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ASHRAE Chapter Best Practice

ASHRAE Chapter Best Practice. Chapter Financial Risk Management. Financial Risk Management. Chapter Treasurer Duties Financial Accounting & Banking Chapter Annual Audits Revenue and Taxation Reporting Fiduciary Duties. Chapter Treasurers.

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ASHRAE Chapter Best Practice

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  1. ASHRAE Chapter Best Practice Chapter Financial Risk Management

  2. Financial Risk Management • Chapter Treasurer Duties • Financial Accounting & Banking • Chapter Annual Audits • Revenue and Taxation Reporting • Fiduciary Duties

  3. Chapter Treasurers • Chapter Presidents to 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 & Approval; Keep Records. • Annual Independent Audit Committee appointed by BOG-Elect Prior to Annual Chapter Meeting. • Chapter Account used for Operations Only. • Use Separate Accounts for Special Events such as CRC Fund or Scholarships. • Responsible to File Tax Returns!!!-ASHRAE WEB SITE.

  4. 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.) • 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).

  5. 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.

  6. Revenue and Taxation Reporting • All USA Chapters must complete annual IRS Form 990 tax returns. • There are separate forms for Small and Large Chapters.

  7. Revenue and Taxation Reporting Small ASHRAE Chapter • Annual Electronic Filing requirements for Small Exempt Organizations- Form 990-N (E-Postcard) • http.epostcard.form990.org • Small ASHRAE Chapters whose gross receipts are normally $25,000 and less must complete 990-N form.

  8. Revenue and Taxation Reporting Large ASHRAE Chapter • Annual Electronic Filing requirements for Large Exempt Organizations - Form 990 or 990-EZ. • Large ASHRAE Chapters whose gross receipts are normally greater than $25,000 must complete Form 990 or 990-EZ. • The Board of Governors of the chapter should review the completed 990 form before it is sent to the IRS • Should consider using an outside CPA firm to complete the tax return

  9. Revenue and Taxation Reporting • Your Tax filing is due every year by the end of the 15th day of the 5th month after the close of your year end. • For most Chapters the year ends on June 30 and the Tax Filing must be completed by Nov.15th. (Check with IRS if not known) • You cannot file until after your tax year ends.

  10. 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.

  11. Late Filing or Failure to File • Chapters who fail to file tax returns risk IRS fines. • They also would jeopardize the Society’s Tax Exempt Status • The Society could dissolve the chapter

  12. UNDERSTANDING FIDUCIARY 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.

  13. Fuduciary Primary Duties A Fiduciary has three primary duties: • Duty of Care • Duty of Loyalty • Duty of Obedience

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

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

  16. 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.

  17. 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

  18. 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.

  19. ASHRAE Chapter Best Practice • Enjoy your participation in ASHRAE

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