Best Practices: Financial Resource Management February 2011

Best Practices:Best Practices:Financial Resource ManagementFinancial Resource Management

February 2011February 2011

Core Principles for Financial Core Principles for Financial Resource ManagementResource Management

• Maintain public trust

• Establish internal and external accountability practices

• Ensure risk management and mitigation

• Minimize risk of support groups and volunteers through education/training

• Identify clear roles of Extension and support groups

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Core Principles for Financial Core Principles for Financial Resource ManagementResource Management

• Document and communicate best management practice policies and procedures

• Ensure that external resources invested in Extension programs are used in the manner intended

• Ensure compliance with A&M System policies

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Potential Agency RisksPotential Agency Risks

• Failure to be accountable for resources invested in our agency

• Vulnerability in the mismanagement of funds generated by external support groups

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Key Elements of Best Key Elements of Best PracticesPractices

• State/Federal law requires that funds raised or given in support of all Extension programs be handled in a manner of public trust.

• Financial responsibility is the responsibility of the entire organization.

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• Securing external funds for program enhancement is an acceptable way to expand Extension programming.

• Planning, controls, and documentation are major components for managing program finances, assets and taxes.

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Determination of FundsDetermination of Funds

• Texas AgriLife Extension Service

• External Support Group

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• Texas AgriLife Extension Service

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Stakeholder Accountability Stakeholder Accountability ExpectationsExpectationsAgency FundsAgency Funds

Contracts, Grants and User Fees:

• TAMUS Policies and Procedures

• Director authorized

• On-site reviews / Audits

• Fiscal accountability

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Type of Agency FundsType of Agency Funds• Designated Funds

• workshops / conferences

• publication sales

• services / labs

• gifts – restricted / unrestricted

• Restricted Funds

• contracts & grants

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Agency EventsAgency Events

Options for handling agency events internally:

•Extension Conferencing Services

• http://agrilifevents.tamu.edu

•Unit / District Offices – submit revenue to AgriLife Cash Management Office

• http://agrilifeas.tamu.edu/fiscal/cash-mgmt/index.php 11

Contracts & GrantsContracts & Grants

• A grant proposal cannot be requested nor received on behalf of Extension without the Extension Director’s approval.

• All Extension grants will be administered through the AgriLife Contracts and Grants office.

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Agency Compliance & Record Agency Compliance & Record RetentionRetention

• Agency subject to open records act

• Funds held by agency are subject to state, federal and local audit

• Documentation should be held in compliance with state record retention schedule.

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Agency Tax ExemptionsAgency Tax Exemptions

• Agency purchases are exempt from state sales tax

• Texas sales and use tax exemption certification required• Sales tax not reimbursable

• Agency may short pay invoice

• Employee responsible for correcting with vendor

• Travel using agency funds qualify for Texas hotel occupancy tax exemption certificate

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External Support Groups

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Stakeholder Accountability Stakeholder Accountability ExpectationsExpectations

External Support Group External Support Group FundsFunds

Contracts, Grants and User Fees:

• Cash Management Practices

• Support Group controlled

• Support Group accountable

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Support funds generally are:

• user fees

• sales and registration fees

• personal and corporate contributions

• grants/contracts

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External support group funds are…

• Not the property of Extension

• Not controlled by the agency or its employees

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Best Management Practices Best Management Practices External Support GroupsExternal Support Groups

• An external committee/group determines:

• what proposals are signed and submitted on behalf of the external entity.

• may not propose or commit Extension resources or personnel without prior approval by:

• Extension educator

• Immediate supervisor

• AgriLife Contracts and Grants office

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Where Extension staff have access to grant funds received by another entity e.g.,

• county

• foundation

• local 501(c)(3) group

• support group

. . . access to fund should be outlined in writing with allowable expenditures clearly defined.

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• Support funds may be held by nonprofit status organizations, i.e.:

• 4-H Council

• 4-H Volunteer Leaders Associations

• Master Gardeners Associations

• Extension Program Council

• Extension Program Area Committees

• Legal ownership of funds and property must reside with the association/organization.

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• Clarifying Extension and support group roles will help:

• safeguard funds

• prevent misunderstandings

• protect Extension and its employees

• A written record of ownership should be prepared with the owner and kept on file in the Extension office.

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• Extension employees may facilitate registration and the collection of fees for activities and competitions

• In no case will Extension employees receipt, control or make deposits for support group funds. Volunteers or county support staff where necessary, may conduct the process.

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• Individuals responsible for handling external support funds must do so in an open, responsible and trustworthy manner.

• Administrators, faculty, staff, club managers, and treasurers must carry out their respective responsibilities as defined by the rules and guidelines for handling finances and assets.

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• Extension does have an interest in ensuring that support groups do not improperly use their relationship or association with the agency when collecting monies or receiving donations.

• Care should be taken to ensure…• use of donated funds match the purpose• utilized in a timely manner

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• Each county Extension program area should have a committee or task force to direct financial resource management.

• No Extension employee will have custody, signature authority, or online access of an external support group bank account or certificate of deposit.

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• External Support Group Responsibilities

• Clearly define individuals in group that have fiscal responsibility of funds.

• Identify a treasurer to maintain records of financial transactions for the organization

• Recommend annual review of financial records by outside group.

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• Review of external support accounts helps to ensure:

• Committee has internal controls in place

• Established by-laws

• Proper record keeping and authorizations

• Separation of duties

• Development of annual budget

• Proper tax forms filed

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• All external support groups must have a set of by-laws that include:

• Provisions for receipting and disbursing funds

• Planned disposition of external support group assets if the group disbands

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Additional ResourcesAdditional Resources

• Best Management Practices: Texas AgriLife Extension Service Financial Resource Management Manual

• Contact your immediate supervisor

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Best Practices: Financial Resource Management February 2011

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