Texas 4 H BEST MANAGEMENT PRACTICES CLUB CHARTERING

Texas 4 -H BEST MANAGEMENT PRACTICES

CLUB CHARTERING

Club Chartering • For the most recent updates visit: https: //texas 4 -h. tamu. edu/volunteer/#club-management • Why do clubs need to be chartered? • What is involved in chartering a club?

What is a Charter? • A 4 -H charter is a “permit” issued annually for use of the 4 -H club name and emblem. • It allows a group to function with all the rights and privileges of 4 -H membership. • Once a club/group is officially chartered, the county office can download a letter from 4 -H CONNECT with the club name and 4 -H year to validate their charter recognition for the current 4 -H year.

What is a Charter, cont. ? • If the club/group is its own IRS recognized 501(c)(3) organization, they must file separately with the IRS on an annual basis, but still must be chartered as a Texas 4 -H club/group for recognition.

Why Do Clubs Need to Charter? • The 4 -H name and emblem is governed by congressional action. • Permission for use of name and emblem can be given by County Extension Staff. • Charters help ensure that clubs are functioning properly.

What does a Charter Provide? • A chartered 4 -H Club/Group under Texas 4 -H, Inc. provides the following benefits: • Use of the 4 -H name and emblem. • General Liability Insurance for facilities and meetings. • Accident/Incident Insurance for ACTIVE 4 -H youth and volunteers during 4 -H sponsored meetings/activities/ contests. • IRS recognition as an entity under a 501(c)(3) not-forprofit organization.

What does a Charter Provide, continued? • 4 -H Clubs/Groups who are not chartered are not allowed to use the 4 -H name and emblem and are NOT considered a 501(c)(3) organization, therefore required to pay income tax annually

What is Involved in Chartering? • 5 or more members • 2 or more managers • Meeting location • Elected officers • 1 project/member • Club name • Club By-laws • Annual Financial Review

Club Bylaws • By-Laws provide structure and a plan for how to conduct club business. • By-Laws should be reviewed and approved each year by club membership. • They must include a “dissolution clause”.

Club Bylaws • By-Laws should include the following: • • Name & Objectives of the Club Membership requirements Officer Election and officer duties Meeting information Committees and their duties Dissolution clause Amendment procedures

Club Bylaws • In general by-laws should not be made to address a specific problem or situation. • By-laws should be general in nature, because if you get too specific you have to follow it to the “T”. • i. e. Meeting information – 1 st Monday of each month, Sept. – May vs. 1 st Monday of each month at 8 PM at the Extension Office, Sept. – May.

Club Bylaws • Sample bylaws can be found at: https: //texas 4 -h. tamu. edu/wp-content/uploads/Sample_Bylaws_Revised. Apr 2017. doc

Club Financial Management • Must maintain public trust. • Establish accountability practices. • Attend a cash management training given by County Extension Staff. • Those responsible for handling funds must do so in an open, responsible and trustworthy manner.

MANAGEMENT OF 4 -H CLUB/GROUP BANK ACCOUNTS

Establishment of 4 -H Club/Group Bank Accounts • The name “Extension” or “Texas A&M Agri. Life Extension Service” should never be listed as owner of the fund account. The owner should be the “____” 4 -H Fund, “ 4 -H Fund. ” Do not use the word “County” in the name of a 4 -H account because it could be mixed in with other county government accounts. • All bank accounts and/or securities held by 4 -H groups should be associated with an Employer Identification Number (EIN) secured by the specific group or organization.

Establishment of 4 -H Club/Group Bank Accounts • Account Signatures • A 4 -H club/group account needs to have two (2) signatures. • Changes on Account Signatures • Notify the bank immediately in writing of any changes in check signers or persons authorized to withdraw funds from the account. • A 4 -H club/group should only have one bank checking/savings account.

Receiving Funds • Record cash receipts immediately upon receipt and deposit on a daily basis. • Prepare a list of all remittances received and make comparisons of this list with subsequent bank deposits. • Safe combinations and keys to cash boxes or files should be restricted to a minimum number of persons.

Receiving Funds • The person who collects funds and the person who writes checks should not be the same. • Detailed records (original invoices and receipts) should be kept on money collected (date collected, from whom, amount collected, purpose).

Requesting Funds • A check request form should be used when requesting funds and kept with account records. • Make all payments by serially numbered checks. • No checks are made payable to cash.

Requesting Funds • All supporting documents are stamped or adequately marked to prevent their reuse. • Reimbursement claims should be supported by cash register tapes or paid invoices that clearly state the purpose of purchase and from whom the purchase was made.

Reconciliation of Accounts • Bank accounts should be reconciled monthly and any adjustments recorded in the records immediately. Reconciling items should be handled in the month they are discovered. • The person who makes any deposits, approves payments, and/or writes checks should not be the one who reconciles the bank statement. • Bank statements should be delivered unopened directly to the reconciler.

RENTENTION OF FINANCIAL RECORDS

Maintenance of Records • Maintain a record of financial activities: • Original invoices and receipts • Money received (date, from whom, amount, purpose) • Money spent (date, by whom, amount, purpose) • Names on signature card (update when needed)

Maintenance of Records • Maintain a record of financial activities, continued: • Clubs are to retain records based on the IRS guidelines which generally state the statute of limitations runs three years after the date of the return is due or filed, whichever is later • Per Texas 4 -H, Inc. requirement: financial records (annual review of financial accounts and most recently bank statement) should be uploaded to 4 -H Connect for Chartering.

Financial Management Procedures • • Record cash receipts and deposit daily Use serially numbered checks Make sure cash is handled securely Do not make checks payable to “cash” Use a check request form to authorize payment Reconcile statements every month Each club puts together a budget

Accountability • Issue checks to vendors only for payment of approved original invoices which have been re-added and extended. • Try to match the check with receiving documentation or other evidence that the goods or services are complete. • Reimbursement claims should be supported by cash register tapes or paid invoices • If a prepayment is needed, an initialed statement can be used as support until the item is purchased. The subsequent invoice can be attached later.

Accountability • A computer software package with adequate built-in controls is recommended any time a bank account is involved. • All checks returned by the bank for insufficient funds should be dealt with immediately and a followup record maintained. • No barter items should be used as payment of amounts owed to outside parties or employees. • All funds must be accountable to the club/group budget that has been presented and passed by the club/group membership.

Cash Withdrawals • Reason for withdrawal must be documented (i. e. cash for concession stand) • Withdrawal must be made at the bank with a teller only and only by the club manager or treasurer. • If items are purchased with the cash a receipt must submitted. • NO checks should ever be written to “Cash. ” • Petty cash

Club/Group Debit Cards • Not a recommended practice • Each club may only have one (1) debit card in the club’s name • All purchases must be charged towards the correct club when reconciling books • Only used as a credit card, not PIN • Original receipts must be kept for all purchases • There are to be absolutely NO PERSONAL PURCHASES

Club Pay. Pal Account • Pay. Pal accounts will be allowed for clubs. • Each club may only have one (1) Pay. Pal account for their club. • The club manager(s) and the treasurer should be the only people to have access to that account. • If a club manager leaves their position, the account password will need to be changed and redistributed to club manager(s) and treasurer.

Club Pay. Pal Account • Original receipts must be kept for each purchase. • If clubs are receiving funds through Pay. Pal, it is important to provide a copy of the deposits to the treasurer to maintain with club financial records. • There are to be absolutely NO PERSONAL PURCHASES

Monthly & Annual Financial Review • Club/group should reconcile all bank accounts monthly. • The club/group treasurer is to provide a monthly financial report, including all necessary documentation, at the club/group meeting for review and approval. • County offices should receive an updated club treasurer’s report each month. • The club manager and treasurer should have a plan for retaining the clubs bank statements

Monthly & Annual Financial Review • A financial review will be a mandatory part of the Texas 4 -H Club Chartering Process and will be required as an upload on 4 -H Connect. • Agents will need to review each of the clubs financial review and sign it before it is uploaded to 4 -H Connect.

4 -H Fundraising Policy • The Texas A&M Agri. Life Extension Service encourages local club fundraising because these funds help to add enrichment to 4 -H programs. • The only restriction to 4 -H fund-raising is that 4 -H clubs and/or county programs may not accept United Way type funds if the local United Way management rules state that “if you accept United Way funds you may not raise additional funds. ” • Although few restrictions are applied to local 4 -H fund-raising activities, always keep in mind that 4 -H has an image and reputation to uphold. • 4 -H should never be connected with any activity which is illegal or which is contrary to moral standards of the community and/or the program.

4 -H Fundraising Policy • The amount of funds raised should correspond to the amount of the projected budget. • Money raised for awards and recognition should be kept in line with proper youth development principles. (ie: developing a budget that includes $25, 000 worth of awards is not necessary to properly recognize youth). • Fundraisers must be for the sole and direct purpose to support the youth of the 4 -H Program. Fundraisers cannot be held under the name of 4 -H, with the funds going directly, or indirectly, to other organizations or causes. County Extension faculty must be notified regarding any fund raising done in the name of 4 -H. Any club/group raising money in the name of 4 -H must be chartered through the county Extension office.

State Sales Tax Exemption • 4 -H is not state sales tax exempt! • Groups may apply to be state sales tax exempt for a particular event or period of time. • Work with your County Agent.