Project Name: Checks & Balances: Basic

Guidelines for Volunteer Groups, Clubs &

Nonprofits

VIDEO/STILLS AUDIO
Slide #1: Title Slide Auditor General Intro:

Auditor General On Camera Hi, I am Auditor General Eugene DePasquale.

Non-profit organizations are the backbone of

many communities.

These nonprofit organization have the potential

to raise a large amount of money for teams,
schools, or civic organizations.

Video/Stills: Money, checkbook, etc. We have created this video to help you become
more familiar with handling this money.

We will show you how to use simple, but sound

financial practices to provide the maximum
benefit to your organization.

Auditor General on Camera Well cover financial record-keeping, budgeting,

tax exemption, banking procedures among other
things.

Nonprofit volunteer organizations fall outside of

the Auditor Generals domain, but I want you to
be successful in raising private funds to support
your cause.

Thank you for watching. I hope you find this

information helpful
Slide #2: Financial Recordkeeping Narrator:

The importance of maintaining organized records

is paramount for all volunteer organizations.

Video/Stills: People around table examining Record-keeping may include a chart of accounts,
records/paperwork. journals, ledgers, an investment roster, an
equipment roster and a membership roster.

Slide #3: Example of journal In accounting, a journal refers to a financial

 record kept in the form of a book, spreadsheet or
accounting software that contains all financial
transactions.

Transactions should be recorded and presented

in the journal in chronological order.

These transactions are then assigned to a ledger

using a chart of accounts.

Slide #4: Example of ledger A ledger, on the other hand, summarizes financial
information that is classified to a specific account
number using a chart of accounts.

A ledger can be a physical book, spreadsheet or

accounting software where the financial
information is recorded.

Financial information for ledgers is taken from

the journal.

Slide #5: Budgeting A budget is a nonprofits planning tool and should

allow the flexibility needed to achieve goals with
order and success.

Slide #6: Budget committee qualifications (NEW) A budget committee should reflect the collective
knowledge of those goals and objectives.

Volunteers who serve on the budget committee

should ideally have the following qualities:

A familiarity with prior years' activities, and the

changes that are contemplated in the year(s) to
come, particularly the objectives in the strategic
plan.

A desire to serve the organization as a whole

rather than to lobby for a particular project.

A knowledge of ordinary budgeting, whether on a

personal or business level.

Slide #7: Budget steps (NEW) The task of the budget committee is to develop
the budget for the next year (or future years, in
the case of a multiyear budget).

Slide #8: Tax Exemption
Slide #9: Receiving Exemption (New)
The steps in developing a budget are as follows:
Define the budget timeline, and develop a list of
objectives or goals for that period using
previously successful budgets as a guide.
If the organization has a strategic plan, consider
activities in the plan that will affect the budget
and plan accordingly.
Estimate the cost or resources required to
achieve each objective or goal.
The previous years actual expenses or budget
can be used as a starting point.
If the objective or goal involves new programs or
activities, estimate the cost by creating an
itemized list of all the expenses involved in
achieving that particular objective.
List specific tasks with specific responsibility
assignments.
Even though many people may contribute to a
task, pick one person to take leadership
responsibility for making sure it happens.
Estimate the expected dates and revenue
amounts that will be generated.
Compare the expected dates and revenue
amounts to the estimated expenses.
Develop the final budget.
Present the budget to the appropriate people for
approval.
Nonprofit corporations may request recognition
for their tax-exempt status
In order to receive this status from the IRS, you
must fill out a form and attach your proposed
budget, certified Articles of Incorporation and a
true copy of bylaws
Resumes of board members are helpful as well
Video/stills: Someone filling out a form or
document; add telephone number at the
bottom of the screen
Slide #10: Fundraising Management
Video: A nonprofit fundraising event
Slide #11: Strengthening Nonprofits (New)
This application should be filed within the first 15
months of your organizations existence
Call the IRS at 1-800-829-FORM to learn more
about your options
In any organization, it is a leaders task to create
and implement a plan for raising funds needed
per annual budget
It can be helpful to examine your groups past
fundraising sources to see which were the most
successful
In addition, members deal directly with funds
should always have a system of checks and
balances to ensure transparency and safeguard
against mishandling
A few tips to help in establishing and maintaining
a successful nonprofit are as followed:
Review all previous foundation funding and
determine whether the organization is eligible for
financial support from each foundation again.
Research additional foundations for compatibility
with the organization in terms of mission,
geographic focus, and organizational life cycle.
Complete profiles that include foundation
priorities, contact information, proposal due
dates, submission instructions, and funding
range.
Develop a funding matrix to determine the
probability of receiving grants from each
foundation. Criteria include compatibility with
organizational mission, foundation funding
priorities, receipt of previous funding, funding of
similar organizations in the area, and relationship
with the funder.
Multiply the probability of funding by the amount
of the request to determine how much the
proposal is worth.
Determine which foundations to apply to based
on worth.
Slide #12: Banking Procedures
Video/stills: People handling money (at a bank
for example); cash/checkbook
Slide #13: Online Banking Guidelines (New)
Video: People conversing with a bank teller;
stills of receipts; balancing checkbook
Slide #14: Rosters
These procedures are put in place to
demonstrate the responsible way to transfer
funds
In the interest of transparency, group leaders
should consider writing checks directly to
vendors and be sure to include the signatures of
two officers in order to maintain accountability. It
is advised that group leaders should not write
checks to cash
You may elect to use online banking or bill-payer
services, under the following guidelines:
Two officers must be involved in the process. One
officer will make the online payments, while the
other officer will perform the monthly
reconciliation of the bank statements.
Statements should be reconciled timely, and the
reconciling officer should initial and date the
statements upon reconciliation.
Approval of the payment should be included in
the minutes of meetings.
Financial records presenting the groups financial
activity should be prepared on at least an annual
basis.
Organizations should also prepare an accurate
record of receipts and disbursements for the
year, and the effect of those transactions on the
entitys account balances.
At least two people should be involved in
counting cash or check receipts.
Cash deposits should be made IMMEDIATELY; in
the interest of transparency, no one should ever
take cash home.
Bank accounts should be reconciled each month.
Typically this is the treasurers duty; however,
bringing in a third party would provide additional
safeguards. At the very minimum, the treasurer
should provide a copy of the bank statements
along with the monthly reconciliation of the
accounts at the regular meeting.
Rosters are used to assist in tracking investments,
equipment and membership
Slide #15: Investment Roster Example (New)
Slide #16: Equipment Roster Example (New)
Slide #17: Leadership Changes
Slide #18: Steps to Take with Leadership Change
Video: footage of booster club sporting event;
include phone number and website on the
screen when mentioned in narration
Organizations are responsible for the
management of their assets, and the prudent
investment of organization monies is a primary
element of this responsibility
Group members should maintain a complete and
accurate roster of equipment owned by the
organization, which includes the following:
Types of equipment purchased
Dates of purchase
Unit costs
Names of suppliers
Serial numbers, if applicable
Current locations of items
Final dispositions of sold or damaged equipment
Evidence of the performance and results of an
annual physical inventory
In the event that new leaders are introduced to
the organization, the following steps should be
taken
Change authorized names on financial accounts
(i.e. bank accounts, mutual funds,
brokerage/trust accounts)
Ensure all respective documents are turned over
to the new association officers. This includes
bank/investment statements, canceled/imaged
checks, journals, ledgers, equipment rosters,
membership rosters, investment rosters,
invoices/receipts and meetings minutes
Document names, addresses, phone numbers
and email addresses of new officers.
For further review of guidelines, refer to the
Department of the Auditor Generals Website:
www.paauditor.gov/audit-reports or call our
Department at 1-800-922-8477