. The
amount of the local program tax reimbursement is based on what is documented and
submitted.
Document all sales tax with the exceptions noted below. This includes tax paid on meals,
uniforms, sports equipment, etc. The tax must be shown on the receipt.
DO NOT break out tax paid on any of the following:





Electricity, piped natural gas, telephone services
The purchase, lease or rental of motor vehicles
Local occupancy or local prepared food and beverage taxes
Scrap tire disposal or white goods disposal taxes
Reimbursements for out of pocket/volunteer reimbursements. This does not affect
cash advance returns.
7
Cash Advance and Cash Advance Return
Cash advances for the sole use of SONC expenses up to $2,500 are allowable at any time to
SONC staff and volunteers in good standing, subject to approval of the president or his
designated representative. Cash advances are a way to reduce the amount of out-of-pocket
expenses for volunteers. Issuing cash advances will prevent volunteers from being burdened
with outflows of personal cash during events. Amounts above $2,501 can be issued if approved
by the president. The SONC Finance Dept. is responsible for informing the area director of any
cash advances that remain outstanding for 60 days. If at any time, cash advances remain
outstanding for 60 days and exceed $500, that sub-program/person will not be given another
advance until the entire balance exceeding 60 days is resolved.
Limitations will be placed on cash advances in violation of the above limits even if the offender
is not informed of his/her delinquency in a timely manner. Note that a sub-program/person
will continue to be reimbursed for expenses regardless of their cash advance status. This
procedure is not meant to penalize athletes, but to mitigate the risk of improprieties of Special
Olympics funds.
Cash advances will be processed after receiving an approved check authorization form from the
requesting party. The request will be reviewed by the SONC Finance Dept. for other advances
that have become delinquent in accordance with this policy. The cash advance request will be
issued in the form of a check to the party if s/he is in good standing. On a regular basis, SONC
will review the listing of outstanding cash advances for delinquency. Upon discovery of
delinquent cash advances, SONC will inform the area director of their status. If a party is found
to be in violation of the delinquency policy and that delinquent amount exceeds the threshold,
no additional cash advances will be granted until the entire amount exceeding 60 days is
resolved.
Prior to an event that requires a volunteer to have cash, the local coordinator should complete
a check authorization requesting a cash advance for that event. It is recommended that the
local coordinator allow at least four weeks for SONC to receive process and return a check to
the volunteer. This is important, as without enough notice prior to the event, SONC cannot
guarantee that the volunteer will receive the cash advance check in a timely manner.
After using the cash from an advance, the volunteer needs to complete the cash advance report
form that was mailed to them with the advance check. This form is used to detail the expenses
paid for with the advance. All expenses should be supported with receipts. Hand written
receipts, unless containing the stamp of the business or on business letterhead, are not
acceptable. Please attach all receipts to the receipt form. It is extremely important that these
receipts are provided due to the fact that SONC is audited annually. The SONC Finance
Department and auditors review cash advances receipts to ensure that all purchases are in the
best interest of SONC.
8
If the volunteer does not spend the entire cash advance, this money should be deposited into
the local program pooled account (coded to the cash advance return account number with the
name of the individual who received the advanced listed as well). Please make sure to label
these deposits clearly for proper credit by the SONC Finance Dept. If the volunteer spends
more than the cash advance, that volunteer can indicate that they would like to be reimbursed
for the amount spent over the advance. SONC will review these forms and reimburse any
volunteer who indicates they would like to be reimbursed.
Instructions for cash advance returns:

Complete the top portion of the form including your program name, pooled account
number, and the name of the person who received the cash advance.

In the description section, total up your receipts by account codes, not by vendors.
Example:
o Uniforms for local competition would be account code 8133
o Meals during state games travel would be account code 8163

Make sure to separate out the tax on your receipts and put the total amount of tax
paid on the last line as indicated.

Take all your receipts and tape or staple them to a plain sheet of 8½ x 11 paper so
that you can see each receipt. You can have several receipts on one page and can
use as many sheets as necessary to hold all of your receipts.

Attach the receipt pages to the back of your cash advance return form.

If you have not spent the entire amount of the cash advance, complete a deposit slip
and take it to the bank. Attach the imprinted copy of the deposit slip to the cash
advance return form.

If you have spent more than the cash advance amount, indicate if you want to be
reimbursed or want that to be considered a donation to your local program.

Make photocopies of all of the pages of the cash advance return sheets and mail the
original to your area director.
Cash advance return forms that are not completed correctly can delay any reimbursement. If
you have questions or need clarification on these instructions, please contact your area
director.
9
Volunteer Expense Reimbursement
A volunteer expense reimbursement form is provided on the next page. Please use this form to
receive reimbursement for expenses that you or your volunteers have paid on behalf of Special
Olympics. This form should be forwarded to the appropriate SONC area director, after being
signed by the local coordinator, for processing. The check will be paid to the name on the top
of the form and mailed to the address on the top of the form. It is also important to list the
local program name and number to ensure proper processing.
Instructions for Volunteer Expense Reimbursement








Fill in the local program name and coordinator’s name
Fill in the name of the volunteer who will be reimbursed and include their full mailing
address
For travel on behalf of SONC, fill in the top grid with:
o The date
o Beginning, ending and total mileage
o The purpose for the travel.
o Your local coordinator can complete the account codes section.
o Please note that the IRS sets the mileage reimbursement rate for volunteers. The
current rate for 2007 is 14 cents per mile.
For purchases made on behalf of SONC, fill in the bottom grid with:
o The date
o Description of the purchase, ex. office supplies, refreshments, etc
o Enter the full amount of the purchase including taxes paid
o An explanation for the purchase, ex. Spring Games, committee meeting, etc.
o Your local coordinator can complete the account codes section
Add up the total expenses from the top grid and the bottom grid for the grand total
Check the box to be reimbursed – OR – check the box to consider this a donation to the
local program.
Sign and date the form
Send it to the area director to be processed
Please note:
Because SONC cannot file for a refund of sales tax with a volunteer expense form, sale tax is
not listed separately on reimbursements.
10
Deposits
Any money donated to your local program should be deposited immediately upon its receipt. Donations
not deposited in a timely manner could be misplaced.
Consistent with the process for check authorizations, deposit slips should be sent to your area director
as soon as the actual deposit is made. Deposit slips must be validated by the bank (dated receipt)
before the local program will receive credit of the funds. Failure to turn these in can result in deposits
not being properly credited to an appropriate pooled account.
If possible, please attach copies of the check donations with the appropriate deposit slip before
submitting to the field services director. SONC will use these copies for donor source tracking,
reconciliation and the annual audit.
The proper way to complete the Deposit slip is as follows:

Use the correct deposit slip. Use the SONC deposit slips with the account number 20
– 6263 – 0862007. You can get these deposit slips from your field services director.
Do not use the blank deposit slips provided at the bank.

On the top of the slip are two lines that reference your program and unit code. Be
sure to neatly complete these two lines with your program name (program line) and
number (unit code).

Currency/Checks: These two items should be filled in accordingly listing a grand
total at the bottom. If you need more than one deposit slip or deposit form, list the
total of the entire deposit only once on each form.
If you do not have a Wells Fargo Bank in your county, please send the completed bank deposit
slip, the “Local Program Deposit Form”, and the checks for the deposit to your field services
director. If the deposit slips do not have a third copy for your records, keep the receipt given to
you by the bank or make a copy to send to the field services director.
If you deposit money into the pooled account but do not send in your paperwork, those funds
will be listed on the “Unidentified Deposits” list. To claim the funds for your local program,
simply submit the deposit paperwork to your field services director.
11
Local Program Deposit Form
After you have completed the bank deposit slip and taken it to your local Wachovia Bank, take
one of the copies returned to you and tape or staple it to the Local Program/Agency Deposit
Form. See attached sample.
Program Name:
List the name of your program here.
Number:
This is your local program number (also referred to as unit code on the
deposit slip).
Region
This is your SONC region (East or West)
Date of Deposit:
the deposit slip.
This is the date the deposit is posted by the bank. It is
imprinted on
Account No.:
This is the revenue account number. Please refer to the bottom of the
form for numbers.
Received From:
This is the donor source. Example: Walmart, various donors, etc.
Description / Purpose: This is description for the deposit. Please be specific so that funds
raised will be properly and consistently tracked. Example: Candy Sale, Golf Tournament, Letter
Campaign.
Amount:
List total amount of each line item by account number.
Local Coordinator and Field Services Director Line: Appropriate signature required.
Please Note: If you have more than one check and all are the same type of donation, total all
and list only once on the deposit form. The only exception would be a large donation that you
want to track separately.
EX: J. Smith
A. Brady
L. West
$ 50 List As Follows: 01-3110-998 Various Donors $150
$100
01-3110-998 L. West
$800
12
$800
13
NSF (Insufficient Funds) Notices
When a local program deposits a check that gets returned for insufficient funds (NSF) or
bounces, Wells Fargo will send a notice to the SONC finance office. The returned checks may
be sent to Checkcare Systems Inc, a check verification service company that SONC has
contracted to pursue any bad checks deposited into the organization’s account.
Local programs will be notified of returned checks included in their respective deposits with the
memo on the bottom of this page. Money recovered by Checkcare on checks deposited into a
local program’s account will be returned to that local program.
MEMORANDUM
Date:
To:
From: Cara Hudson, Finance
cc:
Re: Non Sufficient Funds (NSF) Deposit
Enclosed please find a copy of a returned check that was recorded as a deposit for your local
program. According to our records, this check was originally deposited in
_________________________County, on _________________________, and has been
returned for the following reason: _____________________________.
We have removed the amount represented in this check from your local program’s pooled
account since the funds are not available for Special Olympics use. We have forwarded the bad
check to Checkcare Systems Inc, who will pursue the funds from the check writer. Any money
collected on the bad check will be returned to your local program’s account.
If you have any questions, please feel free to contact me at 800-843-6276, ext. 107, or your
field services director.
14
Value In-Kind Donations
Every local program gets support in some form from their community. This support might be
services, reduced costs for items, or budget assistance. Any donation of services, goods or
funds that is budget relieving, i.e., the local program would usually incur a cost for, is
considered Value In Kind (VIK). The main types of VIK are non-cash donation of goods,
professional services, appropriation of funds.
Non-cash donations of goods:
Non-cash donations of goods are donations of items other than cash that are tangible. A
donation of sports equipment is a perfect example. Any donation of goods is an in-kind
regardless of its value to the public or the Organization. While these things have a value, it is
sometimes difficult to quantify how much they are worth. The best way to calculate their
worth is to either ask the donor or find out how much it would cost to buy the item from a
store. Finding out this information is important for the donor, as well as the SONC office. The
donor needs this information in order to receive a tax deduction for his/her gift. The value of
the item(s) should match the amount listed on any thank you note that is returned to the
donor. It is important for the SONC office to properly account for this gift.
Donation of time by specialists
Accounting procedures dictate that only a donation of time from a specialist counts as an inkind donation of time. A good example is a doctor that donates his time for physicals or the PE
instructor that serves as the Games Director for your local competition. The value of this gift is
the hourly rate that this person would normally be paid for their service multiplied by the
number of hours they volunteer. The easiest way to find out the hourly rate for this person is
by asking them. Volunteers that serve in roles that are not related to their profession, such as a
secretary volunteering as a timer for the local games, can not be included.
Appropriation of funds from government, schools, etc.
Frequently local governments and school systems will allocate funds to support the local
program. All expenses that are paid by these entities supplement the operation of the local
program and are considered VIK.
VIK contributions should be documented either per donation or on a VIK log.
These documents will assist you with tracking your donors and supply
information for future fundraising campaigns and volunteers. The VIK forms can
be turned in periodically or at the conclusion of the season/year. Submitting VIK
documentation is a required part of the local program accreditation.
15
Budget Process:
The process of establishing a budget is very important for the financial success of each local
program. It is important to plan your expenses for the upcoming year in order to understand
the amount of fund raising that needs to be performed in order to do all the activities that you
have planned. As a general rule, the total amount of your expenses should not exceed the
amount of revenue that you can generate.
During the year, it is important to compare your budget to the actual expenses and revenue in
order to make sure that your local program will be able to meet its budget. If the local program
is over budget, this is the time to either plan for more fundraising efforts or cut back on
expenses in order to make budget. Field services directors are available if you need assistance
with this process.
Financial Reporting:
The local program coordinator will receive a packet of financial information pertaining to the
local program. This packet should be used to check all transactions to ensure that they have
been properly recorded. Any discrepancies between your records and the pooled banking
records can be resolved, if brought to the attention of your field services director, in a timely
manner. SONC recommends that all local coordinators review these reports as they are
received.
Checks disbursed, deposits made and any other transactions involving local program funds will
be listed in the month in which they occurred. Keep in mind that cash disbursements will
appear on this listing on the date in which they were issued by SONC and not when they left the
local program office. Also note that the checks deposited at the end of the month will not
always appear in that month due to the timing in which they clear the bank.
16
While it is strongly encouraged that this statement be reviewed monthly, local programs will
only be asked to confirm agreement of their balance at the end of each calendar year. This
confirmation process is performed to give local programs one last chance to find any errors
prior to the auditors’ review and the closing of the books. After the auditor’s review, local
programs no longer have the ability to correct errors found in the prior year – so please review
your statements carefully.
Investment Policy
Special Olympics North Carolina, Inc. Investment (savings) Program
The Board of Directors for Special Olympics North Carolina, Inc. (SONC) is responsible for the
governance and fiduciary oversight of the Special Olympics movement as determined by Special
Olympics, Inc. (SOI), the State of North Carolina and the Internal Revenue Service (IRS). SOI sets
forth policies and procedures for accreditation as a United States Program. The State of North
Carolina and the IRS determine laws and regulations which non-profit organizations must follow
to maintain 501 c 3 and incorporation status.
In its role to oversee the financial management aspect of the organization, the Board has given
the President of SONC the authority to establish financial management procedures. These
procedures ensure that all funds raised in the name of Special Olympics are spent in an
appropriate manner as established by expectations of the Board, SONC’s financial auditor, the
SONC staff and SOI.
All accredited Local Programs are required to use the Pooled Banking System as established by
the SONC Operating Policies set forth by the Board of Directors. Local Programs that lose their
accreditation also lose the right to use the name Special Olympics, and therefore all funds are
frozen by SONC until such time that an accredited local program is reestablished to carry out
the mission of Special Olympics on behalf of SONC in that jurisdiction.
In some cases, Local Programs raise more funds than are needed for expenses in a given year.
In this case, the Board of Directors have an investment policy for managing funds that they
deem appropriate to put in an investment account that is managed by a professional investor
with oversight by the SONC President and the Board of Directors. The investment policy was
revised in 2000 by the Board’s Finance Committee with input from members of the committee,
the SONC Board, Wachovia Securities (formerly First Union Securities), Smith Barney and
17
SONC’s law firm at the time (Smith Helms Mulliss & Moore). The SONC investment policy is
included in the SONC Operating Policies, which is available on the SONC website.
During the course of the year, Local Program coordinators may deposit funds in the investment
account by submitting a check authorization request form to the SONC Finance Director.
However, before deposits are made it is important to determine that the funds will not be
needed for upcoming operational expenses.
The Raleigh office of Wells Fargo Advisors (formerly Wachovia Securities) manages the
investments. Withdrawal of funds from the investment program can be requested by
contacting the SONC President..
The investment account activity is reflected on the pooled banking statements with interest,
and gains/losses posted quarterly. Electronic monitoring of the account by Local Program
Coordinators is not possible.
18