Financially Linked: Do Your Dollars Make Sense?

2. Financially Linked: Do Your Dollars Make Sense? Presenters Lonneen M. Brown, Southern Area Treasurer Renee S. Jones, Southern Area Financial Secretary

3. Agenda Roles & Responsibilities Checklist Chapter Accounting Procedures Budgeting Internal and External Audit Guidelines PayPal Chapter Fundraising Protocol Review of Fines/Penalties Chapter Financial Calendar Questions Conclusion Contacts

4. Chapter Fiscal Officers President Financial Secretary Assistant Financial Secretary(optional) new Treasurer Assistant Treasurer(optional) new Vice President of Membership (serves only when she assumes the duties of the President)

5. President Ensures that the following occurs: all fiscal officers are bonded. the chapter operates under an approvedbudget. that a monthly report of the chapter’s finances is presented to the chapter. that the chapter meets all financial reporting deadlines. internal /external audits are completed. the proper segregation of the financial roles is maintained. arranges an effective transition meeting of incoming /outgoing fiscal officers. all checks have 2 signatures. deposits are made within 5 business days of receipt. Is ACCOUNTABLE to the chapter for the expenditure of funds and approves all expenditure of funds. • NEVER signs a check to herself or a blank check. Approves all IMIS transactions (Money will not be released until the president signs).

6. Treasurer Receives funds from the Financial Secretary. Deposits funds ( within five business days of receipt). Pays approved invoices/vouchers. Signs checks with President or other bonded officers on the bank account. Prepares & presents a monthly Treasurer’s report at the Executive Board & Chapter Meetings. Chapter Treasurer reports may be sent electronically. but must be provided via a secure file sharing solution, such as a Drop Box. Chairs Finance/Budget Committee. Remits dues to National Office & Foundation using IMIS System. Prepares and submits the transmittal for the payment of bonding insurance. Ensures the chapter 990 is filed timely. Becomes the leader in the financial life of her chapter.

7. Outgoing Treasurer Completes a financial year end report and presents a year end statement of financial operations at the May chapter meeting. Participates transition meeting with the newly elected and appointed fiscal officers. Confers with the incoming treasurer on all details of operational procedures. Physically meets with newly installed financial officers to transition bank accounts and acquire new signatures cards no later than June 30th. Submits fiscal year end ( April 30th) books to the chapter’s internal audit committee and external auditor ( if required). Prepares Form 990 for the final fiscal year end of her tenure. Transfers all financial documents to the new Treasurer no later than September 15th.

8. Assistant Treasurer Collect money in the absence of the Treasurer from the Financial Secretary. Provide a report of collected money to Treasurer. Assist in preparing of Form 300 to submit funds to the Lockbox. Assist in preparation for internal/external audits of financial documentation. Provide other assistance as needed by Treasurer. Note: The Assistant Treasurer cannot sign checks or make bank deposits.

9. Financial Secretary Receives ALL monies (membership dues, chapter assessments, including those for fundraising). Remits all monies to the Treasurer (within 5 business days of receipt). Maintains a ledger and provides receipts to members. Reconciles funds received and submits to Treasurer with appropriate receipts. Provides a monthly report to the chapter of monies received and submitted to the Treasurer. Reports may be sent electronically, but must be provided via a secure file sharing solution. such as a Drop Box. Sends a dues statement to each member annually, outlining her financial obligations and any unpaid assessments. Provides year end report to chapter and submits records for audit. Serves on the Finance/Budget Committee. Does not sign checks. .

10. Assistant Financial Secretary Collect money in the absence of the Financial Secretary. Support Financial Secretary with collection and receipt of money collected during a fundraiser. Prepare and provide receipts to members for money collected. Provide a report to Financial Secretary reconciling money collected. Submit collected funds to the Treasurer. Assist in preparation for internal/external audits of financial documentation. Provide other assistance as needed by the Financial Secretary. .

11. Finance/Budget Committee Is appointed by Chapter President; chaired by Treasurer. Members include: Financial Secretary, Immediate Past Treasurer, Program Coordinator, Assistant Financial Secretary and Assistant Treasurer and others, as needed. Develops a zero balanced budget based on chapter needs. Budget is presented by the Treasurer to Executive Board and subsequently, presented for approval by the chapter no later than the February meeting. Approved budget to be forwarded to the Area Treasurer no later than March 15th. .

12. Chapter Accounting Procedures • Bank Accounts: • Must be in the Name of the Chapter. • Chapter Federal Employer Identification number is required. • Chapter funds must always be deposited in a chapter account. • Two authorized signatures are required on checks and withdrawals. • Chapter funds are never to be invested in equities or debt instruments. • Chapter may have monies in CDs. • A chapter must maintain at least two (2) separate accounts; a Restricted (Program) and an Unrestricted Account (Operating).

13. Why Have Budgets? Per the FINANCIAL HANDBOOK, 2015-2016, REVISED EDITION: The Links’ financial policy and procedures, for national, area and chapters requires the use of an operating/unrestricted budget by fiscal year (May 1 – April 30).

14. Budget Overview • Is a financial plan – required for both unrestricted and restricted accounts. • Is approved by the chapter. • Estimated revenue over expenses anticipated over a period of time. • All chapters must develop a realistic balanced budget. • A budget must NOT be adopted if the bottom line is a deficit. • Establishes local dues. • Financial documents should be shared via secure site (i.e. Dropbox).

15. Restricted vs Non-Restricted • Restricted Funds • Funds raised to support the charitable mission of The Links, Inc. These funds support programming and may be directed to specific efforts or programs by donor (s). • Unrestricted Funds • Funds that are available to the organization for use toward any purpose, at the discretion of the leadership/membership. They generally go toward operating expenses.

16. Unrestricted (Operating) Budget Checklist • Income: • Members dues and fees • Corporate gift/donations • Revenue generated from other sources • Expenses: • National dues and fees • Special project expenses • Other expenses associated with member activity

17. Restricted (Operating) Budget Checklist • Income: • Fundraisers • Assessments • Grants • Sponsorships • Expenses: • Programming – STY. HHS. ITS. NT and The Arts • Charitable donations • Scholarships • Cost of Fundraiser

18. Chapter UNRESTRICTED FUNDS Budget ** ** SAMPLE

19. Chapter RESTRICTED FUNDS Budget ** • *May include • 10% Seed Money • from Previous Fundraiser ** SAMPLE

20. Summary Chapter Budget ** Refer to Appendix A-1 and A-2 in the FINANCIAL HANDBOOK for Sample Budgets ** SAMPLE

21. Contracts & Agreements - Chapter • A Chapter President may execute a contract up to $5,000 without approval of the Area Director but in accordance with chapter by-laws. • Send Contracts and Agreements greater than $5,000 to the Area Director via email. The Area Treasurer must be copied. The Area Director will forward to General Counsel for review. The document will be in legal review for 7-10 days. • If approved by General Counsel. the document will be forwarded back to the chapter and a copy of the approval to the Area Director and Area Treasurer. • If not approved. the contract will be returned to the chapter for revisions with a copy to the Area Director & Area Treasurer. • If the revised document is approved by the General Counsel. the document will be forwarded back to the chapter & a copy of the approval to the Area Director & Area Treasurer.

22. IMIS Procedures All Chapter Presidents and Treasurers should be familiar with the IMIS system. For complete details. review the Member Management System User Manual located in the Members Only section under documents @ www.linksinc.org. For questions please email finance@linksinc.org. Other Important Steps in IMIS: Submission of dues and bonding insurance is a 3-step process. First, the Membership Chair must enter each members service hours into the IMIS system. Second, the Treasurer enters the dues, bonding or any other payment. Third, the Chapter President must go into IMIS and approve the transaction for it to be complete and the funds released. A Notice is not sent to the President by IMIS to perform this step. .

23. Member Dues and Fees • Membership Dues: • The Treasurer submits dues using the IMIS system. • The payment of dues by the chapter must be completed by an electronic submission e-check. • Alumna fee of $15 (a optional publication fee for the Links publications) is payable by the member either directly to National Headquarters or by the member electronically via the website. • Building Assessment: • The deadline for the 2013 inductees and beyond will be: April 1st of their third year of membership to make the final building assessment payment. • Note: There is no extension. • Transfer Members: • Pro-rate dues from Prior Chapter.

24. Bonding Insurance • All Chapter Officers/ Committee chairs who handle funds are required to be bonded: • Chapter President • Chapter Vice President • Chapter Treasurer • Chapter Financial Secretary • Assistant Financial Secretary • Assistant Treasurers • Chapter Fundraising Chair / Chairs handling Chapter funds • A minimum of $5,000 coverage per position must be purchased. • Gross income receipts reported on your 990 determines the amount of coverage. • No Extensions will be permitted. • The penalty for failing to pay by September 15th is $500.

25. Umbrella Liability Insurance • Each chapter is covered by liability insurance for all activities & events through The Links, Inc. umbrella insurance policy. • Each chapter is assessed $5.00 per member for this coverage. • When a chapter sponsors an event that includes the public, which may generate greater exposure, the chapter should contact Professional Insurers (301-856-1810) to determine if additional coverage is necessary.

26. Bonding Insurance Choose the “Limit” corresponding to the highest balance in your Chapter’s treasury during the year.

27. Bonding Insurance • How to Submit Bonding Insurance • Chapter Treasurer: • Log in to “Members only” page of the Links website: www.linksinc.org. • Click on the left side of the page in the middle “Chapter Payments” tab. • Select “Bonding Insurance submit payments for the Chapter President’s approval. • Select Positions to be bonded at appropriate premium. • Notify President when transmittal is completed. • Chapter President: • Log in to “Members only” page of the Links website: www.linksinc.org. • Click on the left side of the page in the middle on “Chapter Payments” tab. • Click on Payment approval to approve payments.

28. Form 990 • All Chapters must file Form 990. Form 990EZ • or Form 990N (e-Postcard) • regardless of income levels

29. Form 990 • Must Dos” • The Links. Incorporated’s four-digit group exemption Number 1520 MUST BE on the form. • Chapters must use their own Employee Identification Number (EIN). • Email a copy of the completed Form or Confirmation from IRS to the National Headquarters. • Finance@linksinc.org • or the Chapter may upload a copy on the online Membership Management System. • Always retain a copy of the completed Forms or confirmation from Internal Revenue Service.

30. Form 990 • IRS Phone Numbers: • General information: 1-877-829-5500 • Monday-Friday: 8:00 a.m. to 5:00 p.m. CT • Forms telephone number: 1-800-829-3676. • Monday-Friday: 7:00 a.m. to 7:00 p.m. EDT • Website Information to secure the following form: • Form 990: http://www.irs.gov/irs-pdf/f990.pdf • Form 990-EZ: http://www.irs.gov/pub/irs-pdf/f990ez.pdf • All IRS Forms: http://www.irs.gov/forms • Mailing Address: • Department of the Treasury • Internal Revenue Service Center • Ogden. UT 84201-0027

31. Form 990 • For Extension - File Form 8868: • Form 8868 is available on the internet www.irs.gov.. • Automatic 3-month extension. • Complete Part I for the automatic extension. • Form 8868 can be filed on-line by September 15. • For Second Extension: • To obtain the second extension. the Chapter must have had an approved automatic extension and must complete Part II of the Form 8868. • The Form 8868 must be filed by December 15. • The Chapter and/or Area must show reasonable cause for the additional time. • The Extension of Time to file can be filed: • Online or mailed by the Chapter and/or Area to the Internal Revenue Service Center. • A copy of the request must also be sent to The Links National Headquarters. • The copy may be emailed to finance@linksinc.org or the Chapter may upload a copy on the online membership management system. • The approved IRS Form 990 Extension must be also be emailed to finance@linksinc.org

32. Form 990 • Late Filing Penalties • If a return is not filed by the due date, or the extended due date by the Chapter, IRS imposes a penalty of $20 for each day the return is late, unless reasonable cause can be shown for late filing, not to exceed the smaller of $10,000 or 5% of the gross receipts or the year. • It is the responsibility of the Chapter to pay all fines assessed by the IRS directly to the IRS. • The Links. Incorporated will assess a $100 late filing penalty if Form 990, Form 990EZ, or Form 990N is filed after the September 15th due date or the date of the extension. • Use of a paid preparer does not relieve the Chapter of its responsibility to file a complete and accurate report.

33. Chapter Audit Guidelines Internal Audit Committee: Shall consists of three to five members. appointed by the President. Shall review the chapter’s records annually. Members are not the current financial officers or members of the Finance Committee. Shall have some knowledge of the chapter’s fiscal operations (i.e. past financial officers). Immediate past financial officers can be members as long as they are not auditing financial transactions that occurred during their tenure. .

34. Chapter Audit Guidelines The Internal Audit Committee shall: Recommend an independent auditor for the annual review. Provide at least 2 bids to the Executive Committee of the Chapter. Review the chapter’s records. indicate any material weaknesses and propose internal controls. The Internal Audit Committee review of activities shall include: Verification of receipts for the period. Verification of expenditures for the period. Verification of balances for all accounts. Ensure presence of expenditure documentation (receipts, invoices, etc.). Ensure adherence to budget line items. Ensure adherence to separation of fiduciary responsibilities. Shall meet with the fiscal officers to present the findings of audit report, prior to submission to the executive committee. Present the audit report to the chapter, and if needed, the findings/recommendations. .

35. Chapter Audit Guidelines

36. Internal Audit Certification • Will be prepared by the chapter internal audit committee. • Will be submitted online by the chapter internal audit chair. • The chapter president MUST add the name of the internal audit chair to the IMIS system before the certification will be processed. • Will be signed by the chapter president online. • The form will ask the chapter for certain fiscal/internal control information. • The form will verify that the committee conducted an internal audit of the chapter books and records. • Internal Audit Form Due Date : September 15, of each year. • Fine for late filing after September 15th - $500.

37. Internal Audit Certification • Chapter presidents must add the name of the Internal Audit Chair to the online Member Management System to ensure they can complete and sign the form. • The Internal Audit Chair completes the Internal Audit Certification online. • The chapter president reviews and approves. • The Internal Audit Certification must be completed online via the IMIS system. • A sample of the form is available on the National Website in the Documents section under Finance. • The Annual Treasurer’s Report must be uploaded to the online system with the Internal Audit Certification by the internal audit chair. • Instructions (How to Submit) are on the next slide.

38. How to Submit Internal Audit Certification • Step 1: Internal Audit chairperson: • Log in to “Members only” page of the Links website: www.linksinc.org • On the left side of the page in the middle click on ‘Internal Audit certification form” tab. • Start filling out the form till you get to the last question. which it will ask you to upload the “Annual Treasurer’s report. • Click “choose file” to upload it from where you have saved it. • Put a check mark on the box below “Internal Audit chair Sign off” and “Save” the file to submit the form. • Step 2: Chapter President: • Log in to “Members only” page of the Links website: www.linksinc.org • On the left side of the page in the middle click on ‘Internal Audit certification form” tab. • Chapter President will review form and put a check mark on the box below “Chapter President sign off” and “Save” the form to complete the process of submitting Internal Audit certification form.

39. Treasurer Year End Financial Report See Appendix A-5 in Financial Handbook

40. External Audits • Step 1: Determine type of External Audit required: • Financial Statements • Audited Financial Statements • Step 2: Secure Licensed CPA or CPA firm to conduct audit. • Remember: The Chapter shall not engage an external accountant or licensed CPA who is a Link, Connecting Link, Heir O’ Link or any family member) to audit or review the Chapter’s financial statements. • If an extension is required for an external audit: • 1. A written request must be postmarked to headquarters to the National Treasurer by September 15th. • 2. If the extension request is emailed. it must be emailed by 11:59 pm EDT, on September 15th. • 3. The maximum period of time for an extension is 60 days.

41. Chapter Audit Definitions • Review of Financial Statements: • The licensed CPA will apply analytical procedures to your financial records/data and make inquires of company management and merely state whether he or she is aware of any material modifications that should be made to the financial statements for them to be in conformity with generally accepted accounting principles (GAAP), (limited assurance). • Audited Financial Statements: • The licensed CPA examines your accounting records and financial statements and conducts and independent investigation to test the accuracy of your accounting records and internal controls. At the conclusion of the audit, the auditor issues a report in the form of a letter stating whether, in the auditor’s professional judgment, your accounting records and year end financial statements fairly represent the nonprofit’s financial position according to generally accepted accounting principles (GAAP).

42. PayPal Overview • Why PayPal: • There has been increased demand in The Links. Inc. for the usage of credit /debit cards and online platforms to conduct business. • The National Finance Committee is providing the option of PayPal. which is widely known and utilized. • Extreme oversight and security of member funds is utmost. • What is PayPal: • PayPal is an online payment and processing platform. • PayPal offers the same protections as a credit card and has powerful fraud and consumer protections in place. • All PayPal accounts allow you to send and receive payments.

43. PayPal Access & Responsibilities • A User Agreement must be signed by the Chapter President and kept in a file with the Chapter Treasurer. • The Chapter Treasurer must be assigned as the Administrator and manage the account. run reports. provide refunds. set-up buttons and transfer funds to the Chapter Accounts. • Only the Treasurer may withdraw funds from the account or provide refunds. • PayPal will not send checks to the Links Foundation and payments sent via the Chapter PayPal Account are not tax deductible. • Disclosure statements are required when accepting contributions. so that donors are aware that their contribution is not tax-deductible.

44. PayPal Policy • A Business Account. versus an Individual Account. is recommended. • No fee to open account. • Monthly fee is $30.00. • Accounts must be opened in the name of the Chapter - not in the name of an individual. • Approval Process: • The Chapter must approve the establishment of an account by a 2/3 majority vote, with a 48 hour written advance notice, and agree to the payment of the fees associated with it. • A line item must be established on the budget for processing fees. which cannot be passed on the member. • The Chapter Treasurer must set-up the account and serve as Administrator.

45. PayPal Fees • The fee for each transaction is 2.9% plus $0.30 USD of the amount remitted. • There is a monthly account fee of $30.00. • Money can be withdrawn from your PayPal account to your bank account at no cost.

46. Chapter Fundraising Protocol • The Links. Incorporated is a 501(c)4 organization. • All chapters are tax-exempt from federal taxation • Chapters do not have legal authority to grant a tax deduction. only The Links Foundation can give a tax deduction to a donor (individual, group or corporation). • The federal tax exemption does not automatically extend to local and state tax authorities. Each jurisdiction enacts its own tax laws. • The Links. Foundation Incorporated is a 501 (c ) 3 organization. • It is the philanthropic arm of The Links, Inc.: • provides a means for donating contributions to the charitable and educational programs of the Links Foundation. • secures grants. sponsorships. donations and underwriters in support of community service programs. • donations made to the Foundation are tax deductible.

47. Chapter Fundraising Protocol • A chapter may conduct a fundraiser in two ways: • Conduct a fundraiser for the benefit of the chapter ( donations are NOT tax deductible. • Collaborate with the Links Foundation. Incorporated to sponsor fundraisers for charitable and educational purposes (donations are tax deductible). • Note: The fundraising procedures/manual for the Links Foundation have been revised. Please see the Links Foundation Manual located on the website. • Fundraiser for the benefit of the chapter: • Chapters may have chapter sponsored fundraisers which allows them to utilize proceeds for restricted or unrestricted purposes • Chapter sponsored fundraiser donations are NOT tax deductible • Any funds received from individuals. corporations and or the public for support or specific programming or a designated purpose are to be deposited in the chapter’s restricted account. (These funds are NOT tax deductible). • Depending on the program/project for which the funds were raised. funds can be held through the completion of the program/project. The chapter must follow though with the commitments made when the money was solicited.

48. Review of Fines/Penalties

49. Financial Calendar

50. Questions Please state your name and chapter