Financial Resource Management
Recommended Best Practices
Training for Volunteers and Support Groups
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
• Texas Extension Education
Association
• Master Naturalists
• Texas Extension Education Clubs
• Program Committees
• Others
• Task Forces
• 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:
o
o
o
o
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 Extension’s 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)
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 Practices
Finances
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 statementsSupport 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 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
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
 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
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Best Management Practices
Internal 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 Practices
Internal 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 Practices
Internal 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 Practices
Accountability 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 Practices
Accountability 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 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
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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/tax
forms/12-302.pdf
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Questions?
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