FINANCE CONSIDERATIONS FOR
THE LOCAL PRESIDENT AND
REGION CHAIR
Or: Everything You Wanted to Know
About Your Fiduciary Responsibilities,
but Were Afraid to Ask
BEFORE WE BEGIN…
• This is an overview, not a “how-to”
• You don’t need to do all of the work! Just
make sure that it gets done.
• Most of this stuff is covered in more detail in
the Financial Procedures for Locals & Regions
(FPLR) manual, or other materials available
from IEA
PRE-CLASS QUIZ
1. As a dues-paying member of my local IEA
association, I want my local’s money to be
safeguarded from loss and mismanagement,
and used effectively.
TRUE _____
FALSE _____
PRE-CLASS QUIZ
2. I don’t want my local or Region to get into
trouble with the IRS or another government
agency by violating laws or regulations.
TRUE _____
FALSE _____
PRE-CLASS QUIZ
3. Who is responsible for making sure that there
are no problems with the above?
A. LOCAL/REGION TREASURER
_____
B. GOVERNING BOARD/COUNCIL _____
C. SCHOOL SUPERINTENDENT
_____
D. NO ONE, IT JUST HAPPENS
_____
PRE-CLASS QUIZ
4. Who presides over the governing
board/Council?
A. LOCAL PRES./REGION CHAIR _____
B. LOCAL/REGION TREASURER _____
C. SCHOOL MASCOT
_____
D. NO ONE, IT JUST RUNS ITSELF _____
ANSWER KEY
1.
2.
3.
4.
TRUE
TRUE
B
A
How did you do????
WHO SAYS SO?
THE ILLINOIS ATTORNEY GENERAL
SAYS…
The full membership of the governing
body is responsible for the
organization, and each member acts
at all times in an ethical manner and
in the best interest of the
organization and the public.
THE ILLINOIS ATTORNEY GENERAL
ALSO SAYS…
The governing body exercises active
oversight of the financial affairs of the
organization and sets policies to ensure
that the organization’s resources are
used appropriately in furtherance of the
organization’s mission.
THE A.G. SAYS THAT OUR
BOARD/COUNCIL MEMBERS SHOULD…
•Become familiar with all financial matters.
•Regularly request financial information and
review all annual reports and audits of the
organization’s financial affairs.
• Each board member should be sure to review
and keep copies of the returns filed with the
Internal Revenue Service.
THE A.G. ALSO SAYS THAT OUR
BOARD/COUNCIL MEMBERS SHOULD…
• Assure compliance with applicable local, state and
federal laws, including timely filing of reports and
meeting procedures.
•Provide for regular meetings of the board and its
committees with adequate reports on – and
discussion of – organizational activities.
•Ensure financial resources to conduct
organizational activities.
THE A.G. SAYS MORE - OUR
BOARD/COUNCIL MEMBERS SHOULD…
•Provide sound investment and management of
organizational funds and assets ….to yield a
reasonable return without undue risk.
•Protect the organization’s property, including
reasonable provision for safekeeping….
RESPONSIBILITIES…
NOTE: Delegating all of this to the
Treasurer does NOT mean that you
have fulfilled your responsibilities!
SAFEGUARDING VS. MANAGING
• Safeguarding: Keep funds from being stolen,
lost, or not collected in the first place
• Managing: Funds used for the benefit of
members
– Discussion/Prioritization
– Not wasted on fines, fees and penalties
– No private benefit/conflict of interest
THIS CLASS WILL COVER:
•
•
•
•
•
•
•
•
Controls over member dues (Safeguarding)
Theft controls (Safeguarding)
Other loss controls (Safeguarding)
Bookkeeping/Financial reports (Managing)
Budget (Managing)
Government regulations (Both)
Atmosphere of honesty/integrity (Both)
Personnel considerations (Both)
CLASS FORMAT
• Don’t hesitate to speak up at any time
– Questions
– Examples
– Bring us back to reality
QUESTIONS?
CONTROLS
Controls are procedures and
organizational structure designed to help
protect (safeguard and/or manage) your
organization’s assets…
EXAMPLES OF CONTROL OBJECTIVES
• Fraud deterrence and detection
• Prevention of unintentional errors
• Ensure that dues income is collected and
deposited
• Funds not wasted or spent inappropriately
• Funds not spent on fines, fees and penalties
CONTROLS: OTHER BENEFITS
• Protect officers/Board members from
embarrassment and liability
• Protect the credibility of the Treasurer
CONTROLS OVER MEMBER DUES
• Local dues probably account for 90-100% of
your income
• You are responsible for collecting and
remitting IEA-NEA dues, and FCPE
• Region rebate: probably 100% of Region’s
income
DUES COLLECTION/REMITTANCE
OBJECTIVES OF CONTROL
PROCEDURES (LOCALS)
• IEA membership roster always current
• Payment of dues for leaders is handled correctly
• Accuracy of withholding is verified every pay
period
• All dues are remitted, and deposited intact
• Payments to IEA conform to schedule and
amounts are correct
• All dues and FCPE have been paid at the end of
the membership year
WHEN CONTROLS ARE NOT THERE…
• Dues withheld are not enough to cover the
IEA-NEA obligation
• Payment of dues for leaders exceeds the total
amount of local dues income
• Treasurer deducts cash when depositing dues
checks
• Late payment penalties/Scrutiny from IEA
• RA delegates not seated
“MACRO APPROACH”
 Dues/FCPE obligation (IEA statement): $10,000
 Local dues to be collected:
+1,000
 Dues paid on behalf of President:
– 500
 Total to be collected:
$10,500
 Pay periods withheld :
 10
Each check should be approximately
$ 1,050
“YTD MACRO APPROACH”
Total to be collected:
Year to date payments received:
$10,500
-3,500
Remaining payments to be received: $ 7,000
Payments remaining:
 7
Next check should be approximately:
$ 1,000
“MICRO APPROACH”
Maintain a spreadsheet listing dues info for all
members
Update the sheet every time someone
joins/leaves
Reconcile spreadsheet to IEA statement
monthly
Reconcile spreadsheet to dues deduction list
every pay period
QUESTIONS?
REGION REBATE BASICS
•
•
•
•
•
•
•
•
Computation- FTEs X Budgeted rebate amount
FTE vs. Member
“Bylaw amendment”
Laptop computer charge
Carryover of funds
Availability of funds
In-region funds
Preliminary vs. final rebate
REBATE BASICS
• Prior year financial report
• Board Policy 15
BYLAW AMENDMENT
•
•
•
•
•
Your region has 2,000 members, all FT ESPs
So you have 1,000 FTEs
Ratio of FTEs/Members= .50
FTE amount= $20
Rebate before amendment= $20,000
($20 x 1,000)
• Rebate after amendment= $34,000
(85% x 2,000 x $20)
REBATE INFO
6/16/2015
2014-2015 Regional Rebate
REGION
99
REGIONAL REBATE
Active Full-Time Equivalent Members
1341
Budgeted Regional Dues Rebate per FTE:
$17.80
CURRENT YEAR REBATE:
INCREASE DUE TO 2008 IEA BYLAW AMENDMENT:
PRIOR YEAR BALANCE:
$23,869.80
$2,048.00
$7,521.82
TOTAL REBATE:
$33,439.62
REBATE INFO
Direct Deposits:
ACH #
025418
025997
026011
DATE
2/11/2015
4/8/2015
4/14/2015
AMOUNT
4,000.00
11,000.00
4,000.00
TOTAL REBATE PAID:
$19,000.00
REBATE BALANCE:
$14,439.62
REBATE INFO
IN-REGION FUNDS
CURRENT YEAR:
Laptop
PRIOR YEAR BALANCE:
TOTAL FUNDS:
Direct Deposits:
ACH #
DATE
$1,400.00
($300.00)
$3,300.00
$4,400.00
AMOUNT
TOTAL PAID
CURRENT BALANCE:
$0.00
$4,400.00
REGION CONSIDERATIONS
• Make sure you have procedures in place to
verify all of the numbers and transactions
• Understand the concepts and rules regarding
the region budget
• Don’t ask for funds if you don’t need them
QUESTIONS?
THEFT CONTROLS
•
•
•
•
“That could never happen here”
“We all trust each other”
“No one would know how to steal from us”
“If I insist on having controls, my Treasurer will quit”
If you believe these myths, you risk eventually
pulling your head from the sand and finding all of
your region/local funds gone, and members
asking “How did you let that happen?”
YOU NEED THEFT CONTROLS
BECAUSE…
•
•
•
•
People steal when they need money
People steal when you just make it too easy
People steal when they can rationalize it
Occasionally, someone who is just plain
dishonest gets into a position of responsibility
• Worst case: Combination of the above!
• Even if your officers are 100% honest, how
about the next group? Or the next?
THE “FRAUD TRIANGLE”
“TOP 5” THEFT CONTROLS
5.
4.
3.
2.
No debit or credit cards
Annual audit
Two signatures on checks
No checks written to “cash;”
No dealing in cash
1. Have the bank statement(s) mailed to
someone besides the Treasurer
PREVENTION/MITIGATION OF CASH
DEDUCTED FROM DEPOSITS
• Instruct the bank (in writing): No cash
withdrawals of any kind
• Electronic transfer of employer dues payments
• Make sure the annual audit addresses cash
withdrawals
• Have your employer deduct IEA-NEA dues
separately and forward directly to Springfield
(NOTE: You’re still responsible for correct
payment!)
IF YOU INSIST ON HAVING A CREDIT
CARD…
• One person has custody
• Statements go to someone who does not have
custody
• Email alerts for all expenditures
• Documentation: Credit card slips with
signatures; details
• DO NOT PAY BILL BASED SOLELY ON MONTHLY
STATEMENT!
BENEFITS: ANNUAL AUDIT
• Helps ensure compliance with bookkeeping
and filing requirements
• Helps ensure compliance with internal
requirements
• Fraud deterrence/detection/collusion
• Credibility with members
• Identify control deficiencies
SPECTRUM: AUDIT OPTIONS
• Internal committee
• Outside CPA
– “Agreed-Upon Procedures”
– “Review”
– “Audit”
• Regions will always use an internal committee
AUDIT OPTIONS
See IEA website for additional
information on how to make this
determination
www.ieanea.org
WHICH IS RIGHT FOR YOU?
• Size/Dues obligation
• “Complexity”
– History of questionable integrity
– Chronic lateness in paying IEA-NEA dues
– Files IRS Form 990 or 990-EZ
– Politically active/Files D-2s
– High local dues/Numerous local activities
– Sends several delegates to RAs
RIGHT FOR YOU (Continued)
• Uses debit or credit cards, or deals in cash
• Compensation paid to leaders
• Recent involvement with regulatory groups,
e.g. IRS
• Numerous bank accounts
• Donations solicited (e.g. scholarships)
• Poor working relationship with employer
• Employer bookkeeper is incompetent
INTERNAL COMMITTEES
• Do not include officers, ESPECIALLY the
Treasurer
• Consider the Treasurer of a nearby
local/region
• Give the Committee a specific “game plan”
• Written report by Committee (share if useful)
• Start small/Keep adding
OUTSIDE CPAs
• Constraints: Professional Standards
• Required documentation
– “Representation letter”
– “Engagement letter”
•
•
•
•
Understand what they will (and won’t) do
Understand what they take responsibility for
Payment amount/Timing
Assistance with selection
AN AUDIT IS NOT THE ONLY CONTROL
THAT YOU NEED!
• Except for very small locals, the audit
can’t scrutinize every single
transaction
• People can be ingenious!
• An audit is important, but don’t let it
give you a false sense of security
QUESTIONS?
OTHER LOSS CONTROLS
•
•
•
•
•
•
Banking: Maximize interest/Minimize fees
Deposit checks when received
Written reimbursement policy for all travelers
Authorize bank accounts and signers annually
Bank reconciliation
Check mathematical accuracy of bills and
reimbursement requests
“SIGNS OF FRAUD”
• See the FPLR manual
• If you see them, what do they mean?
– Fraud is not necessarily taking place, but the
opportunity is present
– You need to take action (don’t ignore the signs)
– Don’t jump to conclusions
– Don’t accuse anyone
– Talk to your UD
“TOP 5” SIGNS OF FRAUD
5. Organization always seems to be short of
cash and/or late in paying IEA-NEA dues
4. Poor documentation/No documentation
3. Excessive dealing in cash
2. Treasurer won’t provide access to records
1. No oversight by governing body
POP QUIZ #1
1. Which of the following is NOT an important
component of controlling the member dues
collection/payment process?
a. Your IEA membership roster is kept current at all
times
b. Your employer is remitting the correct amount of
dues to you every pay period
c. Your local is paying its required obligation to IEA per
the quarterly dues payment schedule
d. All payments from your employer are deposited
intact, i.e. no cash deductions are made
POP QUIZ #1
2. It’s June, all of the member dues deductions for
the year have been made, and your local does
not have enough money in the bank to pay its
last IEA-NEA dues payment. What is a possible
cause of this situation?
a. The employer agreed to deduct dues over 16 pay
periods but only deducted them for 14
b. Your Treasurer made some unauthorized cash
withdrawals when depositing the dues checks
c. The employer did not deduct dues for five new
members
d. All of the above
POP QUIZ #1
3. Which side of the “Fraud Triangle” is most
under your control?
a.
b.
c.
d.
Opportunity
Rationalization
Pressure
Cash flow
POP QUIZ #1
4. Which of these is NOT one of the “Top 5 Theft
Controls”?
a. Have monthly bank statements mailed to
someone besides the Treasurer
b. Have an annual audit
c. Have a budget
d. Do not allow cash transactions
ANSWER KEY
1.
2.
3.
4.
C
D
A
C
Questions??
BOOKKEEPING
Every dime that goes in and out of your bank
account(s) needs to be recorded, and
documentation needs to be kept on file to:
– Support your financial reports
– Retain data in case of audit
– Support operations
• Bills not paid twice
• Quick information retrieval in case of questions
BANKING ISSUES
• Taxpayer ID number
• Board awareness: Accounts/Signers
• GET COPIES OF CANCELLED CHECKS!
NEED FOR FINANCIAL REPORTS
•
•
•
•
Keep the Board/Council informed
Regions: Part of annual budget process
Monitor spending
Using your members’ money:
Decision-making and prioritization
• IRS/DOL reporting for some locals
• Member credibility/Rumor control
BASIC COMPONENTS
•
•
•
•
•
Cash on hand - Beginning and current
Categorization of income and expense
Actual vs. budget
Actual vs. prior year
All bank accounts should be included
CATEGORIZATION OF EXPENSES
• Functional
– Board meetings
– RA delegates
– Newsletter/Website
– Bargaining
– Member representation
CATEGORIZATION OF EXPENSES
• Nature
– Meals
– Printing
– Travel
– Stipends
– Office supplies
CATEGORIZATION OF EXPENSES
• Hierarchical combination (see region budget format)
– Board meetings
• Meals
• Supplies
– RA delegates
• Hotel
• Mileage
OTHER CONSIDERATIONS
• Frequency
• What do you show your members?
• Test the accuracy as part of the
annual audit
QUESTIONS?
WHY SHOULD WE HAVE A BUDGET?
•
•
•
•
Financial planning
Avert preventable financial disasters
Prevent arguments over spending
IEA reimbursement of mediation/arbitration costs
– Dues: $15/member
– Budget: $3 per member budgeted for specific
categories
• Member satisfaction
• Regions: It’s an IEA requirement!
RESOURCES
•
•
•
•
•
•
FPLR manual
Video
Other material on IEA website
Spreadsheet template
Your UD/Local office
Other locals/regions
REGION BUDGET SPREADSHEET
• Important components
– Instructions/Suggested process
– Guidelines/Suggestions
– Checklist
– Account tracking
POP QUIZ #2
1. Which of these is NOT a good reason to have
monthly financial reports for your local?
a. It’s part of your Treasurer’s job description
b. They keep your governing body informed about
your local’s financial status
c. They are helpful in making choices about how to
spend your money
d. They help to squelch rumors about your local’s
finances
POP QUIZ #2
2. What was recommended as a way to test the
accuracy of the monthly financial reports?
a. Have the Board compare the reports to the bank
statements
b. Have them tested as part of your annual audit
c. Have good controls
d. Verify that the addition is correct in all columns
POP QUIZ #2
3. To automatically qualify for IEA financial
assistance for mediation, factfinding and
arbitration, your local dues must be AT LEAST:
a.
b.
c.
d.
$10
$15
$20
$25
POP QUIZ #2
4. Which of the following was listed as a reason
for a local to have a budget?
a.
b.
c.
d.
The IEA has a budget, you should have one also
It’s required by the IEA Bylaws
Having a budget ensures financial success
It is useful when planning financial initiatives
such as building up a crisis fund
ANSWER KEY
1.
2.
3.
4.
A
B
B
D
Any surprises??
GOVERNMENT REGULATIONS:
LOCALS VS. REGIONS
• Locals are considered as related to, but
separate from, the IEA
• Regions are technically part of the IEA
• Both are tax-exempt for the same reason,
so many rules apply to both
IRS TAX EXEMPTION
(LOCALS AND REGIONS)
• Classification: Labor union- Section 501(c)(5)
– State sales tax
– Contributions received
– Purpose is to benefit members
• IRS determination letter/Articles of
incorporation
• “Nonprofit” vs. “No profit”
• Taxpayer ID number (When in doubt, IEA has
your number on file)
INTERACTIONS WITH THE IRS
• Written “notices”
–
–
–
–
Don’t ignore! Respond per deadlines
Verify taxpayer ID number
Keep copies
Seek help!
• Audit
– Seek help!
– Seek help!
– Seek help!
• Annual returns
WHICH RETURN DO I FILE?
• Regions: No filing requirement
• Locals: Depends on your “average annual
gross receipts”
• AAGR does NOT include the IEA-NEA dues that
you collect and forward to Springfield
• < $50,000: 990-N (“E-Postcard”)
• $50,000- $200,000: 990-EZ
• $200,000+: 990 (or assets > $500,000)
WHO FILES WHAT?
•
•
•
•
900+ IEA locals file the e-postcard
IEA files on behalf of all but a handful of these
About 30 locals file the 990 or 990-EZ
For the latter, we strongly advise that you
engage a CPA to prepare and file the return
• You need to be aware of the filing thresholds,
to make sure you are filing the correct return
990/990-EZ ISSUES
• IRS code section
• Three “programs”
• Compensation
– Reporting
– Employer reimbursements
• General appearance/Mathematical
Accuracy/Spelling
• REMEMBER: This is a public document!
QUESTIONS?
IRS BOOKKEEPING RULES
• All financial transactions: Obtain
documentation and keep on file:
– Date/dollar amount
– Business purpose
– Payee/Source of funds
• Actual receipts, not just a note asking for
reimbursement
• Mileage: Start/End points
COMPENSATION PAID TO
LEADERS/OTHER MEMBERS
• “Compensation”- Payment for services rendered
• “Reimbursement”- Payment for business
expenses incurred
• “Compensation” is taxable
“Reimbursement” (if properly documented)
is not taxable
• Payment of dues on behalf of someone
IS “Compensation” and thus taxable
HOW IS COMPENSATION REPORTED?
• Employee vs. independent contractor
(sometimes gray area)
• Employee: All compensation, regardless of
amount, reported on W-2
• Due to complexity of withholding/filing
requirements, we strongly suggest that you
get outside help with employee
bookkeeping/filing
EMPLOYEE VS. INDEPENDENT
CONTRACTOR
• Dollar amount
• Officer vs. non-officer
• Payment
– Frequency
– Hourly, annual, etc.
• Control over actions
• About 15 other criteria
INDEPENDENT CONTRACTOR
(MEMBERS)
• Stipends/Payment of dues
• Payment for work performed, e.g. setup of
website
• Total annual compensation < $600- No
reporting requirement
• $600 or more; Must report on Form 1099MISC
• Be aware of deadlines and rules
“TAXABLE” VS. “REPORTABLE”
For independent contractors:
– ALL compensation is taxable, i.e. must be
reported on their tax return
– ONLY compensation of $600 or more in a calendar
year is reportable by you
– Exception: Reporting payments less than $600 in
case of theft/not providing documentation for
expenses
– Do NOT tell people that compensation less than
$600 is nontaxable. It’s just nonreportable.
INDEPENDENT CONTRACTOR
(NON-MEMBERS)
• Same basic rules as for members
• Reporting requirements apply only to payments
to individuals, not corporations or partnerships
• You need their taxpayer ID number in order to
report them. If you pay someone $1,000 to fix
your website, you should ask for their Social
Security number before the job is complete. This
will also give them fair warning that the payment
will be reported.
GIFT CARDS
• The IRS considers gift cards as being the same
as payments of cash, and like payments of
cash, there is no “de minimis” threshold.
Virtually all payments are taxable!
• Locals: This is not a big deal unless:
– You give a card to someone who gets a W-2 from
your local
– The amount of the card, in conjunction with other
compensation, brings the annual compensation of
someone up to the 1099 threshold ($600)
EXAMPLES
• You pay your President $3,000 per year and
report this on a W-2. If you give him/her a $50
gift card, you need to report $3,050 as income
on the W-2
• You pay $580 of your Treasurer’s dues. This is
not reportable, but if you also give him/her a
$50 gift card, the compensation is now $630
and IS reportable
ADDITIONAL CONSIDERATION FOR
REGIONS
• Since regions are technically part of IEA, then
gift cards given to IEA employees become very
problematic.
• Due to the reporting requirements, regions
should NOT give gift cards to IEA employees
• IEA employees include:
– GPAs
– Interns
– MVCs
GIFT CARDS: CONCLUSIONS
• If at all possible, refrain from giving gift cards
• Be aware of the possible reporting
requirements
• For all gift cards, keep a record of the date,
amount, payee, and business purpose
• Regions should absolutely not give gift cards
to IEA employees
QUESTIONS?
CONTRIBUTIONS TO POLITICAL
CANDIDATES (LOCALS)
• Contributions should go to local candidates,
i.e. school board
• Don’t contribute to state candidates
• Make contributions out of IPACE rebate
money, not local dues
• Keep your investment income under
$100/year to avoid tax issues
MEMBER IPACE CONTRIBUTIONS
• All members pay $30/year, along with their
dues
• Payment is not optional, and your local is
responsible for collection
• Members can get a refund of their $30; they
have to contact Government Relations
IPACE REBATES
Your local is entitled to a rebate of IPACE
contributions from your members
– 20% ($6/contributing member)
– 50% ($15/contributing member)
– Additional funds available in special
circumstances
– “Contributing Member” means those who did
not request a refund of their contribution
REBATES: YOUR RESPONSIBILITIES
• Keep IPACE funds in a separate, non-interest
bearing account
– Only deposits: Funds from IPACE
– Only payments: Legitimate political expenditures
• Know what IPACE funds can be spent for, and
what they cannot
• Keep good records
• Know your State reporting requirements
STATE REPORTING REQUIREMENTS
• Illinois State Board of Elections requires you to
register as a PAC immediately, if you meet the
filing criteria
• Criteria: Spend $5,000 or more in ANY 12MONTH PERIOD on:
– Supporting/Opposing political candidates
– Supporting/Opposing an issue on the ballot, e.g.
referendum
– “Electioneering Communications” (exception:
member-to-member communication)
IF YOU ARE REQUIRED TO REGISTER…
•
•
•
•
•
Do so (Form D-1) within timeframes
Amend your D-1 any time info changes
File quarterly D-2
File other forms when you meet the criteria
Filing requirements are ongoing forever,
regardless of your level of activity in any given
quarter
MAKE SURE YOU COMPLY
• Monitor expenditures on an ongoing basis
– Cumulative dollar amount
– Type
• Avoid crossing the threshold if you can
• Register if you must
• Don’t forget to file D-2’s: Substantial fines for
being late (even one day)
QUESTIONS?
FUND FOR CHILDREN AND
PUBLIC EDUCATION (FCPE)
• NEA PAC (equivalent of IPACE)
• Contributions to FCPE cannot be made out of
local dues money (consideration at NEA RA
time)
• “Hard” vs. “soft” money
• Rules for solicitation
SOLICITATION OF FUNDS FOR
“CHARITABLE PURPOSES”
• Scholarships, tornado relief, etc.
• State registration/filing requirements
– $4,000 in “charitable assets” OR
– $15,000 in income (any 12-month period)
• Must register with state, pay fees, file annual
reports
• Avoidance:
– Stay under thresholds
– Work with an existing charitable organization and
have funds flow through it
IRS CONSIDERATIONS
• Regions should not solicit funds for charitable
purposes (part of IEA)
• Any contributions made to your local/region
for charitable purposes is NOT tax-deductible
• If you solicit funds in writing/electronically,
the solicitation must include a statement to
this effect, that meets IRS guidelines
“PRIVATE SECTOR” LOCALS
• Employer is not a government entity
• Must register with U.S. Department of Labor
as soon as local is formed
• Initial/annual filing requirements;
bookkeeping issues
POP QUIZ #3
1. Your local/region is regarded by the IRS as
what type of tax-exempt organization:
a.
b.
c.
d.
501(c)(3) Public charity
501(c)(5) Labor union
501(c)(6) Business league
Fraternal Beneficiary Association
POP QUIZ #3
2. Nearly all IEA locals file which of the following
annual returns?
a.
b.
c.
d.
990
990-EZ
990-N
No return required
POP QUIZ #3
3. Which of the following payments to a local
President/Region Chair would require filing a
1099-MISC?
a. Advance of $1,000 for the purpose of attending
the RA
b. Payment of his/her IEA-NEA dues in the amount
of $400
c. Reimbursement of travel and business expenses
in the amount of $800
d. Payment of a $750 stipend as compensation
POP QUIZ #3
4. Which of the following is NOT true?
a. As tax-exempt organizations, IEA locals and regions
are not required to pay Illinois sales tax
b. You may spend IPACE funds to purchase yard signs
for school board candidates
c. You should not solicit funds for the NEA’s Fund for
Children and Public Education from non-member
school employees
d. If you pay a member a large salary, you may be
required to withhold payroll taxes and file form W-2
at the end of the year
ANSWER KEY
1.
2.
3.
4.
B
C
D
A
Questions?
ATMOSPHERE AND ENVIRONMENT
• General reputation of labor unions
• Solution:
–
–
–
–
–
–
Transparency
Follow rules
Implement and enforce controls
Avoid conflicts of interest
Provide avenues for addressing questions/concerns
Don’t let expediency cause you to do the wrong thing
PERSONNEL
Selection of honest/qualified candidates
– Job descriptions
– Qualification requirements
– Avoid those who have demonstrated bad behavior
TRAINING AND DEVELOPMENT
Make sure funds are available and leaders
understand expectations:
– IEA trainings/website resources
– Local IEA office
– Outside organizations
– Structured meetings of peers
SUCCESSION PLANNING
• Your successor
• Selection of next Treasurer
• Treasurer transition
– Written expectations
– Job shadowing
– Calendars/Procedure manuals
– Documentation, filing, etc. up to date
LAST RESORT…
• Mechanism for removing someone from office
– Won’t do work
– Can’t do work
– Bad behavior- theft, etc.
• Just, fair, impartial process
• Governing documents
• Work with your UD
POP QUIZ #4
1. Which of the following was NOT suggested as
a way to maintain a good public image?
a. Be transparent with how you spend your
members’ money
b. Don’t allow conflicts of interest
c. Invite your members to attend all Board
meetings
d. Make sure that your leaders know that they are
free to express concerns
POP QUIZ #4
2. What was one suggestion to promote a
healthy and honest work environment within
your local?
a. Support your Treasurer in enforcing your local’s
rules regarding payment approvals,
documentation, etc.
b. Make it clear that you expect results
c. Require background checks for anyone who
handles money
d. Have a good whistleblower policy
POP QUIZ #4
3. What was cited as a way to ensure a smooth
transition of Treasurers?
a. Personally train the new Treasurer
b. Make sure that you have up-to-date calendars of
important dates
c. Require a “job shadowing” period of at least six
months
d. Require the new Treasurer to pass a test prior to
assuming his/her duties
POP QUIZ #4
4. What was NOT suggested as a way to make it
more likely that you will have honest and
competent colleagues as local leaders?
a. Have an impartial and fair method of removing
leaders who are demonstrably dishonest
b. Make sure that leadership positions are filled by
people that you have known for a long time
c. Implement screening mechanisms such as job
descriptions and required qualifications.
d. Encourage training and development
ANSWER KEY
1.
2.
3.
4.
C
A
B
B
Comments? Questions?
CONCLUSION
• Your local/region is a business and has to be run
as one
• This includes procedures/controls to ensure that
your members’ funds are used appropriately
• Overall responsibility: Governing body
• Your role:
– Make sure it happens
– Don’t do all the work yourself
– Try to surround yourself with capable, honest people
RESOURCES
•
•
•
•
•
•
Local IEA office
IEA Secretary-Treasurer
IEA Business Services Department
IEA Government Relations Department
IEA website
Peers
FINAL QUIZ/BRIEF TOUR OF WEBSITE