Guidelines for Bank Accounts for County Extension Offices

1. Purpose

  • The purpose of this web page is to establish the policies and procedures that all County Extension Offices should follow when handling money (checks, cash, credit, or other financial instruments) associated with Extension programs, sales, or any services provided under the auspices of the University of Florida Cooperative Extension Service.

2. Procedures

3. CED Annual Report Form

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Policies and Procedures for Handling Funds in County Extension Programs

Policies and Procedures for Handling Funds in County Extension Programs

1.       Background and Purpose

The purpose of this web page is to establish the policies and procedures that all County Extension Offices should follow when handling money (checks, cash, credit, or other financial instruments) associated with Extension programs, sales, or any services provided under the auspices of the University of Florida Cooperative Extension Service.

2.       Authority, Accountability  & Types of Funding Sources

a.       Oversight and Accountability - In each county, the County Extension Director (CED), on behalf of the University of Florida Cooperative Extension Service, is accountable for the administrative oversight of all funds associated with the county Extension program. In turn, the county Extension agent is responsible for monitoring the day-to-day generation, collection, and expenditure of funds associated with his or her local program (4-H, Agriculture, Horticulture, etc.), and for ensuring that appropriate program-specific  fiscal procedures are followed to manage these items. All funds associated with the county Extension program shall be subject to this policy.

b.      Delegation of Financial Authority – In each county, the CED should delegate the financial management duties associated with local banking accounts to the appropriate advisory body or authorized tax-exempt organization (e.g. Extension Advisory Committee, County
4-H Association, or county 4-H foundation), under the direction of the appropriate county agent for the purposes of ensuring the public of transparency and sound fiscal management.

c.       Common Types of Funding in Extension Programming - The following sources of revenue and their associated expenditures are examples of common types of projects that fall under the purview of the CED:

                                                   i.      General Examples of Funding Sources

1.       Fees for educational programs (supplies, refreshments, etc.).

2.       Sale of publications or newsletter subscriptions.

3.       Fees collected at shows, expos, fairs, events, and activities.

4.       Donations or gifts to an Extension program.

5.       Proceeds of fundraising events conducted by Master Gardeners or other volunteer groups.

6.       Awards and recognitions.

7.       Proceeds from fundraising events conducted in the name of Florida Cooperative Extension.
 

                                                 ii.      4-H-Specific Examples of Funding Sources (*For tax-exempt purposes, these funds must be held in an approved county 4-H program account, such as an Association or foundation account.)

1.       *4-H club funds.

2.       *4-H dues.

3.       *Donations and gifts to the county 4-H program.

4.       *Proceeds of fundraising events conducted in the name of 4-H.

5.       *Funds of 4-H affiliate groups.

6.       Fees for educational programs (supplies, refreshments, etc.).

7.       Newsletter subscriptions.

8.       Fees collected at shows, expos, fairs, events, and activities.

9.       Sale of 4-H publications.

10.   Awards and recognition.

3.     Procedures

All counties across Florida will follow a standard policy for financial management of Extension funds that has been approved by Extension administration. This policy will give county agents authority to manage their funds and will provide for demonstrable accountability and transparency in fundraising and fiscal management.

a.       Establishing Supervision and Control of Groups Managing Extension Funds – All advisory groups managing Extension funds shall operate according to provisions established in a Memorandum of Agreement (MOA) between the group and the County Extension Service. Such a MOA must be established in order to ensure adherence to the agreed-upon system of fiscal management for Extension program funds. For guidance in drafting an MOA (also commonly referred to as a memorandum of understanding), visit EDIS (http://edis.ifas.ufl.edu/4h259).
 

b.      Special Instructions for Supervision and Control of 4-H Groups - In the case of 4-H programming, a MOA must also stipulate the terms in which the group is authorized to use the 4-H name and emblem as well as to ensure sound fiscal management of 4-H funds. It is strongly recommended that one of the MOAs contained in the “Florida 4-H Implementation Guide to Maintain Tax Exempt Status in Your County Program” (http://florida4h.org/staff/taxexempt) be used in establishing an MOA with a group managing program funds.

c.       Maintenance of Different Types of Funding – In general, Extension program-related funds should be held in an account managed by an Extension advisory body, or by the county 4-H Association (or Foundation, where authorized). In circumstances where local situations complicate the management of funds, a distinction can be made between county Extension program funds and funds generated by Extension faculty. Examples of county Extension program funds include, but are not limited to: proceeds of fundraisers conducted by Master Gardeners, workshop registration fees, donations to the Extension program, 4-H club funds and dues, donations and gifts to the county 4-H program, proceeds of fundraising efforts conducted by 4-H, and the funds of affiliate 4-H groups. These funds should be kept in an Extension program account. In the case of 4-H funds, these types of funds must be kept in a county 4-H Association or 4-H foundation account.

Examples of funds generated by Extension faculty as a result of their programmatic efforts include, but are not limited to, fees for materials, sale of publications, grant funding, newsletter subscriptions and other event-related fees. These funds may be held in other accounts, as deemed appropriate by the CED.

d.      Obtaining Banking Services

                                                   i.      For all Extension programs, associated banking accounts must be established using an Employer Identification Number (EIN) created for that purpose. Unless otherwise specified, all Extension program accounts are also required to include in the name “Extension Program Account.” Any bank account operating under an individual’s social security number must be brought into compliance with the aforementioned requirement immediately.

                                                 ii.      Each county Extension program may have one or more banking accounts as deemed necessary by the CED and the Extension agents involved. The Extension agent, CED, and possibly an applicable advisory committee should work together to select an appropriate bank. Use the least number of different banks possible to simplify accounting.

e.      Special Instructions for 4-H Program Accounts

                                                   i.      For 4-H accounts, all bank accounts must be established using the Employer Identification Number (EIN) assigned to the local County 4-H Association. Changes, additions, or closures of these accounts must be reported via the year-end report submitted annually to the State 4-H Headquarters. All 4-H accounts not using an EIN listed under the University of Florida group exemption ( GEN) must also be immediately brought into compliance.

                                                 ii.      County 4-H Foundations: In certain circumstances, bank accounts may be established by affiliated not-for-profit incorporations, such as county 4-H foundations that have previously attained 501(c)3 tax exempt status. In these cases, a memorandum of agreement (MOA) must be signed by representatives of the County Extension Service and the tax-exempt organization authorizing use of the 4-H name and emblem and outlining the fiscal procedures required. Affiliated tax exempt organizations are required to maintain fiscal records in much the same way as County 4-H Associations.

                                                iii.      No New 501(C)(3) Groups Permitted to Use 4-H Name and Emblem: The University of Florida and the subordinate county 4-H Associations will be the primary means by which Florida 4-H maintains federal income tax exemption. This statewide system will be maintained in perpetuity by the State 4-H Office and County Extension offices, and its benefits will be available to all county 4-H programs. Consequently, no new county-level 4-H groups will be authorized to use the 4-H name and emblem in pursuit of its own 501(c)3 tax exempt status. Only in extraordinary circumstances with permission in advance from the Dean of Extension and Associate Dean for 4-H Youth Development will additional tax exempt groups be permitted to organize and/or operate using the 4-H name and emblem.

                                               iv.      4-H Club Threshold Amounts for Opening a Banking Account: 4-H Clubs or other affiliate 4-H groups that intend to have an annual budget of $100 or less need not establish an account with the local 4-H Association (or Foundation if acting as fiscal agent), but must maintain its treasury in accordance with the same 4-H policies and procedures for handling club funds, including submitting for audit annually.

f.        General Policy for Financial Reviews – The annual financial review is essential to ensuring sound fiscal management is being practiced by the groups that manage Extension’s funds. It is the Extension professional’s obligation to our donors and other stakeholders to ensure that these groups are managing Extension’s funds properly, and to demonstrate oversight of these accounts.

Who Prepares the Financial Reports for Groups?
The appropriate officers or committee chairs of each group managing an Extension program account should prepare their respective accounts for review and gather any requested reports and supporting documentation. The completed reports should be submitted to the appropriate county Extension agent and oversight committee.

Who Reviews the Program Accounts?
The county Extension agent and an appointed review or oversight committee will be primarily responsible for conducting reviews. The CED should check the agent and committee’s findings annually or from time to time, as deemed necessary by the CED.

Conducting Financial Reviews
The financial records for an Extension program’s accounts shall be reviewed annually at a time corresponding with the end of the account’s fiscal year by a review committee or other review authority selected by the appropriate Extension agent, such as the County Auditor or a local CPA, and approved by the CED.

Fiscal Year
The fiscal year for most Extension program accounts shall be from January 1 through December 31.

Reporting Your Review Findings
Each CED will be responsible for submitting a year-end report for each Extension account within 30 days of the end of its fiscal year. Such reports should be submitted by the CED, and then submitted to the District Extension Director for filing.

Maintaining Financial Records
County Extension Offices should hold their review records on file for seven (7) years for all accounts reviewed, including your county’s audit or financial review form and copies of supporting documents, such as bank statements, ledgers, receipts, checks, etc., for all accounts held by the Extension program in your county.

Audits vs Financial Reviews
August 2014

A financial review of each county Extension office bank accounts should be conducted annually.  These are different and much less costly than an official “audit”.

An audit provides the highest level of assurance on an organization’s financial statements and banking procedures.  An audit provides assurance that an organization’s financial statements are free of material misstatement and are fairly presented based upon the application of generally accepted accounting/banking principles.

An audit includes:

·         confirmation with outside parties

·         testing selected transactions by examining supporting documents

·         completing physical inspections and observations

·         considering and evaluating the internal control system of the organization  

A financial review provides limited assurance on an organization’s financial statements.  During a review, inquiries and analytical procedures present a reasonable basis for expressing limited assurance that no material modifications to the financial statements are necessary; they are in conformity with generally accepted accounting/banking principles.  This “does it make sense?” analysis is useful when the organization needs some assurance about their financial statements, but not the higher level of assurance provided by an audit. 

The County Extension Director is responsible for the financial reviews, which are conducted annually by persons within the organization, e.g., master gardeners, but not those responsible for the financial activities, e.g., treasurer.  This review group examines bank statements to assure that they have been reconciled and that appropriate accounting practices, e.g., QuickBooks are up-to-date and accurate.  The review group should submit a short report explaining what they did and their findings.  All financial review reports should be kept in the financial files in the Extension office.

g.       Special Directions for Reviewing 4-H Accounts: Because of Florida 4-H’s unique tax exemption structure and additional IRS reporting requirements, some elements of Extension’s annual financial review will differ from most other program accounts. Such differences are listed below.

Fiscal Year
The fiscal year for all County 4-H Association accounts shall be from September 1 through August 31. 4-H foundations are encouraged to follow the same fiscal year, but may vary provided all financial reporting is completed within the same time frame (e.g., year-end reports and IRS Form 990 filed within 60 days).

Financial Review of 4-H Accounts
Agents and oversight committees conducting financial reviews of groups holding 4-H accounts should follow the guidelines set forth in the EDIS publication “Procedures for Handling 4-H Accounts: Audits (4-H 5.4).”

Reporting Review Findings for County 4-H Association and Foundation Accounts
The appropriate officers or committee chairs of each 4-H group should prepare their respective accounts for review and gather any requested reports and supporting documentation.  These reports should be submitted to the 4-H Agent and oversight committee for financial review; findings should be reviewed and approved by the CED, and then returned to the 4-H Agent for filing.

The county 4-H agent will be responsible for submitting to the State 4-H Headquarters the appropriate report(s) for each County 4-H Association or foundation within 60 days of the end of its fiscal year (Oct. 31), or at an earlier date established by the 4-H Agent and CED. These reports can be found online at http://florida4H.org/staff/taxexempt.

IRS Form 990 Series Tax Return
Each county 4-H Association and/or foundation should complete the appropriate IRS 990 series tax return within 60 days of the end of its fiscal year. CEDs and county 4-H agents may set a date earlier than this deadline. Proof of filing a 990 form is included in the annual year-end reports submitted to the State 4-H Headquarters. For more information about IRS 990 Series tax returns, please see the chapter on that topic contained in the “Florida 4-H Implementation Guide to Maintain Tax Exempt Status in Your County Program” (http://florida4H.org/staff/taxexempt).

Maintaining Records
As mentioned above in “General Practices,” County Extension Offices should retain their review records for seven (7) years for all accounts reviewed. These records include your county’s audit or financial review form and copies of supporting documents, such as bank statements, ledgers, receipts, checks, etc., for all accounts held by the 4-H Association or Foundation in your county.

h.      Additional Procedures for 4-H Accounts to Maintain Group Exemption Inclusion:
Maintaining inclusion in the University of Florida’s group ruling (GEN) is not automatic. Some annual maintenance is required to keep your tax exemption. Each county association (and/or foundation if acting as fiscal agent) must file a year-end report within 60 days of the end of its fiscal year that includes the following:

                                                   i.      Year-End Report Form – Includes updated address, current EIN, primary contact, copy of any changes to the association’s bylaws, and an updated list of association members.

                                                 ii.      Account Reports – The CED and/or the 4-H Agent should include on the Account Report(s) a statement including the following: An audit or financial review has been conducted for all 4-H accounts, any problems encountered, and steps taken to remedy any accounting problems.

i.         Receipt of Funds - Income receipts are required. Pre-numbered receipts including date, customer name, reason for receipt, amount received, type of transaction (cash, check, or credit card), name of the receiving party, signature of the person receiving the funds, and name of sub-account to which it is to be credited are required for every transaction. These components are found in most common receipt books available at an office supply store. Where feasible, a separation of duties should be maintained with regard to deposits and check-writing.

                                                   i.      Cash Handling and Deposit Procedures

1.       Collections on hand should not exceed $500. Deposits should be made within one business day when collections exceed this amount. Should collections include, credit card or debit/ATM card transactions, a deposit should be made on the next business day.

2.       All other collections shall be deposited no less frequently than weekly.

3.       The only exception to these policies is that all collections are to be deposited at the fiscal-year end regardless of amount.

                                                 ii.      Receipt books shall be retained as permanent records.

j.        Disbursement of Funds - All disbursements should be fully documented to provide a clear audit trail. Original invoices, receipts, and sales slips shall be part of the documentation to make expenditures from the account. The documentation will be kept on file for review until all final reports have been submitted at the end of the fiscal year.

                                                   i.      Only authorized members of advisory committees, County 4-H Associations or foundations may be signatories on Extension accounts.

                                                 ii.      Checks must not be signed by any Extension employee (whether University or county government), regardless of funding source.

                                                iii.      Checks greater than $500 must be signed by two people. No two signatories on an account should be related.

                                               iv.      Checks must be numbered and all voided checks must be kept.

                                                 v.      The CED is responsible for monitoring signature authority on all local county Extension accounts.

k.       Software – QuickBooks, Quicken or similar software shall be used to maintain all local accounts.

l.         Exceptions for County Governments Holding Extension Funds - Certain local county governments have fiscal policies for handling funds and are willing to process all local Extension funds through county accounts. To the extent that the University agrees to abide by all such fiscal policy guidelines and requirements of the county government in a particular district, said policies shall replace the foregoing policy. This option must be approved by the University administration on a case-by-case basis.

Frequently Asked Questions

Q1: How many accounts may a county have?
A1: A county program may have multiple bank accounts. The opening of additional accounts should be approved by the CED in consultation with the county agent.

Q2: How many 4-H accounts may a county have under my County Association?
A2: A county 4-H program may have multiple bank accounts, provided all are managed by the County
4-H Association, opened under its EIN, and approved by the CED in consultation with the 4-H Agent

Q3: Who will monitor the account?
A3: The county agent and an appointed oversight committee will be primary; the CED should review accounts at the end of the fiscal year or from time to time as necessary.

Q4: What about groups that counties help but are not officially Extension Accounts?
A4: No county faculty or staff person should be associated with outside accounts.

Q5: Can a County 4-H Association hold outside or other Extension program funds?
A5: No. The tax exempt status of your county 4-H Associations, is determined based on the mission and purpose statements in that organization’s founding documents. Holding the funds of other groups that may have a different mission and purpose jeopardizes the tax exempt status of your Association.

Q6: Can a County Extension Program Account hold outside funds?
A6: No.

Q7: Can I choose the bank where I will open an account?
A7: Yes. To simplify accounting, use the fewest number of banks possible. Local situations where a bank has been supportive of the program should be taken into consideration. The county agent and the applicable advisory committee working together shall select an acceptable bank.

Q8: Who prepares the financial report at the end of the fiscal year?
A8: The appropriate officers of each advisory committee should prepare their respective accounts for financial review and submit any accompanying reports. Reports should be submitted to the appropriate county agent, reviewed and approved by the CED, and then submitted to the DED for filing.

Q9: Who prepares the 4-H Association or Foundation’s financial reports at the end of the fiscal year?
A9: The appropriate members of the County 4-H Association or foundation should prepare their respective accounts for review and submit the accompanying year-end report. Reports should be submitted to the 4-H Agent, reviewed and approved by the CED, and then returned to the 4-H Agent for filing. The 4-H Agent must provide a copy of the year-end report(s) and proof of audit to State 4-H Headquarters by October 31.

Q10: How will following a standard system for handling Extension funds help the county office?
A10: All counties across Florida will follow the same financial management policy for Extension funds that has been approved by Extension administration. It will give county agents greater authority in managing their funds and will provide for greater accountability and transparency in fundraising and fiscal management.

Q11: Will state rules regarding travel and reimbursement apply to these accounts?
A11: Yes. State guidelines and policies applicable to travel and reimbursement will apply.

Q12: Can travel expenses be paid from these accounts?
A12: Yes. When processing travel reimbursement requests from faculty and staff, as well as volunteers, advisory groups should strive to follow established university and IRS guidelines and policies for travel reimbursement. Exceptions to these policies and guidelines can be made at the discretion of the CED.