Best Practices:
Financial Resource Management
February 2011
Core Principles for Financial Resource
Management
• Maintain public trust
• Establish internal and external
accountability practices
• Ensure risk management and mitigation
• Minimize risk of support groups and
volunteers through education/training
• Identify clear roles of Extension and
support groups
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Core Principles for Financial Resource
Management
• Document and communicate best
management practice policies and
procedures
• Ensure that external resources invested
in Extension programs are used in the
manner intended
• Ensure compliance with A&M System
policies
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Potential Agency Risks
• Failure to be accountable for resources
invested in our agency
• Vulnerability in the mismanagement of
funds generated by external support
groups
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Key Elements of Best Practices
• State/Federal law requires that funds
raised or given in support of all Extension
programs be handled in a manner of
public trust.
• Financial responsibility is the
responsibility of the entire organization.
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Key Elements of Best Practices
• Securing external funds for program
enhancement is an acceptable way to
expand Extension programming.
• Planning, controls, and documentation are
major components for managing program
finances, assets and taxes.
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Determination of Funds
• Texas AgriLife Extension Service
• External Support Group
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Determination of Funds
• Texas AgriLife Extension Service
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Stakeholder Accountability Expectations
Agency Funds
Contracts, Grants and User Fees:
• TAMUS Policies and Procedures
• Director authorized
• On-site reviews / Audits
• Fiscal accountability
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Type of Agency Funds
• Designated Funds
• workshops / conferences
• publication sales
• services / labs
• gifts – restricted / unrestricted
• Restricted Funds
• contracts & grants
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Agency Events
Options for handling agency events
internally:
• Extension Conferencing Services
• http://agrilifevents.tamu.edu
• Unit / District Offices – submit revenue
to AgriLife Cash Management Office
• http://agrilifeas.tamu.edu/fiscal/cashmgmt/index.php
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Contracts & Grants
• A grant proposal cannot be requested
nor received on behalf of Extension
without the Extension Director’s
approval.
• All Extension grants will be administered
through the AgriLife Contracts and
Grants office.
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Agency Compliance & Record Retention
• Agency subject to open records act
• Funds held by agency are subject to state,
federal and local audit
• Documentation should be held in
compliance with state record retention
schedule.
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Agency Tax Exemptions
• Agency purchases are exempt from state
sales tax
• Texas sales and use tax exemption
certification required
• Sales tax not reimbursable
• Agency may short pay invoice
• Employee responsible for correcting with vendor
• Travel using agency funds qualify for Texas
hotel occupancy tax exemption certificate
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Determination of Funds
External Support Groups
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Stakeholder Accountability Expectations
External Support Group Funds
Contracts, Grants and User Fees:
• Cash Management Practices
• Support Group controlled
• Support Group accountable
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Key Elements of Best Practices
Support funds generally are:
• user fees
• sales and registration fees
• personal and corporate contributions
• grants/contracts
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Key Elements of Best Practices
External support group funds are…
• Not the property of Extension
• Not controlled by the agency or its
employees
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Best Management Practices
External Support Groups
• An external committee/group determines:
• what proposals are signed and submitted on
behalf of the external entity.
• may not propose or commit Extension
resources or personnel without prior approval
by:
• Extension educator
• Immediate supervisor
• AgriLife Contracts and Grants office
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Best Management Practices
External Support Groups
Where Extension staff have access to grant
funds received by another entity e.g.,
• county
• foundation
• local 501(c)(3) group
• support group
. . . access to fund should be outlined in writing
with allowable expenditures clearly defined.
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Best Management Practices
External Support Groups
• Support funds may be held by nonprofit status
organizations, i.e.:
• 4-H Council
• 4-H Volunteer Leaders Associations
• Master Gardeners Associations
• Extension Program Council
• Extension Program Area Committees
• Legal ownership of funds and property must
reside with the association/organization.
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Best Management Practices
External Support Groups
• Clarifying Extension and support group
roles will help:
• safeguard funds
• prevent misunderstandings
• protect Extension and its employees
• A written record of ownership should be
prepared with the owner and kept on file
in the Extension office.
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Best Management Practices
External Support Groups
• Extension employees may facilitate
registration and the collection of fees for
activities and competitions
• In no case will Extension employees
receipt, control or make deposits for
support group funds. Volunteers or
county support staff where necessary,
may conduct the process.
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Best Management Practices
External Support Groups
• Individuals responsible for handling
external support funds must do so in an
open, responsible and trustworthy
manner.
• Administrators, faculty, staff, club
managers, and treasurers must carry out
their respective responsibilities as defined
by the rules and guidelines for handling
finances and assets.
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Best Management Practices
External Support Groups
• Extension does have an interest in
ensuring that support groups do not
improperly use their relationship or
association with the agency when
collecting monies or receiving donations.
• Care should be taken to ensure…
• use of donated funds match the purpose
• utilized in a timely manner
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Best Management Practices
External Support Groups
• Each county Extension program area
should have a committee or task force to
direct financial resource management.
• No Extension employee will have custody,
signature authority, or online access of an
external support group bank account or
certificate of deposit.
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Best Management Practices
External Support Groups
• External Support Group Responsibilities
• Clearly define individuals in group that have
fiscal responsibility of funds.
• Identify a treasurer to maintain records of
financial transactions for the organization
• Recommend annual review of financial
records by outside group.
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Best Management Practices
External Support Groups
• Review of external support accounts helps
to ensure:
• Committee has internal controls in place
• Established by-laws
• Proper record keeping and authorizations
• Separation of duties
• Development of annual budget
• Proper tax forms filed
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Best Management Practices
External Support Groups
• All external support groups must have a
set of by-laws that include:
• Provisions for receipting and disbursing funds
• Planned disposition of external support
group assets if the group disbands
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Additional Resources
• Best Management Practices: Texas AgriLife
Extension Service Financial Resource
Management Manual
• Contact your immediate supervisor
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