Best Practices: Financial Resource Management February 2011

Core Principles for Financial Resource 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 1

Core Principles for Financial Resource 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 2

Potential Agency Risks Failure to be accountable for resources invested in our agency Vulnerability in the mismanagement of funds generated by external support groups 3

Key Elements of Best Practices 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. 4

Key Elements of Best Practices 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. 5

Determination of Funds Texas AgriLife Extension Service External Support Group 6

Determination of Funds Texas AgriLife Extension Service 7

Stakeholder Accountability Expectations Agency Funds Contracts, Grants and User Fees: TAMUS Policies and Procedures Director authorized On-site reviews / Audits Fiscal accountability 8

Type of Agency Funds Designated Funds workshops / conferences publication sales services / labs gifts – restricted / unrestricted Restricted Funds contracts & grants 9

Agency Events Options for handling agency events internally: Extension Conferencing Services Unit / District Offices – submit revenue to AgriLife Cash Management Office mgmt/index.php mgmt/index.php 10

Contracts & 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. 11

Agency Compliance & Record Retention 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. 12

Agency 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 13

Determination of Funds External Support Groups 14

Stakeholder Accountability Expectations External Support Group Funds Contracts, Grants and User Fees: Cash Management Practices Support Group controlled Support Group accountable 15

Key Elements of Best Practices Support funds generally are: user fees sales and registration fees personal and corporate contributions grants/contracts 16

Key Elements of Best Practices External support group funds are… Not the property of Extension Not controlled by the agency or its employees 17

Best Management Practices External 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 18

Best Management Practices External Support Groups 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. 19

Best Management Practices External Support Groups 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. 20

Best Management Practices External Support Groups 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. 21

Best Management Practices External Support Groups 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. 22

Best Management Practices External Support Groups 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. 23

Best Management Practices External Support Groups 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 24

Best Management Practices External Support Groups 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. 25

Best Management Practices External Support Groups 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. 26

Best Management Practices External Support Groups 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 27

Best Management Practices External Support Groups 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 28

Additional Resources Best Management Practices: Texas AgriLife Extension Service Financial Resource Management Manual Contact your immediate supervisor 29