CLUB ACCOUNTINGBEST PRACTICES

JENNIFER STEPHENS

TAMMIE HILL

TOPICS TO BE COVERED

• Best Practices for Auburn Clubs’ Financial Activities

• Bank Accounts and Financial Transactions

• Financial Statements

• Special Events

• IRS Form 990

• Club Annual Report

GENERAL INTERNAL CONTROLS

• Address club risk of misappropriation of funds

• Establish internal controls

• Monitor club receipts and disbursements are properly recorded

• Treasurer – Accounting / Finance / Banking Professionals

• Employer Identification Numbers (EIN)

• Bank account should be set up under the club’s EIN

• Apply for EIN at www.irs.gov

BANK ACCOUNTS

• Dual signatures and/or dollar limits • President and Treasurer

• Treasurer and Co-Treasurer

• Large clubs $500

• Small clubs $250

• Bank Reconciliations

• Prepared monthly by Treasurer

• Reviewed by President

BANK ACCOUNTS

• Presidents should periodically open bank statements before

the Treasurer reconciles the bank account (review check

images)

• Online Banking – President review transactions on a

monthly basis

• Club credit cards and debit cards are a risk

FINANCIAL TRANSACTIONS

• Paypal account transactions should be periodically

reviewed by Treasurer and another club officer

• Bank deposits should be made the next business day after

receiving funds

• Detailed invoices should be submitted to the Treasurer for

payment processing (ex. Amazon)

FINANCIAL STATEMENTS

• Recommend using QuickBooks

• Process checks

• Prepare bank reconciliations

• Prepare financial statements

• Other option is to use excel spreadsheets to record financial

transactions

• Financial Statements

• Prepared quarterly by Treasurer

• Reviewed by President and club’s board of directors

SPECIAL EVENTS

• Petty cash log

• Use to track cash transactions

• Two or more people should count monies before leaving events

• Documents confirming deposits should be presented at the next board

meeting

• Review state regulations before holding “Raffles” & “Game of

Skill”

• Club insurance policy

•Forms available on the online portal

FORMSPetty cash log

IRS 990 – FILING REMINDER

• 990 IRS filing requirements:

• Gross receipts ≤ $50,000 – 990N(e-postcard)

• Gross receipts >$50,000 but <$ 200,000 and total assets <$500,000

– 990EZ or 990

• Gross receipts ≥ $200,000 or total assets ≥ $500,000 – 990

• Returns must be filed by the 15th of the fifth month after

the club’s fiscal year end. (Example FYE12/31/2017;

due 5/15/2018.)

CLUB ANNUAL REPORT

• Financial Statement Section

• Balance Sheet

• Income Statement

• Due December 2018

AUCTIONSJENNIFER STEPHENS

TAMMIE HILL

TOPICS TO BE COVERED

•Auctions

•Auburn Alumni Association Auction Approval Process

•Auction Items

•Auction Forms

•After the Auction

•Summary

AUCTIONS

• Generally, the club conducts these activities,

collects and deposits the receipts, pays the related

costs and then sends the net proceeds to the

Auburn University Foundation (AUF) as a

contribution from the club.

• Since clubs are a 501(c)7 social club, they cannot

give a donor a tax deduction.

AUCTIONS

• The Auburn Alumni Association is a 501(c)3 tax-exempt entity and can give donors a tax deduction.

• The association can administer your clubs auctions so that donors can receive a tax deduction if applicable.

PROS AND CONS OF AN AUBURN ALUMNI ASSOCIATION ADMINISTERED AUCTION

Pros

• Donors may receive a tax

deduction for the portion paid

above the fair market value.

• Auburn Alumni Association

will issue tax receipts when

applicable.

Cons

• Auburn Alumni Association is

required to remit sales tax on

all auction items sold. This will

result in a decrease in your net

proceeds.

• Unless your auction items are

sold above the fair market

value, no tax deduction will be

given to the purchaser.

AUBURN ALUMNI ASSOCIATION

AUCTION APPROVAL PROCESS

• Auctions can be covered under the Auburn Alumni

Association’s 501(c)3 status

• Contact Steve Inabinet, before the auction is held (4 weeks).

• The following information will need to be obtained for each

auction:

Date and location of the auction

Solicitation materials used referencing the auction

AUBURN ALUMNI ASSOCIATIONAUCTION APPROVAL PROCESS

If your club will be using solicitation materials to promote your

silent auction, your materials should contain the following:

1. A specific statement of the charitable use of the auction proceeds. If

for the endowment, it must specifically state this. If split between

the endowment and the spendable fund, the division must be

specific, such as “divided equally between…” or “first $xx to the

spendable fund, with the balance to the endowment…”

2. Instructions indicating that checks be made payable to the “Auburn

Alumni Association”.

AUCTION ITEMSIn order for any portion of an auction purchase to be

considered a gift by the IRS, the purchaser must knowingly

have paid more than the fair market value. This can be

satisfied by:

A bid sheet listing the value (or)

A “catalog” listing and describing auction items and their value

Often a “minimum bid” is established for silent auctions. This is not the same as

the fair value.

ALUMNI ASSOCIATION ADMINISTERED AUCTIONS

Silent Auction Bid Sheet

This form is used during the auction, where purchasers record their name and bid amount. Also listed on the top of the form you will state the fair

market value of the auction item.

AUBURN ALUMNI ASSOCIATION ADMINISTERED AUCTIONS

Bid Summary Sheet

After the auction, you will complete the bid summary form. This form

identifies the purchaser, the purchase price, the item, and the item’s value.

All money submitted to the Auburn Alumni Association should balance to

this form.

AFTER THE AUCTION

Silent Auction Bid Sheets

Bid Summary Sheet (with payments attached)

Submit to Steve Inabinet

within 2 weeks of the auction.

steveinabinet@auburn.edu

334-844-2995

SUMMARY

• Direct contributions to a club’s scholarship should be made payable to Auburn University Foundation

• Silent auctions administered by the Auburn Alumni Association, checks should be made payable to the “Auburn Alumni Association”

• Contact Steve Inabinet four weeks prior to the auction, and an auction packet will be emailed to you

• After the auction, paperwork and money is to be turned into Steve Inabinet within two weeks of the auction