Chapter_4 - Chapter 4 Chapter 4 Financial Management A Financial Reporting to Members Board and to the National(Treasurer's Report The most

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Chapter 4 Chapter 4 Financial Management A. Financial Reporting to Members & Board, and to the National (Treasurer's Report) The most fundamental of an officer's fiduciary duties to the rest of the Board and to the membership and the National office is to report on the chapter's finances, accurately and timely. Most by-laws require the Treasurer to submit reports to the Board and the membership. Those reports, if properly designed, can be used to transmit information that will be needed for other purposes as well. The National office needs to be made sufficiently aware of each chapter's financial transactions that it can perform its responsibility to monitor the activities of those covered by the group exemption and certify accurately to the IRS on an annual basis that all are still operating within exempt purposes. Chapter financial reports should report the essential data that will be asked at year-end on the chapter's own Form 990-EZ or 990 filing, or the group 990 filing, if the chapter elects to participate in that. In addition to quantitative figures, a number of qualitative questions are asked on those forms. See the appendices to Chapter 5 to view the IRS forms. In the appendix to this chapter (Chapter 4) is one suggested format for a Treasurer's report that both supplies much of the necessary 990 information as well as tying down the cash accounts to the bank reconciliation. B. Records Retention A chapter's organizing documents, meeting minutes, insurance policies (even expired ones), and its essential financial records should be retained indefinitely. Essential financial records would include all final financial statements (balance sheet and income or profit & loss statements), the general ledger, which is the organization's "books", and all income tax return filings. There are many suggested periods of retention of other categories of records. One standard set of suggestions, not tailored for non-profits but for businesses in general, is displayed in the appendix to this chapter. The suggested retention periods are generally geared to the statutes of limitations for enforcement of various business and tax laws, federal and state. C. Bank Reconciliations (sample format) 1
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Chapter 4 The best single step to protect both financial integrity and accuracy is perform timely, monthly reconciliation of the bank accounts to the chapter's "books," which ultimately means its financial statements, including the Treasurer's report. The reconciliation process should involve more than one single person. At a minimum, a second responsible person should review them on a timely basis, which means at least within the same month. It is probably not an exaggeration to say that half of the small non-profit organization financial frauds of recent years could have been avoided if the full reconciliation process had been performed timely.
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This homework help was uploaded on 02/16/2008 for the course ACCT 401 taught by Professor Smith during the Spring '08 term at A.T. Still University.

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Chapter_4 - Chapter 4 Chapter 4 Financial Management A Financial Reporting to Members Board and to the National(Treasurer's Report The most

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