BOOSTER CLUB TRAINING Department of Athletics Temple Independent School District

Booster Club Website –Hover over “Parents” –Select “Athletics” –Select “Booster Clubs”

Board Policy GE Local GE Local –The Board is responsible for the oversight of the District including parent or booster organizations that use the school name or claim any connection with the school. The Board shall approve and recognize only those organizations that meet established guidelines and, in the opinion of the Board, operate for the benefit of the school and its students

Board Policy Required Data Required Data –Purpose and operational guidelines Constitution, Bylaws, goals, etc Constitution, Bylaws, goals, etc –Constitution and guidelines for operation –List of officers –Financial goals –Audit of all funds upon request

Board Policy (cont) Specific Guidelines Specific Guidelines –Superintendent or principal has veto power over any action of the club –No authority to direct any school employee in any of his or her duties –No authority to guide, direct, or establish guidelines for any school activity –All individuals should be eligible for membership –Election of officers should be on a systemic basis –If Club disbands, ceases to operate all funds and property become the property of the Temple ISD

Board Policy (cont) Specific Guidelines (cont) Specific Guidelines (cont) –Clubs must abide by UIL Booster Club Guidelines –Club may be disbanded by the administration or Board if it does not adhere to the established policies and regulations

Meetings All actions of the booster club should be recorded in the meeting minutes All actions of the booster club should be recorded in the meeting minutes Meetings should take place on District premises Meetings should take place on District premises Campus administrators must be invited to meetings Campus administrators must be invited to meetings –72 hours notice and posting

Internal Controls (Bank Accounts) Controls over bank accounts Controls over bank accounts –Establish bank account & require two signatures Recommend at least three signers on bank signature card Recommend at least three signers on bank signature card –Review of bank statement and it’s contents by independent party (non- treasurer, non-signer) ***required for fidelity bond***

Internal Controls (Bank Accounts) Controls over bank accounts Controls over bank accounts –Review of bank statements (cont.) Review front and back of check for propriety Review front and back of check for propriety Ensure # of cancelled checks match number printed on bank statement Ensure # of cancelled checks match number printed on bank statement Compare disbursements to budget & proper approval as documented in the minutes Compare disbursements to budget & proper approval as documented in the minutes Evaluate deposits for completeness Evaluate deposits for completeness

Internal Controls (Bank Accounts) Controls over bank accounts (cont) Controls over bank accounts (cont) –Bank reconciliations completed within 30 days –Review and sign-off of bank reconciliation by independent party

Internal Controls (Cash) Controls over cash & receipts Controls over cash & receipts –Deposits made daily for $250 or more –Receipts supported by documentation Cash Receipt Cash Receipt Ticket sales record Ticket sales record Tabulation of monies Tabulation of monies –Cash verified under dual control At conclusion of fundraiser & when changing hands At conclusion of fundraiser & when changing hands

Internal Controls (Cash) Cash safeguarded at all times Cash safeguarded at all times Cash should NOT be maintained at member’s home Cash should NOT be maintained at member’s home –Deposit funds day of events – utilize night drop

Internal Controls (Disbursements) Controls over disbursements Controls over disbursements –Complete fundraiser application –Checks supported by documentation Invoice Invoice Receipt Receipt Signed and authorized by President or Vice President Signed and authorized by President or Vice President –Checks should require a second signature

Internal Controls (Disbursements) Controls over disbursements (cont.) Controls over disbursements (cont.) –Blank checks should not be issued – require reimbursement –Checks should not be made out to “cash”– make out to individual so there is accountability

Internal Controls (Budget/Oversight) Budgetary and oversight control Budgetary and oversight control –Approval of budget –Regular written financial reports to membership regularly At a minimum At a minimum –Bank account balance –Receipt & disbursement activity since last meeting –Comparison of budget vs actual

Internal Controls (Budget/Oversight) Budgetary and oversight controls Budgetary and oversight controls –Complete a financial recap at end of fundraiser –Audit by independent individuals ***required for fidelity bond***

Financial Controls Checklist Posted to Booster Club website Posted to Booster Club website Helps to evaluate what controls you have in place and what needs to improve Helps to evaluate what controls you have in place and what needs to improve

Insurance Coverage May or may not need depending on size of organization and funding availability May or may not need depending on size of organization and funding availability Liability insurance Liability insurance –General liability – protects booster club and members –Officer’s liability – protects officers for decisions made

Insurance Coverage (cont) Liability Insurance Liability Insurance –Business personal property – protects computers, fundraising merchandise, etc –Fidelity (bond) coverage – protects funds from fraud, embezzlement, robbery, and theft Must have certain financial controls in place to qualify for fidelity coverage Must have certain financial controls in place to qualify for fidelity coverage

Submission of Financials & Audit Reports Submission of financial reports Submission of financial reports –Deadline January 31 for period ended Dec. 31 –Deadline July 31 for period ended June 30

Fundraising No longer allowed – violates IRS provisions: No longer allowed – violates IRS provisions: –Individual accounts –Required participation in fundraising –Required sales quotas

Fundraising Booster clubs may have (school clubs may not): Booster clubs may have (school clubs may not): –Raffles – must be a 501(C) (3) organization –Bingo – must be a 501(C) (3) Specific rules apply to both Specific rules apply to both

Scholarships Checks written to university (not student, after receipt/invoice provided – prefer funnel through campus for better tracking Checks written to university (not student, after receipt/invoice provided – prefer funnel through campus for better tracking Consult principal and/or counselor for help Consult principal and/or counselor for help Scholarships – should be small portion of budget Scholarships – should be small portion of budget

Benefits of Becoming a 501(c)(3) Tax Benefits Tax Benefits –Revenues raised by organization are generally not taxable –Contributions to 501(c)(3) are tax deductible by the contributor –Can qualify for sales tax exemption through State of Texas –Ability to hold raffles and conduct bingo

Benefits of Becoming a 501(c)(3) Legal Benefits Legal Benefits –Potential for reduced individual liability from incorporation (should obtain legal advice regarding legal liability and insurance protection)

Obtaining 501(c)(3) Part 1 File certificate of formation as a nonprofit association with Texas Secretary of State File certificate of formation as a nonprofit association with Texas Secretary of State Obtain employer identification # via Application for Employer Identification Number, Form SS-4 – Done online – IRS Obtain employer identification # via Application for Employer Identification Number, Form SS-4 – Done online – IRS Complete Application for Recognition of Exemption Under 501(c)(3) of Internal Revenue Code, Form 1023 Complete Application for Recognition of Exemption Under 501(c)(3) of Internal Revenue Code, Form 1023

Obtaining 501(c)(3) Part 2 Include user fee of $400 or $850 (depending on whether average annual revenues are less than or greater than $10,000) Include user fee of $400 or $850 (depending on whether average annual revenues are less than or greater than $10,000) Form 1023 not required if gross receipts <$5,000 per yr. (may still be recommended) Form 1023 not required if gross receipts <$5,000 per yr. (may still be recommended) Upon approval, receive Determination Letter stating effective date of tax-exempt status (cannot represent as tax-exempt until then) Upon approval, receive Determination Letter stating effective date of tax-exempt status (cannot represent as tax-exempt until then)

Obtaining 501(c)(3) Part 3 IRS Publication 557, Tax Exempt Status for Your Organization, covers the rules and procedures for organizations that seek recognition of exemption from federal income tax IRS Publication 557, Tax Exempt Status for Your Organization, covers the rules and procedures for organizations that seek recognition of exemption from federal income tax

IRS – Form 990 (part 1) Due 4 ½ months after year end (May 15 th if using calendar year) Due 4 ½ months after year end (May 15 th if using calendar year) Schedule A required to be included with 990 filing Schedule A required to be included with 990 filing Can file Form 990-EZ instead if gross receipts are below the following threshold amounts: Can file Form 990-EZ instead if gross receipts are below the following threshold amounts: –$100,000 for years beginning before 2008 –$1,000,000 for years beginning in 2008 –$500,000 for years beginning in 2009 –$200,000 for years beginning after 2009 Can file Form 990-N instead if gross receipts are below $25,000 Can file Form 990-N instead if gross receipts are below $25,000

IRS – Form 990 (part 2) For years beginning after January 1, 2008, Form 990 overhauled, eligibility for 990-EZ expanded. For years beginning after January 1, 2008, Form 990 overhauled, eligibility for 990-EZ expanded. Unrelated business income tax – may be liable (income from trade/business that is regularly carried on and not substantially related to charitable purpose for which established) Unrelated business income tax – may be liable (income from trade/business that is regularly carried on and not substantially related to charitable purpose for which established) –Example 1: advertising vs sponsorship income

IRS – Form 990 (part 3) IRS Publication 598 – Tax on Unrelated Business Income of the Exempt Organization IRS Publication 598 – Tax on Unrelated Business Income of the Exempt Organization Public disclosure – what is required: Application for Tax Exemption, Form 1023; Determination Letter; Annual Form 990 (last three years) Public disclosure – what is required: Application for Tax Exemption, Form 1023; Determination Letter; Annual Form 990 (last three years)

Tax Exempt Status Do’s & Don’ts Activities must benefit the group as a whole instead of benefiting individual members of a group Activities must benefit the group as a whole instead of benefiting individual members of a group Cannot use individual accounts to benefit only certain individuals with revenues raised Cannot use individual accounts to benefit only certain individuals with revenues raised Cannot require a person to participate in fundraising. Can have certain criteria met for member to receive benefit – attendance at meetings, events, etc. – but not fundraising Cannot require a person to participate in fundraising. Can have certain criteria met for member to receive benefit – attendance at meetings, events, etc. – but not fundraising –Benefits reduction must not affect student only parent member – not voting rights, no eligibility for officer elections Cannot require that a certain amount be raised or sold per person Cannot require that a certain amount be raised or sold per person

Other Compliance (part 1) Other IRS Issues Other IRS Issues –1099 reporting – all payments for services of $600 or greater made to an individual or unincorporated business reported on 1099 on or before Jan. 31 st of following year Should have IRS form W-9 completed by provider at the time of service to obtain information needed Should have IRS form W-9 completed by provider at the time of service to obtain information needed

Other Compliance (part 2) Texas issues Texas issues –Exemption from sales tax and franchise tax – State Comptroller’s office Done separately and in addition to IRS tax- exemption Done separately and in addition to IRS tax- exemption Must be 501(c)(3) to qualify Must be 501(c)(3) to qualify –Texas Application for Exemption

Other Compliance (part 3) Purchases by Club Purchases by Club –Sales tax permit – sales tax exemption applies to purchase, lease or rent of taxable items that are necessary to organization’s exempt functions, but not sales –Provide exemption certificate at time of purchase Cannot use tax-free items for personal benefit Cannot use tax-free items for personal benefit Items which become the personal property of individuals are not exempt from tax Items which become the personal property of individuals are not exempt from tax Sales by Club Sales by Club Must obtain sales tax permit to collect and remit sales tax on taxable sales Must obtain sales tax permit to collect and remit sales tax on taxable sales Two tax free sales per year – qualifying organizations only (501(c)(3)) Two tax free sales per year – qualifying organizations only (501(c)(3)) If resale of items, provide re-sale tax exemption form to vendor at time of purchase If resale of items, provide re-sale tax exemption form to vendor at time of purchase

Club’s Permanent Records IRS Determination Letter IRS Determination Letter IRS Application for Exemption IRS Application for Exemption Annual Form 990’s Annual Form 990’s Employer Identification Number (EIN), Form SS-4 Employer Identification Number (EIN), Form SS-4 Exemption letter from State Comptroller Exemption letter from State Comptroller