Financial Accountability
Update & Review
Ingham County 4-H Clubs
August 19, 2008
Why practice financial
accountability in 4-H clubs???
• Ensures public accountability for funds raised in
the name of 4-H
• IRS requirements have increased reporting
requirements for non-profit groups including 4-H
• Use of appropriate financial management practices
by 4-H clubs and groups is an important learning
experience for 4-H members
Background for MSU Extension
Accountability Policy
• In 2000, MSUE experienced several
potential embezzlements by volunteers
in MSUE programs. As a result of this
experience and the subsequent
investigation, a Financial
Accountability Policy was developed
for MSU Extension Offices.
• In 2006, new IRS policies required
more extensive reporting by non-profit
groups & Pension Protection Act of
2006 also added new reporting
requirements.
MSU Extension Financial
Guidelines
• A policy was adopted for all MSUE Offices in
May, 2003 to be in place by December, 2003. This
policy was revised in 2007. In order for offices to
comply with the policy, all MSUE sponsored
groups will need to provide documentation of
activity.
• 4-H clubs and groups (councils, boards and
committees) are the largest segment of sponsored
groups for MSUE.
Record Keeping
• Good record keeping is the key to effective
internal controls
• Records should include: cash received, where
money came from, and payments made
• Club should keep running total of assets using
check register or “Record of Club Finances” from
the Treasurer’s Book
• Keep records for at least 5 years in case of an
audit
Treasurer’s book
• Reproducible documents for club financial
reporting
• Detailed guidelines and instructions for
club treasurer & leaders
EIN & Bank accounts
• All groups are now required to have an EIN,
regardless of whether or not they maintain a
treasury. This number must be provided to the
county Extension Office.
• If you maintain a treasury, you must also report
this number to the bank.
• Club accounts should have at least 3 signatories:
treasurer & 2 unrelated adult leaders
Clubs with multiple bank accounts
• Combined total determines if > $2500
• Submit bank statements from all accounts
• Reports
– All combined into 1 report
– Individual report for each separate account
IRS Form 990, e-postcard
• All 4-H clubs and groups are now
required to file an IRS 990 epostcard if they do not have more
than $25,000 in gross income.
County Extension offices are
responsible for filing this
document with the IRS annually.
• Groups with more than $25,000 in
gross income for 3 consecutive
years must file IRS Form 990.
Creating a club budget
• A written plan to raise and spend money for 1 year.
• The members of the club/group approve the budget at the
beginning of the year. A budget allows clubs to approve
payment of items included in the budget.
• If the club/group does not have a budget, or items arise that
are not a part of the budget, each item must be presented to
members for approval before payment is made.
• An annual budget accomplishes two things.
– All expenditures of club funds are made with full approval of the
club/group.
– It is a great way for members to learn how money flows in and out
of an organization.
Receiving Funds
• A pre-numbered, carbon copy receipt
should be written for all money received
and become part of the club’s records
• Receipts for dues & project fees
• Receipts for fundraisers
• Non-cash donations should also be
acknowledged in writing
• Deposit all funds promptly
Membership fees form
• A record of all fees paid by members
throughout the year.
• A receipt should be written for each date fees
are collected
• Individual receipts not necessary when using
membership fee form
2008-2009 Membership Fees Record
4-H Club:
Record the amount and date paid under each column. Identify each project column (ex. Project 1 shooting sports, Project 2 cooking). Add
additional project columns as needed.
4-H Member's Name
Participation Fee
Club dues paid Fair fees paid Project Fee Paid
Project Fee Paid
Project Fee paid
Paying bills
• Any payments should be made in response
to a formal written bill or invoice.
• A request for payment form should be used
for non-budgeted items.
• A payment voucher, including an itemized
invoice or receipt clearly stating what was
billed, with the check number and date of
the check on it should be maintained as a
permanent part of the treasurer’s records.
• Clubs without a checking account should
purchase checks or money orders from the
bank to use in paying bills and making
reimbursements—never use cash
Monthly Treasurer’s Report
• Informs members of the group’s financial activity for
the past month.
• Must be presented to the group during monthly
meeting.
• Club votes to receive the treasurer’s report and place
on file for audit after it is reviewed and verified that it
is reconciled with the monthly bank statement.
• Next month’s bills presented for approval
• A copy is filed with the secretary minutes, the original
is filed with the treasurer’s permanent records.
Meeting minutes
• 4-H clubs should meet 6 or more times
during the 4-H year.
• Minutes record the proceedings of the club
business.
• ALL financial transactions should be
recorded in the meeting minutes.
Bank statements
• If your club fundraises more than $2500
OR maintains a bank balance of more than
$2500 per year all bank statements must be
sent directly to the county extension office.
• Clubs with less than $2500 should attach a
copy to monthly treasurer’s report.
Club reporting checklist
4-H Club Checklist for Accountability
4-H Club Year September 2008-August 2009
• Record for clubs to
track reports
submitted
• Clubs over $2500
required to submit
monthly
• Clubs under $2500
highly encouraged
to submit monthly
This checklist is a tool for 4-H clubs to keep track of records submitted to the County Extension office. Each time you submit a report to the County Extension
office record the date submitted on this record. All 4-H clubs and entities are responsible for reporting their financial records to the County Extension office. 4H clubs with multiple bank accounts should submit reports that include bank statements from each account (savings, checking, money market, etc.). Cirlce the
type(s) of bank statements submitted each month. If you club does not hold a meeting during the month indicate on the form "no meeting". Failure to submit
required documentation may lead to suspension of club privleges including use of the 4-H name and emblem.
Club Inventory Record 2007-08
Annual Financial Report 2007-08
Audit Form 2007-08
Club Budget for 2008-09
September
Bank Statement Savings
Treasurer's Report
Meeting Minutes
October
Bank Statement Savings
Treasurer's Report
Meeting Minutes
November
Bank Statement Savings
Treasurer's Report
Meeting Minutes
December
Bank Statement Savings
Treasurer's Report
Meeting Minutes
January
Bank Statement Savings
Treasurer's Report
Meeting Minutes
February
Bank Statement Savings
Treasurer's Report
Meeting Minutes
March
Bank Statement Savings
Treasurer's Report
Meeting Minutes
Checking CD
April
Bank Statement Savings
Treasurer's Report
Meeting Minutes
Checking CD
May
Bank Statement Savings
Treasurer's Report
Meeting Minutes
Checking CD
June
Bank Statement Savings
Treasurer's Report
Meeting Minutes
Checking CD
July
Bank Statement Savings
Treasurer's Report
Meeting Minutes
Checking CD
August
Bank Statement Savings
Treasurer's Report
Meeting Minutes
Checking CD
Application
Fundraiser 1
Fundraiser 2
Fundraiser 3
Club Inventory Record 2008-09
Annual Financial Report 2008-09
Audit Form 2008-09
Club Budget for 2009-10
Report
Checking CD
Checking CD
Checking CD
Checking CD
Checking CD
Checking CD
Financial audit
• Prior to submitting the annual financial
report, 4-H clubs and groups need to
conduct a review of the groups financial
records and money management practices.
Club inventory record
• A running inventory of the club’s
belongings
• Must be completed by all clubs and groups
Annual Summary Financial Report
• Submit the annual financial report to the county
extension office by: October 15th
• Report covers period of 4-H year: September
1August 31
• Attach copy of beginning and ending bank
statements to report—balance should match report
• Transactions should be listed individually
• Report form as a cover sheet
– Excel program
– Quicken/Quickbooks
Fund Raising
• All fundraising activities must be approved by
MSUE staff prior to being held and include an
educational component.
• Fund raising activity reports must be submitted to
the Extension office within 10 days of the
fundraiser.
• Fundraisers should benefit the good of the total
group; all money raise using the 4-H name must
be used ONLY for 4-H activities
• 4-H clubs are discouraged from holding
fundraisers that involve games of chance
Sales tax
• Clubs sell tangible items in excess of $5000
in one year are required to pay sales tax
• Clubs may use the 4-H tax exempt number
for educational purchases for their club
• Groups owing sales tax should submit a
check to MSU Extension with your
financial summary report.
Volunteer and member roles and
responsibilities
• MSU Extension Financial Accountability
Policy depends on cooperation of countybased volunteer groups.
MSU Extension staff roles and
responsibilities
• MSUE staff are required to investigate any
questions related to the management or use
of funds by 4-H clubs and groups.
• Financial records of 4-H groups must be
turned into the Extension office for review
when requested.
Outcomes
• Following these financial management
practices demonstrates that MSUE, 4-H and
all of it’s sponsored groups are good
stewards of the funds that have been
entrusted to us by donors and supporters.
• The organization and it’s sponsored groups
are now in a stronger position to
demonstrate effective systems of financial
accountability and internal control to
potential donors/funders.
• Use of appropriate financial management
practices by 4-H clubs and groups is an
important learning experience for 4-H
members
Questions &
Discussion