ASHRAE Chapter Best Practice Chapter Financial Risk Management

– Chapter Treasurer Duties – Financial Accounting & Banking – Chapter Annual Audits – Revenue and Taxation Reporting – Fiduciary Duties

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.

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).

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.

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

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.

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

Revenue and Taxation Reporting Your Tax filing is due every year by the end of the 15 th day of the 5 th 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.15 th. (Check with IRS if not known) You cannot file until after your tax year ends.

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.

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

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.

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

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

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

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.

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.

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.

ASHRAE Chapter Best Practice Enjoy your participation in ASHRAE