ASHRAE Chapter Treasurer

Chapter

Financial Risk Management

for International Chapters

Chapter

Financial Risk Management

for International Chapters

Financial Risk Management

– Chapter Treasurer Duties

– Financial Accounting & Banking

– Chapter Annual Audits

– Revenue and Taxation Reporting

– Fiduciary Duties

– Chapter Treasurer Duties

– Financial Accounting & Banking

– Chapter Annual Audits

– Revenue and Taxation Reporting

– Fiduciary Duties

Chapter Treasurers

• Chapter Presidents: prepare balanced budgets for approval by BOG

• Treasurer shall make all deposits and issue all checks as authorized by the BOG.

• Treasurer to balance monthly statements & present to BOG for review and approval; keep records.

• Annual independent Audit Committee appointed by BOG; elect prior to annual Chapter meeting.

• Chapter Presidents: prepare balanced budgets for approval by BOG

• Treasurer shall make all deposits and issue all checks as authorized by the BOG.

• Treasurer to balance monthly statements & present to BOG for review and approval; keep records.

• Annual independent Audit Committee appointed by BOG; elect prior to annual Chapter meeting.

Chapter Treasurers (cont’d)

• Chapter account used for operations only.

• Use separate account codes for special events such as CRC Fund or Scholarships.

• Responsible to file tax returns – check with local tax authorities regarding status of non profit establishments.

• Chapter account used for operations only.

• Use separate account codes for special events such as CRC Fund or Scholarships.

• Responsible to file tax returns – check with local tax authorities regarding status of non profit establishments.

Financial Accounting and Banking

• It is recommended that each Chapter have its own copy of a reputable Financial Software.

• At least three Chapter officers should have signing authority.

• At least two signatures are required on each check (for sums of $100 and greater or suitable equivalent local currency).

• It is recommended that each Chapter have its own copy of a reputable Financial Software.

• At least three Chapter officers should have signing authority.

• At least two signatures are required on each check (for sums of $100 and greater or suitable equivalent local currency).

Financial Accountingand Banking (cont’d)

• Consider separate bank accounts for high dollar special events.

• Where possible all Research Donations should be forwarded directly to ASHRAE Research.

• All investments should be in safe low risk investments (i.e. bonds, term deposits).

• Consider separate bank accounts for high dollar special events.

• Where possible all Research Donations should be forwarded directly to ASHRAE Research.

• All investments should be in safe low risk investments (i.e. bonds, term deposits).

Chapter Financial Audits

• Set up Audit Committee made up of Past Presidents and/or senior ASHRAE members to perform annual audit.

• Larger Chapters may want to consider outside accounting firms to perform financial audits.

• Chapter Treasurers should not audit books for their year.

• Audit findings should be presented to Chapter BOG once per year.

• Set up Audit Committee made up of Past Presidents and/or senior ASHRAE members to perform annual audit.

• Larger Chapters may want to consider outside accounting firms to perform financial audits.

• Chapter Treasurers should not audit books for their year.

• Audit findings should be presented to Chapter BOG once per year.

Revenue and Taxation Reporting

• To comply all formalities with regard to filling of financial statements and tax returns with the local state tax authorities.

• Income and expenditure, receipt and payment accounts for the year, to be drawn and audited by certified audit firm.

• To comply all formalities with regard to filling of financial statements and tax returns with the local state tax authorities.

• Income and expenditure, receipt and payment accounts for the year, to be drawn and audited by certified audit firm.

Revenue and Taxation Reporting

• Your tax filing is due every year by the end of the __ th day of the __th month after the close of your year end.

• For most Chapters the year ends on June 30 but the Tax Filing must be completed by ___ (check with local tax office if not known).

• You cannot file until after your tax year ends.

• Your tax filing is due every year by the end of the __ th day of the __th month after the close of your year end.

• For most Chapters the year ends on June 30 but the Tax Filing must be completed by ___ (check with local tax office if not known).

• You cannot file until after your tax year ends.

Information Needed To File

• Employee Identification Number (EIN) or alternatively Taxpayer Identification Number (TIN).

• Tax Year.• Legal name. (ASHRAE Chapter Chartered

name)• Mailing address.• Alternative name organization uses.• Name and address of principal officer.

(Chapter President)• Confirmation of annual gross receipts.

• Employee Identification Number (EIN) or alternatively Taxpayer Identification Number (TIN).

• Tax Year.• Legal name. (ASHRAE Chapter Chartered

name)• Mailing address.• Alternative name organization uses.• Name and address of principal officer.

(Chapter President)• Confirmation of annual gross receipts.

Late Filing or Failure to File

• Chapters who fail to file tax returns risk local fines & loosing non-profit status.

• They also would jeopardize the Society’s Tax Exempt Status

• The Society could dissolve the chapter

• Chapters who fail to file tax returns risk local fines & loosing non-profit status.

• They also would jeopardize the Society’s Tax Exempt Status

• The Society could dissolve the chapter

UNDERSTANDINGFIDUCIARY DUTIES

• As a Chapter Officer you have a Fiduciary duty to your ASHRAE Chapter.

• The Law.com - Dictionary defines a fiduciary as a person who has the power and obligation to act for another…under circumstances which require total trust, good faith and honesty.

• As a Chapter Officer you have a Fiduciary duty to your ASHRAE Chapter.

• The Law.com - Dictionary defines a fiduciary as a person who has the power and obligation to act for another…under circumstances which require total trust, good faith and honesty.

Fiduciary Primary Duties

A Fiduciary has three primary duties:• Duty of Care• Duty of Loyalty• Duty of Obedience

A Fiduciary has three primary duties:• Duty of Care• Duty of Loyalty• Duty of Obedience

Duty of Care

• Board members must exercise reasonable care in overseeing the organizations financial and operational activities.

• Board members must exercise reasonable care in overseeing the organizations financial and operational activities.

Duty of Loyalty

• Board members must act solely in the best interests of the organization and its constituents, and not for personal gain.

• Board members must act solely in the best interests of the organization and its constituents, and not for personal gain.

Duty of Obedience

• Board members must act in accordance with the organization’s mission, charter and bylaws, and any applicable state of federal laws.

• Board members who violate these duties may be held personally liable for any financial harm the organization suffers as a result.

• Board members must act in accordance with the organization’s mission, charter and bylaws, and any applicable state of federal laws.

• Board members who violate these duties may be held personally liable for any financial harm the organization suffers as a result.

Avoiding Conflicts of Interest

• One of the most important components of the duty of loyalty is the obligation to avoid conflicts of interests.

• Step aside or abstain from voting when ever there is an appearance of a conflict of interest.

• Please review the ASHRAE Codes of Ethics. http://www.ashrae.org/publications/detail/14686

• One of the most important components of the duty of loyalty is the obligation to avoid conflicts of interests.

• Step aside or abstain from voting when ever there is an appearance of a conflict of interest.

• Please review the ASHRAE Codes of Ethics. http://www.ashrae.org/publications/detail/14686

Can a Volunteer be Liable?

• A common misconception is that volunteers are shielded from liability. In fact, though they do enjoy some protection from financial responsibility, that protection isn’t absolute.

• ASHRAE Security & Privacy Policy does not apply to sites of any ASHRAE chapter, region, student branch, technical committee or other group affiliated or associated with the Society.

• A common misconception is that volunteers are shielded from liability. In fact, though they do enjoy some protection from financial responsibility, that protection isn’t absolute.

• ASHRAE Security & Privacy Policy does not apply to sites of any ASHRAE chapter, region, student branch, technical committee or other group affiliated or associated with the Society.

ASHRAE Chapter Best Practice

• Enjoy your participation in ASHRAE • Enjoy your participation in ASHRAE