051811 meeting materials cover memo final · Zales asked whether there had been or will be new...

MEMO To: Foundation Board Members:

Dean Dietrich N. Lynnette McNeely Tricia Knight Hon. Glenn Yamahiro Lee Atterbury Joel Bailey Thomas Basting, Sr. Kristin Bergstrom John Bermingham Sarah Fry Bruch Jeff George Hon. Marc Hammer Robert Wachuta Nicholas Zales

From: De Ette Tomlinson, Executive Director Date: May 13, 2011 Re: Materials for the Wednesday, May 18, 2011 WisTAF Board meeting

The Wisconsin Trust Account Foundation Board of Directors will meet on

Wednesday, May 18, 2011 1:30 p.m. to 5:00 p.m.

Marshall Room Milwaukee Bar Association

424 E. Wells Street Milwaukee, WI

Board Meeting Materials (distributed via email pdf documents) Please find the following Board meeting materials online: May 13, 2011 Board Materials Cover Memo May 18, 2011 Board agenda February 16, 2011 Unapproved Board Minutes March 31, 2011 Balance Sheet March 31, 2011 Monthly IOLTA income report March 31, 2011 Budget vs. Actual by Class Proposed Bylaws Update WisTAF Lobbying Policy Proposed Grant Application Criteria 2012 Proposed Guiding Principles for Grant-Making Wisconsin Equal Justice Fund Letter 2010 Financial Statements – draft 2010 audit Letter to Board – draft 2010 audit Management Letter – draft 2010 audit Proposed Revisions to the WisTAF Finance Policies and Procedures manual Proposed Bank Certification Policy

Proposed Grantee ACH Disbursement Policy October 6, 2010 Approved Board Minutes The May 18, 2011 Executive Director's Report will be available prior to the Board meeting. Teleconference option You are highly encouraged to attend the meeting in person. However, if you can’t, please use the following toll-free number to dial into the meeting: 1-866-244-8528. The passcode is: 579855. If you have any questions, or need me to make any additional arrangements for you, please contact me toll-free at 1-877-749-5045 or in Madison at (608) 257-2841. Thank you!

825 Will iamson St., Suite A | Madison, WI 53703

phone: 608.257.6845 | toll-free: 877.749.5045 | fax: 608.257.2684

email: [email protected] | www.wistaf.org

Wisconsin Trust Account Foundation Board of Directors Meeting Wednesday, May 18, 2011

1:30 p.m. to 5:00 p.m. Marshall Room

Milwaukee Bar Association 424 E. Wells Street

Milwaukee, WI Teleconference information (WisTAF Board members & guest Jim Skoug only, please) Call-in phone number: (866) 244-8528 Access code: 579855

Agenda **Please note: at 2:00 p.m., the WisTAF Board will pause in its session in order to address the following Board items: Action item: WisTAF Bylaw Change Action item: Removal Without Prejudice of Bob Wachuta from the WisTAF Board At 2:15 p.m., the WisTAF Board welcomes Jim Skoug of Wegner LLP to report on WisTAF's 2010 audit findings.**

I. Call to Order and Welcome II. Public Comments (10 minutes)

III. Approval of February 16, 2011 WisTAF Board meeting minutes –

President Dietrich

IV. Officer/Committee Reports 1. President's Report– President Dietrich 2. Treasurer's Report/Finance & Investment Committee – Treasurer

Knight 3. Grants/Evaluation Committee – John Bermingham, Chair 4. Personnel Committee – Lynnette McNeely, Chair 5. Access to Justice Commission – Hon. Glenn Yamahiro 6. Executive Director's Report - Tomlinson

V. Old Business 1. 2011-2012 State Appropriation Update – President Dietrich 2. 2010-2011 TANF Funds Update – Tomlinson

3. 25th Anniversary Update – President Dietrich 4. WisTAF Lobbying Policy – John Bermingham 5. Grant Application Criterion Update – John Bermingham

VI. New Business 1. Wisconsin Equal Justice Fund Grants – John Bermingham – ACTION 2. Acceptance of 2010 Audit Findings – Treasurer Knight – ACTION 3. Revisions to WisTAF's Financial Policies & Procedures Manual –

Treasurer Knight – ACTION 4. Bank Certification Policy – Treasurer Knight – ACTION 5. Grantee ACH Disbursement Policy – Treasurer Knight – ACTION 6. Election of 2011-2012 Officers – John Bermingham – ACTION 7. 2011 WisTAF Board Appointees – President Dietrich 8. Recognitions – President Dietrich

VII. Adjournment Additional information: Refreshments will be available at the meeting

1

WISCONSIN TRUST ACCOUNT FOUNDATION, INC. Board of Directors Meeting

State Bar of Wisconsin, Madison, WI February 16, 2011

DRAFT MINUTES

Attending: Dean Dietrich, President; N. Lynnette McNeely, Vice President; Hon. Glenn Yamahiro, Secretary; Tricia Knight, Treasurer; Lee Atterbury; Joel Bailey; Thomas Basting, Sr.; John Bermingham; Sarah Fry Bruch; Hon. Marc Hammer; Nicholas Zales. Also attending were De Ette Tomlinson, Executive Director and Rebecca Murray, Program Manager Excused: Kristin Bergstrom; G. Jeffrey George Unexcused: Robert Wachuta Guests: Tom Cannon, Legal Aid Society of Milwaukee; Rosemary Elbert, Wisconsin Judicare; Dan Guinn, AIDS Network; Lance Jones, KidsMatter; Jason Mishelow, Centro Legal; Bobby Peterson, ABC for Health Meeting Materials:

February 16, 2011 Board Materials Cover Memo February 16, 2011 Board Agenda October 6, 2010 Unapproved Board Minutes 2010 WisTAF Review (Executive Director’s report) December 31, 2010 Balance Sheet December 31, 2010 Monthly IOLTA income report December 31, 2010 Budget vs. Actual 2009 v. 2010 Profit & Loss Comparison May 6, 2010 Approved Board Minutes

I. Call to Order

The meeting was called to order by President Dietrich at 1:33 p.m.

II. Public Comments No public comments were made.

III. Approval of Minutes

There were no corrections to the October 6, 2010 minutes. Upon a motion by Bermingham/Knight, the October 6, 2010 WisTAF Board meeting minutes were unanimously approved.

IV. Officer/Committee Reports A. President’s Report. President Dietrich deferred his report to “New Business” in conjunction with the

Executive Committee Report on its meeting with grantees.

B. Treasurer’s Report/Finance & Investment Committee. Treasurer Knight gave an overview of WisTAF’s 2010 financial statements – highlighting key figures such as the Foundation’s $1,494,000 investment fund balance, the unchanged $150,000 line of credit, and the excess in trust account interest income of $210,000 over budget. This surplus was offset by comparable interest project expenses.

Zales inquired as to the composition of the “Legal, Audit &Professional Expenses” line. Tomlinson responded that these are auditor and comparable interest consultant expenses.

2

Dietrich asked whether income figures are typically higher for December. Tomlinson responded that income is highest for those months in which the quarter ends (March, June, September, December) as a number of financial institutions choose to remit IOLTA payments on a quarterly basis. Knight commended WisTAF staff for doing an incredible job controlling costs during 2010, with most expenses falling in-line with or below budget.

C . Grants/Evaluation Committee. Nothing new to report.

D. Personnel Committee. Chair McNeely reported that the memo discussed at the October 6, 2010 Board

of Directors meeting will be forthcoming. E. Access to Justice Commission. Yamahiro reported that the Access to Justice Commission Board held a

meeting at Marquette University Law School on November 17, 2010, where a mission statement and statement of shared core values were refined. Committees were charged with meeting to flesh out action plans and budgets. Yamahiro serves on two committees: Public Awareness and Justice Education and Courts and Administrative Tribunals.

Basting questioned whether the Commission has taken up the process of beginning collaboration with Wisconsin’s business and foundation communities to pursue funding, as originally communicated in its pitch to Washington, D.C. players years ago. Yamahiro responded that he has not heard any reports on this. McNeely asked whether the Commission was looking at ways to address the courts’ effectiveness. Yamahiro responded that the Commission is still in its early stages and that this had not been looked at with much depth at this point. Zales asked whether there had been or will be new appointments to the Commission given the change in government resulting from the November 2010 elections. Yamahiro reported that he had not heard anything yet, but would report back.

F. Executive Director’s Report. Tomlinson thanked Board members for their assistance with the Prime

Partner campaign and reported that no new banks had joined the program as a result of the campaign at this point. However, 6 or 7 banks have joined the Prime Partner program as part of the 2011 self-certification campaign.

Tomlinson also reported that the 2011 financial institution self-certification process is going smoothly with only 57 banks having not responded as of the February 15 deadline. Of those who have, the majority are in alignment and will be added to the List of Eligible Participating Financial Institutions. Staff is on pace to have all certifications verified by April 1. Dietrich questioned whether it would be wise to reconnect with the Wisconsin Bankers Association regarding the certification process and to gather any feedback they would like to share. Tomlinson will follow-up. Attendees were reminded of WisTAF’s 25th Anniversary Reception to be held at 3:15 p.m. on Friday, March 4 in conjunction with the Wisconsin Equal Justice Conference. Tomlinson reported that the next WisTAF Board of Directors meeting is scheduled for May, however, bylaws state the WisTAF Board must meet during the week of the State Bar’s annual meeting in the same city. While the State Bar’s annual meeting format has changed, it appears that the official “annual meeting” of the State Bar will take place June 8-10, 2011 in the Wisconsin Dells (Kalahari). Discussion took place on whether the WisTAF BOD should meet in conjunction with the June State Bar meeting or whether the WisTAF bylaws should be amended. The Board decided to develop proposed bylaw language addressing this issue and to keep the May 18, 2011 meeting date for the time being.

3

Murray reported that she attended the IOLTA Workshops held in conjunction with the ABA’s Mid-Year Meeting in Atlanta – February 10-11. The Workshops provided an excellent forum for the exchange of best practices with IOLTA colleagues across the nation, as well as a legislative update on LSC funding from LSC President Jim Sandman and NLADA Director of Civil Legal Services Don Saunders.

V. Old Business A. 2011-2012 State Appropriation Update. Dietrich reported that there is no news from the State Dept. of

Administration regarding the 2011-2012 low-income civil legal services state appropriation. The Governor’s budget will not be released until next week although cuts are anticipated to be deep. WisTAF will try to remain “under the radar” for grant funding purposes.

Bermingham questioned whether any board members have relationships with anyone within the legislature who can keep the WisTAF Board advised. Tomlinson suggested that she could check-in with State Bar Public Relations Director Lisa Roys after the budget is released.

B. 2010-2011 TANF Funds Update. Tomlinson reported that since we did not have success accessing the

funds last year, she would wait for the release of the budget to initiate contact with the Dept. of Children and Families.

C. 25th Anniversary Update. Staff is working jointly with the State Bar’s Legal Assistance Committee on

the March 4, 2011 reception planning. If Board members are planning on attending the Wisconsin Equal Justice Conference, they should register separately for that program through the State Bar. Those attending the reception should rsvp to the WisTAF office to receive information on parking and access given security measures being undertaken at Marquette Law School.

VI. New Business

A. Executive Committee Report – Meeting with Grantees. Dietrich summarized the January 25, 2011 Executive Committee meeting with grantees, referencing a set of materials containing a January 26 memo from Dietrich to the WisTAF Board of Directors and subsequent email correspondence received from Tom Cannon (Legal Aid Society of Milwaukee). [Copies of the materials were made available to attendees, and are attached to these meeting minutes as part of WisTAF’s official records.] Dietrich reported that the meeting with grantees conveyed useful information and that the Executive Committee is interested in hearing thoughts and comments – including direction on future action, if any, from the rest of the Board.

Yamahiro commented that while he wasn’t at the meeting with grantees, he has reviewed the correspondence and spoken with fellow Executive Committee members regarding the issues raised by Tom Cannon (in the attached memos). He then reported that during his three years on the WisTAF Board, his experience has been that the WisTAF Board has always been open and receptive to receiving suggestions on substantive process improvements. He recalled a situation in which a grantee raised the issue of concerns over funding decisions in light of overlapping services and that WisTAF would be looking into this. Judge Yamahiro shared his view that there is a difference between constructive dialogue and reckless assertions against WisTAF’s integrity and competence, and that he takes issue with the following assertions made by Cannon:

“Lack of transparency.” Yamahiro perceives an undercurrent of paranoia in the assertion that WisTAF activities lack transparency due to the fact that the WisTAF Board, at times, engages in the common practice of holding closed sessions. He would like to see Mr. Cannon’s proof regarding his suggestion that WisTAF may be in violation of Open Meetings laws. Yamahiro also pointed out that WisTAF’s “no contact rule” during the grant-making process is properly designed to prevent undue influence by grant applicants.

“Backroom logrolling and special pleading.” Yamahiro called this assertion a total falsehood and challenged Mr. Cannon to provide evidence of such activity.

4

“Lacking in leadership.” Yamahiro expressed his view that in his many experiences as a board member for a variety of groups, he has never worked with a more conscientious, committed group of individuals. During his tenure on the WisTAF Board, he has worked under the board presidencies of Earl Munson, John Bermingham, and Dean Dietrich and at no time has the Board been lacking in leadership. Yamahiro also takes issue with Cannon’s assertion that the WisTAF Board is unqualified – lacking competency in poverty law. Personally, Judge Yamahiro feels minimally qualified based on his time on the Bench, his volunteer activities at a domestic violence shelter, and other germane experiences.

Yamahiro stated that the WisTAF Board has full confidence in all grantees based on information consistently collected via site visits, reports, applications, and experiences with the grantees. Cannon’s accusations have no basis in fact, and while he is unsure as to the real intent of Cannon’s commentary, the WisTAF Board will not be intimidated nor bullied by the elitism or arrogance on the part of some grantees who feel they are the only ones qualified to know what process and decisions should undertaken.

Basting concurred with Yamahiro’s comments and stated that he was personally offended by Cannon’s accusations. He also pointed out that, in his opinion, the breach of fiduciary responsibility accusation comes close to an accusation of committing a crime. Without backing up his assertions with facts, Cannon’s comments are reckless and surprising. Basting stated that he understands legitimate criticisms and welcomes the opportunity to objectively review standards, how grants are made, etc. as grantees bring concerns to the Board. Now it’s time for the Board to move on and do its job. Bermingham reported that in his time on the WisTAF Board and as Chair of the Grants/Evaluation Committee, the granting process has not changed significantly. While he finds the emails to be disturbing, he suggests there is a need to move forward and take a constructive look at addressing the concerns by calling a meeting of the Grants/Evaluation Committee to discuss future efforts. Bermingham asked staff to prepare a compilation of granting standards used by other IOLTA programs for review. Dietrich asked staff to prepare a list of issues expressed by grantees at the January 25 meeting. McNeely concurred with comments made by Yamahiro and expressed her desire that the Board put the issues to rest and move forward with continuing to identify and implement best practices in the ongoing effort toward continuous improvement. Bruch asked whether any grantees had shared their ideas on the meaning of “quality” in civil legal service provision. Dietrich responded that he had received responses and that they would be made available to the Grants/Evaluation Committee. Bermingham suggested that the Board may need to address the “no lobbying” rule at the next Board meeting.

B. 2009-2010 Administrative Review Report. Tomlinson gave a summary of the administrative highlights

from the past year, referencing her 2010 WisTAF Review report – contained in the meeting materials. The report highlighted budget outcomes and administrative efficiencies and accomplishments in the areas of IOLTA management (including comparable interest), grants management, and outreach. Discussion followed on the use of the WisTAF website for information sharing, website security and the potential for recouping development costs via sales of e-tools and/or programs to peers within the IOLTA community.

5

C. 2010 Site Visit Process Reminder. Bermingham reminded Board members that, as in the past, site visits will be scheduled for April, May and June. WisTAF staff will be contacting each member along with each grantee to determine specific availability.

VII. Adjournment

Meeting was adjourned at 3:35 p.m.

Approved on:

Signed by: ____________________________________________ Date Signed: _______________________

Mar 31, 11

ASSETSCurrent Assets

Checking/Savings1010 · M & I Bank-Lock Box 359,611.12

Total Checking/Savings 359,611.12

Other Current Assets1100 · Investment Fund-At Market 1,550,167.86

Total Other Current Assets 1,550,167.86

Total Current Assets 1,909,778.98

Fixed Assets1310 · Computer & Office Equipment 6,776.801311 · Accumulated Depreciation -6,423.44

Total Fixed Assets 353.36

Other Assets1350 · Security Deposit 500.001370 · Unemployment Comp Assurance CD 1,600.00

Total Other Assets 2,100.00

TOTAL ASSETS 1,912,232.34

LIABILITIES & EQUITYLiabilities

Current LiabilitiesOther Current Liabilities

2004 · M&I Line of Credit Used 150,000.00

Total Other Current Liabilities 150,000.00

Total Current Liabilities 150,000.00

Total Liabilities 150,000.00

Equity3100 · Net Assets -Designated 1,153,000.003900 · Undesignated Funds 984,250.15Net Income -375,017.81

Total Equity 1,762,232.34

TOTAL LIABILITIES & EQUITY 1,912,232.34

3:38 PM Wisconsin Trust Account Foundation, Inc.

05/06/11 Balance SheetCash Basis As of March 31, 2011

Page 1

IOLTA REVENUE ANALYSIS 2003-2010

Month 2003 2004 2005 2006 2007 2008 2009 2010 2011

January 175,553 91,056 113,898 189,865 208,126 165,080 54,578 40,086 55,920 February 108,335 47,936 94,657 139,305 191,786 118,105 28,793 51,338 32,058 March 84,859 52,527 75,847 129,380 159,322 76,207 21,198 42,653 25,940

FIRST QUARTER 368,747 191,519 284,402 458,550 559,233 359,392 104,569 134,077 113,918

April 115,635 77,158 130,575 179,691 190,600 99,058 35,758 69,216 May 91,998 62,527 104,671 137,677 159,632 82,485 20,204 42,101 June 88,640 56,896 112,517 159,700 158,749 66,323 20,137 31,814

SECOND QUARTER 296,273 196,581 347,763 477,067 508,981 247,866 76,098 143,130 -

July 116,935 90,604 148,492 194,992 169,783 81,584 39,238 49,673 August 69,538 66,888 135,733 158,190 188,331 54,583 22,083 37,940 September 56,075 70,703 131,445 156,335 178,120 68,121 19,472 26,146

THIRD QUARTER 242,548 228,195 415,670 509,518 536,233 204,288 80,793 113,760 -

October 82,656 97,052 156,475 197,179 181,204 91,725 35,189 53,633 November 55,803 76,236 136,676 157,828 129,086 61,832 24,326 33,175 December 53,760 79,725 140,438 183,007 123,783 37,307 24,155 32,243

FOURTH QUARTER 192,219 253,013 433,590 538,014 434,073 190,864 83,670 119,051 -

FISCAL YEAR 1,099,787 869,308 1,481,425 1,983,149 2,038,520 1,002,409 345,130 510,019 113,918

SUM TOTAL 25,341,042 26,210,350 27,691,775 29,674,924 31,713,444 32,715,853 33,060,984 33,571,003 33,684,921

5/6/2011 Page 1

Foundation

Jan - Mar 11 Budget $ Over Budget % of Budget

Ordinary Income/ExpenseIncome

4010 · Trust Account Interest Income 113,921.00 500,000.00 -386,079.00 22.8%4100 · Investment Income 55,969.374300 · Interest Income 105.31 300.00 -194.69 35.1%4700 · Public Interest LS Fund 0.004800 · State Appropriation income 0.00

Total Income 169,995.68 500,300.00 -330,304.32 34.0%

Expense5010 · Grant Awards

5011 · Foundation Grant awards 70,750.00 250,000.00 -179,250.00 28.3%5030 · Public Interest LS fund 0.005040 · State Appropriation Grants 0.00

Total 5010 · Grant Awards 70,750.00 250,000.00 -179,250.00 28.3%

5100 · Office Expense5102 · Office Overhead 1,608.50 4,000.00 -2,391.50 40.2%5103 · Office Rent 6,126.00 19,000.00 -12,874.00 32.2%5104 · Office Supplies 678.57 1,500.00 -821.43 45.2%5105 · Postage & Mail Expenses 949.92 2,500.00 -1,550.08 38.0%5106 · Printing 0.00 600.00 -600.00 0.0%5107 · Telephone 1,234.28 4,200.00 -2,965.72 29.4%5108 · Utilities 405.00 2,700.00 -2,295.00 15.0%5111 · Board and Committee Expenses 322.40 1,500.00 -1,177.60 21.5%5112 · Travel and Meeting Expenses 557.19 2,000.00 -1,442.81 27.9%5113 · Training and Conferences 949.09 2,000.00 -1,050.91 47.5%5114 · Memberships 150.00 200.00 -50.00 75.0%5120 · Salaries 31,442.14 128,240.00 -96,797.86 24.5%5121 · Employer FICA/Medicare 2,472.03 10,000.00 -7,527.97 24.7%5122 · Fringe Benefits 8,398.50 24,105.00 -15,706.50 34.8%5123 · Temporary Help 0.00 1,000.00 -1,000.00 0.0%5134 · Publicity and Public Relations 528.48 11,000.00 -10,471.52 4.8%5141 · Bank IOLTA Processing Charges 429.61 2,400.00 -1,970.39 17.9%5143 · Line of Credit Interest 1,875.00 7,600.00 -5,725.00 24.7%5144 · Bank Compliance 0.00 5,000.00 -5,000.00 0.0%5150 · Equipment, Maint & Support 3,034.50 6,000.00 -2,965.50 50.6%5151 · Depreciation 326.43 700.00 -373.57 46.6%5160 · Insurance 1,192.00 3,000.00 -1,808.00 39.7%


05/06/11 Profit & Loss Budget vs. ActualCash Basis January through March 2011

Page 1

Foundation


5170 · Legal, Audit & Professional Ex 1,350.00 9,000.00 -7,650.00 15.0%5180 · Miscellaneous Expenses 88.85 500.00 -411.15 17.8%

Total 5100 · Office Expense 64,118.49 248,745.00 -184,626.51 25.8%

Total Expense 134,868.49 498,745.00 -363,876.51 27.0%

Net Ordinary Income 35,127.19 1,555.00 33,572.19 2,259.0%

Net Income 35,127.19 1,555.00 33,572.19 2,259.0%



Page 2

Public Interest LSF



4010 · Trust Account Interest Income 0.004100 · Investment Income 0.004300 · Interest Income 0.004700 · Public Interest LS Fund 193,275.00 870,000.00 -676,725.00 22.2%4800 · State Appropriation income 0.00

Total Income 193,275.00 870,000.00 -676,725.00 22.2%


5011 · Foundation Grant awards 0.005030 · Public Interest LS fund 603,420.00 870,000.00 -266,580.00 69.4%5040 · State Appropriation Grants 0.00

Total 5010 · Grant Awards 603,420.00 870,000.00 -266,580.00 69.4%

5100 · Office Expense5102 · Office Overhead 0.005103 · Office Rent 0.005104 · Office Supplies 0.005105 · Postage & Mail Expenses 0.005106 · Printing 0.005107 · Telephone 0.005108 · Utilities 0.005111 · Board and Committee Expenses 0.005112 · Travel and Meeting Expenses 0.005113 · Training and Conferences 0.005114 · Memberships 0.005120 · Salaries 0.005121 · Employer FICA/Medicare 0.005122 · Fringe Benefits 0.005123 · Temporary Help 0.005134 · Publicity and Public Relations 0.005141 · Bank IOLTA Processing Charges 0.005143 · Line of Credit Interest 0.005144 · Bank Compliance 0.005150 · Equipment, Maint & Support 0.005151 · Depreciation 0.005160 · Insurance 0.00



Page 3

Public Interest LSF


5170 · Legal, Audit & Professional Ex 0.005180 · Miscellaneous Expenses 0.00

Total 5100 · Office Expense 0.00

Total Expense 603,420.00 870,000.00 -266,580.00 69.4%

Net Ordinary Income -410,145.00 0.00 -410,145.00 100.0%

Net Income -410,145.00 0.00 -410,145.00 100.0%



Page 4

State Appropriation



4010 · Trust Account Interest Income 0.004100 · Investment Income 0.004300 · Interest Income 0.004700 · Public Interest LS Fund 0.004800 · State Appropriation income 0.00 2,546,100.00 -2,546,100.00 0.0%

Total Income 0.00 2,546,100.00 -2,546,100.00 0.0%


5011 · Foundation Grant awards 0.005030 · Public Interest LS fund 0.005040 · State Appropriation Grants 0.00 2,546,100.00 -2,546,100.00 0.0%

Total 5010 · Grant Awards 0.00 2,546,100.00 -2,546,100.00 0.0%

5100 · Office Expense5102 · Office Overhead 0.005103 · Office Rent 0.005104 · Office Supplies 0.005105 · Postage & Mail Expenses 0.005106 · Printing 0.005107 · Telephone 0.005108 · Utilities 0.005111 · Board and Committee Expenses 0.005112 · Travel and Meeting Expenses 0.005113 · Training and Conferences 0.005114 · Memberships 0.005120 · Salaries 0.005121 · Employer FICA/Medicare 0.005122 · Fringe Benefits 0.005123 · Temporary Help 0.005134 · Publicity and Public Relations 0.005141 · Bank IOLTA Processing Charges 0.005143 · Line of Credit Interest 0.005144 · Bank Compliance 0.005150 · Equipment, Maint & Support 0.005151 · Depreciation 0.005160 · Insurance 0.00



Page 5

State Appropriation


5170 · Legal, Audit & Professional Ex 0.005180 · Miscellaneous Expenses 0.00

Total 5100 · Office Expense 0.00

Total Expense 0.00 2,546,100.00 -2,546,100.00 0.0%

Net Ordinary Income 0.00 0.00 0.00 0.0%

Net Income 0.00 0.00 0.00 0.0%



Page 6

TOTAL



4010 · Trust Account Interest Income 113,921.00 500,000.00 -386,079.00 22.8%4100 · Investment Income 55,969.37 0.00 55,969.37 100.0%4300 · Interest Income 105.31 300.00 -194.69 35.1%4700 · Public Interest LS Fund 193,275.00 870,000.00 -676,725.00 22.2%4800 · State Appropriation income 0.00 2,546,100.00 -2,546,100.00 0.0%

Total Income 363,270.68 3,916,400.00 -3,553,129.32 9.3%


5011 · Foundation Grant awards 70,750.00 250,000.00 -179,250.00 28.3%5030 · Public Interest LS fund 603,420.00 870,000.00 -266,580.00 69.4%5040 · State Appropriation Grants 0.00 2,546,100.00 -2,546,100.00 0.0%

Total 5010 · Grant Awards 674,170.00 3,666,100.00 -2,991,930.00 18.4%

5100 · Office Expense5102 · Office Overhead 1,608.50 4,000.00 -2,391.50 40.2%5103 · Office Rent 6,126.00 19,000.00 -12,874.00 32.2%5104 · Office Supplies 678.57 1,500.00 -821.43 45.2%5105 · Postage & Mail Expenses 949.92 2,500.00 -1,550.08 38.0%5106 · Printing 0.00 600.00 -600.00 0.0%5107 · Telephone 1,234.28 4,200.00 -2,965.72 29.4%5108 · Utilities 405.00 2,700.00 -2,295.00 15.0%5111 · Board and Committee Expenses 322.40 1,500.00 -1,177.60 21.5%5112 · Travel and Meeting Expenses 557.19 2,000.00 -1,442.81 27.9%5113 · Training and Conferences 949.09 2,000.00 -1,050.91 47.5%5114 · Memberships 150.00 200.00 -50.00 75.0%5120 · Salaries 31,442.14 128,240.00 -96,797.86 24.5%5121 · Employer FICA/Medicare 2,472.03 10,000.00 -7,527.97 24.7%5122 · Fringe Benefits 8,398.50 24,105.00 -15,706.50 34.8%5123 · Temporary Help 0.00 1,000.00 -1,000.00 0.0%5134 · Publicity and Public Relations 528.48 11,000.00 -10,471.52 4.8%5141 · Bank IOLTA Processing Charges 429.61 2,400.00 -1,970.39 17.9%5143 · Line of Credit Interest 1,875.00 7,600.00 -5,725.00 24.7%5144 · Bank Compliance 0.00 5,000.00 -5,000.00 0.0%5150 · Equipment, Maint & Support 3,034.50 6,000.00 -2,965.50 50.6%5151 · Depreciation 326.43 700.00 -373.57 46.6%5160 · Insurance 1,192.00 3,000.00 -1,808.00 39.7%



Page 7

TOTAL


5170 · Legal, Audit & Professional Ex 1,350.00 9,000.00 -7,650.00 15.0%5180 · Miscellaneous Expenses 88.85 500.00 -411.15 17.8%

Total 5100 · Office Expense 64,118.49 248,745.00 -184,626.51 25.8%

Total Expense 738,288.49 3,914,845.00 -3,176,556.51 18.9%

Net Ordinary Income -375,017.81 1,555.00 -376,572.81 -24,116.9%

Net Income -375,017.81 1,555.00 -376,572.81 -24,116.9%



Page 8

{W0283036.0283375.DOC\1} -1-

Bylaws of the Wisconsin Trust Account Foundation, Inc.

Chapter I

Identification Section 1. Name. The name of the corporation is WISCONSIN TRUST ACCOUNT

FOUNDATION, INC. Section 2. Location. The principal offices of the corporation shall be at a location as

designated from time to time by the board of directors. Section 3. Fiscal Year. The fiscal year of the corporation shall end on such date as

established by the board of directors. Section 4. Seal. The seal of the corporation, if one is adopted by the board of directors, shall

have inscribed thereon its name and the word “Seal.” Section 5. Nature of the corporation. The corporation is a nonstock, nonprofit corporation

organized under Chapter 181 of the Wisconsin Statutes. No part of its net earnings shall enure to the benefit of its directors of officers.

Chapter Il

Purposes; Powers

The corporation is organized exclusively for charitable and education purposes within the meaning of Section 501(c)3 of the Internal Revenue Code of 1986, as amended, (or corresponding provisions of any future Federal Internal Revenue Laws) and shall accept grant applications and make grants or expenditures of funds received under Wisconsin Supreme Court Rules 13.045 and 20:1.15 for any of the following purposes:

1. To aid the courts and improve the administration of justice by providing legal

services to persons of limited means in non-criminal matters. 2. To fund programs for the benefit of the public as may be specifically approved

from time to time by the Supreme Court for exclusively public purposes. 3. To pay the responsible and necessary expenses of the board and other costs

reasonably and necessarily incurred for the administration of the program, including the employment of staff for that purpose.

This corporation shall have and may exercise the powers authorized by the Wisconsin

Statutes which are necessary to effectuate its declared purposes.

{W0283036.0283375.DOC\1} -2-

Chapter III

Board of Directors Section 1. Size; Composition. The affairs of this corporation shall be managed by a board of

fifteen (15) directors composed of three (3) judges, three (3) nonlawyers, and nine (9) lawyers. The Chief Justice of the Supreme Court of Wisconsin shall appoint the three judges. The President of the Wisconsin State Bar shall appoint, with the approval of the Wisconsin State Bar Board of Governors, the nine attorney and three nonlawyers board members.

Section 2. Qualifications of Lawyer Directors. The lawyer directors shall be members in

good standing of the Wisconsin State Bar. Section 3. Terms. The terms of one-third of the initial board shall expire at the time of the

first annual meeting in 1987, another third at the time of the first annual meeting in 1988, and the balance at the annual meeting of 1989, such initial terms to be so established that those expiring in each of the three years shall, so far as practical, be proportional as between judges, nonlawyers and lawyers. Thereafter, the terms of attorney and nonlawyer directors shall be for three (3) years, and judges shall be for two (2) years, beginning the first day of the month following the Annual meeting, or until their successors are elected and qualified, and one-third of such terms shall expire annually. No person may serve more than two (2) full terms consecutively.

Section 4. Removal. Any director may be removed from office by a two-thirds vote of the

directors present at a duly called directors meeting at which a quorum is present. The director involved shall have written notice of his/her intended removal from office, mailed at least ten (10) days prior to the date on which the board meets to consider such matter. The removal of a director shall be without prejudice to the contract rights, if any, of the person so removed. Election to the board shall not of itself create contract rights.

Section 5. Conflict of Interest. Shall be governed by 181.0831, Stats. or corresponding

provisions of any future Wisconsin statutes. Section 6. Meetings.

(a) Place of Meetings. Meetings of the board of directors, regular or special, may be held either within or without the State of Wisconsin.

(b) Time and Notice of Meetings. The board of directors shall hold an annual meeting during the week of the first summer meeting of the Wisconsin State Bar in each year and in the same city. Other regular meetings may be held at the time fixed by the board.

{W0283036.0283375.DOC\1} -3-

Special meeting shall be held on call of the President, or at the request of any four (4) directors, on notice of no less than five (5) days. Notice of any meetings of the board shall be in writing and may be waived in writing at any time, whether signed before or after the time stated therein, and such waivers shall be equivalent to the giving of full notice.

(c) Attendance; Notice of Business. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends said meeting and objects to the transaction of any business because such meeting is not lawfully convened. Except as expressly required by other provisions of these bylaws, neither the business to be transacted at, nor the purpose of, any meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

(d) Quorum, Act of the Directors. A majority of the directors in office at any particular time shall constitute a quorum for the transaction of the business and affairs of the corporation. The act of the majority of directors present at a meeting at which a quorum is present shall be the act of the board. There shall be no proxy voting.

(e) Consent Without Meeting. Any action required or permitted by the Articles of Incorporation or Bylaws or any provision of law to be taken by the board at a meeting by resolution may be taken without a meeting if consent in writing, setting forth the action so taken, shall be signed by all of the directors then in office.

(f) Meetings by Means of Communication Devices. To the extent permitted by law, any or all directors may participate in a regular or special by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously in a meeting by this mean is deemed to be present in person at the meeting.

Chapter IV

Officers Section 1. Officers. The principal officers of the corporation shall be a President, a

President elect, a Secretary, and a Treasurer. The board may, by amendment of these bylaws or by resolution, provide for such other officers and assistant officers as may be deemed necessary, to be elected or appointed at the Foundation’s annual meeting or such time and for such terms as the board may determine.

Section 2. Qualifications; Election, and Term. The principal officers shall be elected by the

board at its annual meeting, for terms of one year each. The Board President may

{W0283036.0283375.DOC\1} -4-

serve no more than two consecutive terms. Each such officer shall hold office until a successor has been chosen and qualified, until his/her death, until he/she shall have resigned, or until he/she shall have been removed in the manner provided in these bylaws, whichever may first occur.

Section 3. Duties of Principal Officers.

(a) President. The President shall be the chief administrative officer and act as chairperson of the corporation and shall have such duties, responsibilities and powers as may be necessary to carry out the directions and policies of the board of directors or prescribed in these bylaws or otherwise delegated by the board of directors and shall at all times be subject to the policies, control and direction of the board of directors. The president may sign and execute, in the name of the corporation, any instrument or document consistent with the foregoing general delegation of authority or any other instrument or document specifically authorized by the board of directors, except when the signing and execution thereof shall have been expressly delegated by the board of directors or by these bylaws to some other officer or agent of the corporation provided, that neither the president nor any other officer may sign any deed or instrument of conveyance or endorse any security or execute any checks, drafts, or other orders for payment or money, notes, acceptances, or other evidence of indebtedness without the specific authority of the board of directors pursuant to resolution dealing with such matters. The president shall, whenever it may in the president’s opinion be necessary, prescribe the duties of other officers and employees of the corporation, in a manner consistent with the provisions of these bylaws and the directions of the board of directors.

(b) President Elect. In the absence or disability of the president, the president elect shall perform the duties of the president, and when so acting shall have all the powers of, and be subject to all the restrictions on, the president. The president elect shall have such other powers and perform such other duties as may be prescribed from time to time by the board of directors, or these bylaws.

(c) Secretary. The secretary shall:

(1) Certify and keep at the principal office of the corporation the original or a copy of its articles of incorporation and bylaws, as amended or otherwise altered to date.

(2) Keep at the principal office of the corporation or such other place as the board of directors may direct, a book of minutes of all meetings of the members of the corporation, the board of directors and committees thereof, with the time and place of holding,

{W0283036.0283375.DOC\1} -5-

whether regular or special and, if special, how authorized, the notice thereof given, and the names of those present at the meeting.

(3) See that all notices are duly given in accordance with the provisions of these bylaws or as required by law.

(4) Be custodian of the records and of the seal of the corporation, if any, and see that it is engraved, lithographed, printed, stamped, impressed upon, or affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these bylaws.

(5) See that the books, reports, statements and all other documents and records required by law are properly kept and filed.

(6) Exhibits for inspection upon request the relevant books and records of the corporation to any member (if the corporation has members) for any proper purpose at any reasonable time.

(7) In general, perform all duties incident to the office of secretary, and such other duties as from time to time may be assigned by the board of directors.

(d) Treasurer. The treasurer shall perform or have performed under the

treasurer’s direction the following functions:

(1) Have charge and custody of, and be responsible for, all funds and securities of the corporation, and deposit all such funds in the name of the corporation in such banks, trust companies or other depositories as shall be selected by the board or directors.

(2) Keep and maintain adequate and correct accounts of the corporation’s properties and business transactions, including account of its assets, liabilities, receipts, disbursements, gains, losses, capital and surplus.

(3) Exhibit for inspections upon request the relevant books and records of the corporation to any member (if the corporation has members) for any proper purpose at any reasonable time.

(4) Render interim statements of the condition of the finances of the corporation to the board of directors upon request, and render a full financial report at the annual meeting of the board of directors and, if there are members, at the annual meeting of members.

{W0283036.0283375.DOC\1} -6-

(5) Receive, and give receipt for, moneys due and payable to the corporation from any source whatsoever.

(6) In general, perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to the treasurer by the board of directors.

Section 4. Removal. Any officer or agent elected or appointed by the board may be

removed by it whenever in its judgment the best interests of the corporation will be served thereby. The removal of an officer shall be without prejudice to the contract rights of an officer so removed. Election or appointment shall not of itself create contract rights.

Section 5. Executive Director. An executive director may be appointed by the board of

directors subject to responsibilities, terms, and conditions of employment to be specified by the board and reviewed annually.

Chapter V

Committees

1. Standing or Temporary Advisory Committee Without Board Authority. The board of directors or the president may authorize, and appoint or remove members (whether or not members of the board of directors), of standing and/or temporary committees to consider appropriate matters, make reports to the president and/or board of directors, and fulfill such other advisory functions as may be designated. The designation of such standing and/or temporary committees, and the members thereof, shall be recorded in the minutes of the board of directors.

2. Executive or Other Committee with Limited Board Authority. The board of directors may by appropriate resolution designate one or more directors elected by the board or directors, which to the extent provided in said resolutions or in these bylaws, shall have and may exercise, when the board of directors is not in session, the powers of the board of directors in the management of the affairs of the corporation, except action with respect to election of officers, approval or termination of grants, and the formation of and the filling of vacancies and committees with limited board authority pursuant to this subsection. The board of directors may elect one or more directors as alternate members of any such committee, who may take the place of any absent committee member or members at any meeting of such committee. The designation of such committee or committees and the delegation thereto of authority shall not operate to relieve the board of directors or any individual director of any responsibility imposed upon the board of directors or any individual director by law.

{W0283036.0283375.DOC\1} -7-

Chapter VI

Staff

The Board is authorized to appoint the executive director whose duties, terms of employment and compensation shall be fixed by the Board.

Chapter VII

Parliamentary Authority

The rule contained in the current edition of Roberts Rules of Order Newly Revised shall govern the corporation in all cases to which they are applicable and in which they are consistent with the Articles of Incorporation, these bylaws, and any special rules of order the corporation my adopt.

Chapter VIII

Indemnification Section 1. Action Not in Name of Corporation. The corporation shall indemnify any person

who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, member, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit of proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

Section 2. Action in Name of Corporation. The corporation shall indemnify any person who

was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director,

{W0283036.0283375.DOC\1} -8-

officer, member, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including the attorneys’ fees, actually and reasonably incurred by such person in connection with the defense of settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and expect that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjusted to the liable for negligence or misconduct in the performance of his/her duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 3. Successful Defense. To the extent that a director, officer, member, employee or

agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 or 2, or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by such person in connection therewith.

Section 4. Authorization of Indemnification Under Sections 1 or 2. Any indemnification

under Section 1 or 2, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, member, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or 2. Such determination shall be made:

(a). By the board of directors by a majority vote of a quorum consisting of

directors who were not parties to such action, suit or proceeding; or (b) If such a quorum is not obtainable, or, even if obtainable a quorum of

disinterested directors so directs, by independent legal counsel in a written opinion.

Section 5. Advances for Expenses. Expenses, including attorneys’ fees, incurred in

defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in Section 4 upon receipt of an undertaking by or on behalf of the director, officer, member, employee or agent to repay such amount unless it shall ultimately by determined that such person is entitled to be indemnified by the corporation as authorized in this section.

Section 6. Non-Exclusive. The indemnification provided by this article shall not be deemed

exclusive of any other rights to which those indemnified may be entitled under

{W0283036.0283375.DOC\1} -9-

any by-laws, agreement, vote of disinterested directors or otherwise, both as to action in any such person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, member, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 7. Insurance. The corporation may, upon resolution of its board of directors duly

adopted, purchase and maintain insurance on behalf of any person who is or was a director, officer, member, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this provision of the corporation’s bylaws.

Chapter IX

Amendments

Subject to Chapter 13 of the Wisconsin Supreme Court Rules, these bylaws may be amended by a two-thirds (2/3) vote of the total number of authorized directors at any regular or special meeting of the board, provided notice of the substance of such proposed amendment shall have been given to all directors in the notice of the meeting.

Duly adopted by the Wisconsin Trust Account Foundation, Inc., Board of Directors on May 28, 1986.

Amended: January 28, 2000; October 6, 2005

Document comparison by Workshare Professional on Monday, February 21, 2011 3:22:38 PM Input:

Document 1 ID file://W:\Client\42316\88888\W0283036.DOC Description W0283036 Document 2 ID file://W:\Client\42765\88888\W0283375.DOC Description W0283375 Rendering set standard no moves no numbers Legend:

Insertion

Deletion

Moved from

Moved to

Style change

Format change

Moved deletion

Inserted cell

Deleted cell

Moved cell

Split/Merged cell

Padding cell Statistics:

Count

Insertions 1

Deletions 3

Moved from 0

Moved to 0

Style change 0

Format changed 0

Total changes 4

G R A N T A P P L I C A T I O N E V A L U A T I O N C R I T E R I A WisTAF Mission and Grantmaking Philosophy

The Wisconsin Trust Account Foundation, Inc. (WisTAF) is dedicated to equal access to the civil justice system, funding legal services for low-income persons through the fair and effective administration of Interest on Lawyers’ Trust Accounts (IOLTA), Public Interest Legal Services Fund (PILSF) and other sources. In furtherance of this mission, the WisTAF Board of Directors annually awards grants to a broad array of publicly and privately funded agencies which provide civil legal services to low-income clients. WisTAF funds programs that address the particular needs and problems of various indigent groups, different geographical regions and special areas of public concern. Agency diversity, in terms of structure, service delivery methods, and sources of funds, is recognized and valued. As such, WisTAF sponsors agencies that provide free legal services as well as those which charge reduced fees for services, consistent with its position that there is room for both models in addressing the needs of Wisconsin’s low income population. WisTAF will not allocate grant funds to organizations to be used for criminal representation. The WisTAF Board believes that effective funding of grants can take place only in a climate free from political bias and outside interference. WisTAF strongly encourages the cooperation and collaboration of its grantees, and will continue to be guided by these principles as it awards future grants. Finally, the WisTAF Board reserves the right to change procedures and priorities for the grants program as community needs are identified and as resources change. Development and Use of Grant Application Evaluation Criteria

WisTAF’s evaluation of grant applications includes a systematic review of each application to determine whether the applicant meets the following criteria. These criteria were developed by the WisTAF Grants/Evaluation Committee in consultation with similar legal aid funders nationwide. They are based on WisTAF’s historical grantmaking experience as well as generally accepted standards for the operation of legal aid programs (e.g., the ABA Standing Committee on Legal Aid and Indigent Defendants’ publication, “Standards for the Provision of Civil Legal Aid”). WisTAF’s recognition that both the existence of and potential value in the diversity of legal aid providers – in terms of agency structure, service delivery methods, and sources of funds – is reflected in the resulting criteria. The WisTAF Board may, as circumstances warrant, develop temporary “guiding principles” to supplement existing application evaluation criteria during the grant decision process. These principles serve the purpose of guiding specific funding decisions in light of current relevant economic and societal challenges present at the time of grantmaking and/or anticipated over the course of the grant cycle. Guiding principles will be made available to potential grant applicants as part of the application process.

Description of Grant Application Evaluation Criteria

Attorney independence Has the applicant verified that its attorneys have full freedom to protect the basic interests of their clients in keeping with the Code of Professional Responsibility and the high standards of the legal profession? Cooperative efforts Has the applicant developed cooperative efforts with other organizations operating in the given service area wherever possible and practicable? Diversification of funding sources Does the applicant have sources of income in addition to the WisTAF funds requested? Can the organization demonstrate an effort or describe plans to tap into new funding sources? What percent of the organization’s total legal services budget would the requested WisTAF funds comprise? Innovation Can the applicant demonstrate development and implementation of innovative approaches to identifying and meeting the legal needs of Wisconsin's low-income population? Legal needs addressed Are the legal needs addressed by the applicant’s program critical needs for low-income individuals and families? Are these services unique or are they also addressed by other organizations serving the same client population and/or geographic area? Levels of service Does the organization provide appropriate levels of service (e.g., brief services, litigation) to effectively address client needs, based on its mission and priorities? Organizational strength Can the applicant demonstrate fiscal responsibility, program stability, effective governance and leadership? Provider effectiveness Does the organization attempt to measure and improve productivity in the area of client services? Does the applicant use delivery methods that appropriately balance efficiency, effectiveness and accessibility? Quality assurance Does the applicant have the ability to ensure the effective and efficient delivery of quality services or programs through the use of quality control systems and appropriately skilled/trained staff and volunteers? Are training and mentoring opportunities available for staff and/or volunteers? Use of volunteers / pro bono development Does the applicant make appropriate use of volunteers in case handling and other capacities? Does the organization have systems in place to recruit, train, support, monitor, recognize and retain volunteers? WisTAF grant receipt history Does the organization have prior history of successful use of past WisTAF grant funds?

G R A N T A P P L I C A T I O N E V A L U A T I O N 2 0 1 2 G U I D I N G P R I N C I P L E S

Due to the anticipated continuation of limited IOLTA income and the elimination of the Low-Income Civil Legal Services Appropriation funding by the State of Wisconsin, WisTAF has adopted the following guiding principles for 2012 grant decisions: Direct representation of clients and client groups WisTAF will give priority to applicants who request WisTAF funds for the direct representation of clients and/or client groups. Legal reform activities WisTAF also recognizes the considerable value contributed by agencies working on legal reform or other systemic legal issues (e.g., impact litigation, class action lawsuits) on behalf of the state’s most vulnerable residents. Statewide coverage WisTAF will make funding decisions aimed at ensuring statewide coverage of civil legal service availability. Individual grantees need not provide services across the state, however, the agency’s fit within the overall pattern of available services will be taken into consideration.

In light of site visit discussion/observations made by various members of the Board, the following possible principle warrants further discussion: Free legal services WisTAF will give priority to applicants who request WisTAF funds to aid in the provision of free legal services for clients and/or client groups.

Communication with Those Charged with Governance May 5, 2011 To the Board of Directors Wisconsin Trust Account Foundation, Inc. Madison, Wisconsin We have audited the financial statements of Wisconsin Trust Account Foundation, Inc. for the year ended December 31, 2010, and have issued our report thereon dated May 5, 2011. Professional standards require that we provide you with the following information related to our audit. Our Responsibility under Auditing Standards Generally Accepted in the United States of America As stated in our engagement letter dated January 12, 2011, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with modified basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our email about planning matters on April 13, 2011. Significant Audit Findings Qualitative Aspects of Accounting Practices

Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Wisconsin Trust Account Foundation, Inc. are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2010. We noted no transactions entered into by the WisTAF during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole.

Management Representations

We have requested certain representations from management that are included in the management representation letter dated May 5, 2011. Attached is a copy of management’s written representations. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the WisTAF’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the Board of Directors and management of Wisconsin Trust Account Foundation, Inc. and is not intended to be and should not be used by anyone other than these specified parties. Sincerely, Wegner LLP CPAs & Consultants Scott Haumersen, CPA Partner

Communication of a Significant Deficiency and Material Weaknesses May 5, 2011 To the Board of Directors Wisconsin Trust Account Foundation, Inc. Madison, Wisconsin In planning and performing our audit of the financial statements of Wisconsin Trust Account Foundation, Inc. as of and for the year ended December 31, 2010, in accordance with auditing standards generally accepted in the United States of America, we considered Wisconsin Trust Account Foundation, Inc.’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of WisTAF’s internal control. Accordingly, we do not express an opinion on the effectiveness of WisTAF’s internal control. Our Responsibilities Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be significant deficiencies or material weaknesses and, therefore, there can be no assurance that all such deficiencies have been identified. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls. However, as discussed below, we identified certain deficiencies in internal control that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies. It is important to note that deficiencies in internal control are not necessarily problems you will choose to address; however, they do represent potential risks. Our job as your auditors is to ensure that you understand where you have these deficiencies so that you can make informed business decisions on how best to respond to those risks. Definitions Related to Deficiencies in Internal Control A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Identified Deficiencies in Internal Control We consider the following deficiencies in WisTAF’s internal control, which were identified in the previous year, to be material weaknesses: Financial Close and Reporting Management is responsible for establishing and maintaining internal controls in the financial reporting system and for the fair presentation of the statements of assets, liabilities and net assets, revenue, expenses and changes in net assets, cash flows, and disclosures in the financial statements in conformity with the modified cash basis of accounting, which is a comprehensive basis of accounting other than

generally accepted accounting principles. We noted the absence of appropriate internal controls that would enable management to conclude that the financial statements and the related disclosures are complete and presented in accordance with the modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles.

Like many small organizations, the ability to produce in-house financial statements that incorporate the increasingly rigorous accounting requirements is beyond the duties originally contemplated of your accounting personnel. As a result, WisTAF’s management requested us to compile a draft of the financial statements and related notes as part of the audit. Although management reviews, approves, and accepts responsibility for the financial statements prior to their issuance, the absence of the ability to fully prepare the financial statements and evaluate the completeness of financial statement disclosures continues to be considered a material weakness because the potential exists that a material misstatement of the financial statements could occur and not be prevented or detected by WisTAF’s internal control prior to our involvement in assisting with the compilation of the financial statements and related notes. Segregation of Duties

The Executive Director performs or has the ability to perform all components of the internal control over disbursements. There is a lack of preventive controls such as “positive pay” and a lack of detective controls such as the review of the bank statement and check images by an individual independent of the check preparation process. A lack of segregation of duties does not adequately safeguard assets. We recommend that components of internal controls over disbursements be segregated wherever feasible. No one individual should perform or even have the ability to perform all components of the internal control over disbursements. The proliferation of numerous fraudulent check writing schemes has led many banks to offer positive pay, the latest in check fraud protection. The positive pay system works as follows: WisTAF electronically transmits to the bank a listing of the checks that have been issued including the check number, payee, and amount. The bank then compares the list to checks that are presented for payment. In the event that the information on a check presented for payment does not agree to the list of checks issued, the bank notifies the organization, which has the option to accept or reject the check for payment. The Executive Director or Deputy Director could have authority to transmit the listing of checks to the bank. To maintain adequate segregation of duties, the list of checks questioned by the bank should be sent to someone independent of the disbursements cycle for review. WisTAF is currently in the process of implementing positive pay preventive internal controls over disbursements. We consider the following deficiency in WisTAF’s internal control to be significant deficiency: Accounting and Financial Policies and Procedures Manual As part of our review of internal controls during the audit, we were provided a copy of WisTAF’s proposed Accounting and Financial Policies and Procedures Manual (Manual). Internal controls are designed to safeguard assets. Written procedures, instructions, and assignments of duties should prevent or reduce misunderstandings, errors, inefficient or wasted effort, duplicated or omitted procedures, and other situations that can result in inaccurate or untimely accounting information. A well-devised accounting manual can also help ensure that all similar transactions are treated consistently, that accounting principles used are proper, and that records are produced in the form desired by management. A good accounting manual should aid in the training of new employees of the accounting functions management performs. In the Audit and Internal Controls section, the Manual states, “The review of the annual audit and internal controls are two of the most important procedures the Board has for fulfilling its fiduciary responsibilities to

the Foundation.” We concur with this statement and to that end we recommend that the Board review the entire Manual. After the Manual has been reviewed and updated for any changes, we recommend that the Board formally approve and adopt the Manual. The Manual should then be reviewed at least annually for any updates or changes that may be necessary. This process should assist the Board in fulfilling its fiduciary responsibilities and help ensure internal control objectives are being met to adequately safeguard assets. The revised and updated Manual will be presented and expected to be approved by the board of directors at WisTAF's May 2011 board meeting. We will review the status of these comments during our next audit engagement. We have already discussed many of these comments and suggestions with various WisTAF personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations. This communication is intended solely for the information and use of management, board of directors, and others within Wisconsin Trust Account Foundation, Inc. and is not intended to be and should not be used by anyone other than these specified parties. Sincerely, Wegner LLP CPAs & Consultants Scott R. Haumersen, CPA Partner

\\Wistaf01\share\USERS\WisTAF\BOARD\Finance Commmittee\2011\051111 teleconference materials\2010 proposed update ACCOUNTING AND FINANCIAL POLICIES_2.doc\\Wistaf01\share\USERS\WisTAF\Corporate\board & agency policies\finance policies\2010 proposed update ACCOUNTING AND FINANCIAL POLICIES_2.doc

WISCONSIN TRUST ACCOUNT FOUNDATION

ACCOUNTING AND

FINANCIAL POLICIES & PROCEDURES MANUAL

(Update proposal September 2010May 2011)

Adopted January 28, 1998 Revised April 28, 1998; January 29, 1999; January 23, 2004; May 6, 2004;

August 19, 2004; September 29, 2005; April 11, 2006, September 26, 2007 (provisional upon updates of staff titles, transfer of whistleblower policy to personnel policies)

2

WISCONSIN TRUST ACCOUNT FOUNDATION ACCOUNTING AND FINANCIAL POLICIES

ACCOUNT RECONCILIATIONS............................................................................... 45 ACCOUNTING PROGRAM ACCESS & CONTROLS ............................................ 56 AIMIOLTA 2 DATABASE ACCESS........................................................................... 56 AIMIOLTA 2 DATABASE ACTIVATIONS AND INACTIVATIONS CONTROLS........................................................................................................................................... 56 ANNUAL LEAVE & PERSONAL TIME PAYMENTS............................................... 6 AUDIT AND INTERNAL CONTROLS....................................................................... 67 BASIS OF ACCOUNTING............................................................................................ 78 BID REQUIREMENTS.................................................................................................... 8 BOARD MEMBER REIMBURSEMENT AND MEETING EXPENSES................ 89 BONDING OF BOARD AND STAFF ............................................................................ 9 BUDGETING ................................................................................................................ 910 CHART OF ACCOUNTS .............................................................................................. 10 CHECK DISBURSEMENTS......................................................................................... 11 COMPUTER NETWORKING & BACKUP ........................................................... 1213 CONFLICT OF INTEREST.......................................................................................... 13 CONTRACT SIGNING AUTHORITY........................................................................ 14 CONTRIBUTIONS..................................................................................................... 1415 CONTROL OVER CHECKS & CASH ....................................................................... 15 CONTROL OVER AUTOMATED CLEARING HOUSE (ACH) TRANSMITTALS........................................................................................................................................... 16 COST ALLOCATION PLAN ....................................................................................... 17 CPA FIRMS: Audited Financial Statements ............................................................... 18 CPA FIRMS: The Engagement Letter ......................................................................... 19 CPA FIRMS: The Management Letter .................................................................... 1920 CREDIT CARD USE...................................................................................................... 20 DEBT................................................................................................................................ 21 EMPLOYEE REIMBURSEMENT .......................................................................... 2221 EQUIPMENT & DEPRECIATION ......................................................................... 2323 FINANCIAL STATEMENT PREPARATION AND DISTRIBUTION ............... 2423 GRANT AWARDS PROCESS – FOUNDATION GRANTS................................. 2424 GRANT DISBURSEMENT PROCESS – FOUNDATION GRANTS....................... 26 GRANT MONITORING & COMPLIANCE PROCESS – FOUNDATION GRANTS...................................................................................................................... 2626 GRANT CONTRACT, AWARDS, & COMPLIANCE MONITORING – NON-WISTAF RESTRICTED GRANTS & DONATIONS................................................. 27 GRANT RESERVE POLICY: Determining Grant Levels .................................... 2828 IBRETA REFUNDS/IOLTA OVERPAYMENT/REFUNDS................................. 2928 INSURANCE............................................................................................................... 3029 INVESTMENT POLICY ........................................................................................... 3130 IRS FORMS: Form 990.............................................................................................. 3231 LOANS PROHIBITED .............................................................................................. 3332 LOCK BOX MANAGEMENT.................................................................................. 3332

3

MAINTENANCE OF ACCOUNTING POLICIES AND PROCEDURES MANUAL....................................................................................................................................... 3433 NON-REMITTANCE REPORTING........................................................................ 3534 PREPARATION OF INFORMATIONAL RETURNS .......................................... 3635 PROPERTY AND EQUIPMENT INVENTORY.................................................... 3636 RECORDS ACCESS, RETENTION AND DESTRUCTION ................................ 3736 SALARIES: DOCUMENTING EXECUTIVE DIRECTOR SALARY ................ 4039 TAX STATUS AND PURPOSE ................................................................................ 4040 TELEPHONE EXPENSES ........................................................................................ 4140 TEMPORARY EMPLOYMENT AGENCIES........................................................ 4241 VOIDED CHECKS..................................................................................................... 4242 WRITE-OFF OF OLD CHECKS ............................................................................. 4342 INDEX: ACCOUNTING FORMS ............................................................................ 4343

4

ACCOUNT RECONCILIATIONS

Discussion It is extremely important, in the interest of proper internal control, that account reconciliations be handled correctly, because these reconciliations are the final line of defense against improper and fraudulent check disbursements or investment transactions. A review of the bank statement and cancelled checks or check images performed by an individual independent of check preparation responsibilities and who does not have access to the accounting records is one of the simplest, yet most effective, internal control procedures over cash disbursements for smaller organizations. In addition, the increased sophistication of electronic banking makes monitoring transmittals and images more secure and timely, and can be incorporated into controls to improve oversight. An example of this might be a product or service that allows the bank to compare checks received with checks generated, such as "Pay Forward" or "Positive Pay." Account statements should be addressed to, opened by (or alternately, downloaded by), and reviewed by the Executive Director. Account reconciliations should be conducted in a timely manner by the Program AssistantManager. 2. 1. As an extra control, after account reconciliations, the Treasurer or Deputy Treasurer

should review and approve account statements and check images and to assure that all pages of the statement(s) are present and no pages are missing.

3. 2. Voided checks must be documented and accounted for properly. Policy It is the policy of the Foundation to address bank and other account statements to the Executive Director, who will do an initial review of checks and/or other transactions that cleared during the prior month. The statements will be given to the Executive Director unopened.The Executive Director will download statements directly from the financial institution in a timely manner. After the review, the Executive Director will forward the statement and accompanying materials to the Program AssistantManager for reconciliation. After reconciliation, the Executive Director will forward account statements and check images to the Treasurer or Deputy Treasurer (as designated by the Finance Committee) on a quarterly basis for review. Items to be reviewed include payee, amount, signature, endorsement, and other relevant transaction information. The Treasurer/Deputy Treasurer will review the documents and fill out a Bank Statement Review Form, which shall be attached to the reconciled statement. The documents and check images should be returned to the office and filed with other reconciled account statements.WisTAF shall transmit disbursements made by check to its financial institution, where they will be

Formatted: Bullets and Numbering

5

compared against check images received. Any discrepancies between the record shall be reported to the Executive Director and the Treasurer. Procedure When received, unopened account statements will be given to the Executive DirectorThe Executive Director shall download bank statements by the 10th of each month. Within 10 days, the Executive Director will forward account statements to the Program AssistantManager who is responsible for account reconciliations. This individual cannot be a check signer. The Program AssistantManager will answer any questions posed by the Executive Director and prepare the account reconciliations by the 20th of the following month. The Executive Director will be responsible for coordinating the Treasurer/Deputy Treasurer review process.The Program Manager shall upload a report containing all check images to the bank's "Positive Pay" system on the day the checks are issued.

ACCOUNTING PROGRAM ACCESS & CONTROLS

Policy The Executive Director has administrative access authority over the password access to the Foundation’s accounting program. Password information will be kept in a secure location. Audit tracking must be enabled for all accounting programs. On a quarterly basis, the Executive Director will generate an audit tracking report for the previous period, including deleted transactions. The Executive Director or the Treasurer/Deputy Treasurer will review the report for unusual or unexplained transactions.

AIMIOLTA 2 DATABASE ACCESS

Policy The Program AssistantManager has administrative password access to the AIMIOLTA 2 database. The Executive Director has limited report-generating password access to the AIMIOLTA 2 database. All password access codes will be kept in a secure location.

AIMIOLTA 2 DATABASE ACTIVATIONS AND INACTIVATIONS CONTROLS

Policy

Formatted: Superscript

6

The Program Assistant shall log all financial institution and attorney account changes in the appropriate Activation or Inactivation log. The Executive Director or Program Manager will approve all account changes before they are entered into the AIMIOLTA 2 database. The Executive Director or Program Manager will print a monthly inactivation report and reconcile it with the corresponding log.

ANNUAL LEAVE & PERSONAL TIME PAYMENTS

Policy Employees may carry forward leave and personal time per personnel policy guidelines. Unused leave earned in excess of this amount during the year and not used will be lost. The maximum amount of annual leave or personal time paid to a terminating employee will be the amount of leave carried forward into the subsequent year (not to exceed the leave allowances outlined in the personnel policies), plus the amount of accrued but unused leave earned during the year of termination. Procedure All employees must turn in their approved absence report slips to the Executive Director, who will maintain a record of personal time and annual leave use. Upon termination of employment, the Executive Director will approve payment of unused leave or personal time per personnel policies. In the case of the Executive Director, the Program AssistantManager will supply this information to the President or Treasurer for approval before disbursement.

AUDIT AND INTERNAL CONTROLS

Policy The review of the annual audit and internal controls are two of the most important procedures the Board has for fulfilling its fiduciary responsibilities to the Foundation. The Executive Director and Treasurer establish internal controls pertaining to the accounting and AIMIOLTA 2 database records. The Board selects the public accounting firm that will perform the year end financial audit (see “CPA Firms: The Engagement Letter”). The financial audit is presented to the Board who has the authority to approve the audit. Procedures Whenever there is a change in administrative personnel or a change in the operating structure of the organization, the Treasurer and Executive Director will meet to determine

7

that the internal control system continues to meet the needs of the Foundation. If appropriate, the changes will be reflected in this accounting procedures manual. The key feature of the internal control system is that the Program Assistant (who maintains the AIMIOLTA 2 database and IOLTA records and does the bookkeeping) is not involved in handling checks and cash received, signing checks, transferring money or establishing cash accounts or investments and does not receive the unopened bank statement. The other aspect of this is that the Executive Director reviews the transactions of the other employees and is responsible for noting any problems directly to the Treasurer or President. The Board will approve the public accounting firm to perform the annual audit at least once every three years. The Treasurer will attend the audit exit conference at the conclusion of the audit or otherwise talk directly to the auditors regarding their findings. The public accounting firm will present the audit to the Board each year. The Board will review and approve the final audit. The Program Assistant and the Executive Director will be responsible for scheduling the audit, preparing the information needed by the auditors and answering questions during the audit.

ELECTRONIC BANKING – SECURE ACCESS

The Executive Director has administrative access authority over the password access to the Foundation’s banking accounts. Password information will be kept in a secure location.

BASIS OF ACCOUNTING

Policy The Wisconsin Trust Account Foundation uses a modified cash basis of accounting. This differs from U.S. generally accepted accounting principles because the Foundation does not recognize accounts receivable from trust accounts, accrued interest on investments, and accounts payable to vendors and grantees and their related effects on earnings. Net assets and revenue, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Unrestricted net assets are defined as net assets that are not subject to donor-imposed stipulations. Board designated net assets are defined as unrestricted net assets subject to self-imposed limits by action of the Board of Directors for grant awards to be paid in the future.

Formatted: Underline, All caps

Formatted: Heading 3, Centered

8

BID REQUIREMENTS

Discussion Bids should be required for material expenditures to ensure the Foundation is receiving the best cost for goods and services. To accomplish this goal, a formal bid requirement policy should be implemented, and it should apply to all material expenditures when the Foundation has discretion over the vendor chosen. Bids should be listed and discussed. Policy It is the policy of the organization to require bids for the following expenditures: Printing Three bids are required for all printing expenditures exceeding $1,000. Capital Three bids are required for all capital purchases exceeding Purchases $1,000. Professional Professional services, including CPA firms and law firms will services be evaluated every three years, and requests for proposals, will be prepared and sent to qualified firms in the same field. Other All other expenses exceeding $1000.

BOARD MEMBER REIMBURSEMENT AND MEETING EXPENSES

Policy Board members of the Wisconsin Trust Account Foundation, Inc., are volunteers who give their service to the Foundation voluntarily, and waive submitting expense vouchers for reimbursement of out-of-pocket expenses associated with their Foundation Board activities. Exceptions to this policy may be granted by the President or Executive Director, or in the case of the President’s request for reimbursement, by the Treasurer. The check signer may not sign a check payable to him/herself. Hotel Accommodations – Board meetings should be scheduled at times and in locations to minimize hotel expense. Requests for hotel accommodations must be approved by the President, or Treasurer or Executive Director. Board meetings should be held at locations that do not charge for meeting rooms.

9

BONDING OF BOARD AND STAFF

Discussion Not only does it make prudent business sense, but often bonding of employees is required by lending institutions, granting agencies, and so forth. The expense of bonding employees who handle checks and cash is minor in relation to the comfort provided in the event of employee dishonesty. Policy It is the policy of the Foundation to bond all employees involved in the financial functions of the Foundation. The Foundation shall maintain officers and directors insurance. Procedure The Executive Director will ensure that the Foundation has adequate insurance coverage for employee indemnity and directors and officers. The minimum coverage for employee indemnity shall be $100,000 per incident and the minimum coverage for directors and officers shall be $1,000,000 per incident. The Executive Director will request bids for coverage at least every three years.

BUDGETING

Policy The Board is responsible for guiding the budget process and for approval of the annual budget. The Executive Director will be responsible for preparing the proposed budget. Procedure The budgeting process will begin in July for the following fiscal year. This will allow for six months of results to be used in planning the budget. A five-year rotating budget that shows two years past actuals, the current budget year, and projections for the upcoming two budget years should be included as part of the process. All budget documents will be submitted to the Executive Director by July 31 for consolidation into an overall agency budget. The Executive Director will then review this to determine if there are any obvious areas that may need to be reworked. The collated budget will be submitted to the Finance Committee by August 31 for review and feedback. Any further revisions will be made and the budget presented to the Board at its

10

fall Board meeting. The Board has the authority to modify the budget. The Board must approve a budget. An approved budget may be modified by the Board for subsequent activities.

CHART OF ACCOUNTS

Discussion At the heart of the accounting operation lies the chart of accounts. The chart of accounts should be constructed to allow a trained accountant an immediate understanding of the accounting numbering system. It should include a brief description of the use of each account. Generally, a chart of accounts is divided into the following six account groupings: 1. Assets 2. Liabilities 3. Net assets 4. Revenues 5. Expenses 6. Functions or departments of the organization The numbering system should clearly indicate the account grouping in which the account belongs. For example, all asset accounts begin with the number one, all liability accounts begin with the number two, and so forth. Policy It is the policy of the Foundation to maintain a chart of accounts. All employees involved with accounting coding responsibilities or budgetary responsibilities will be issued a chart of accounts, and the chart of accounts must be updated on a routine basis. Accounts shall be numbered in the following manner: Assets 1000 Liabilities 2000 Equity 3000 Income 4000 Expenses 5000 Other Expenses 6000 – 7000 (functions or departments exceptional to or adjusting

to the budget; usually assigned by auditors) Procedure

11

The Executive Director will assign new account numbers and definitions after discussion with the Treasurer as needed. A list of the current chart of accounts should be included with this manual in the “Index: Accounting Forms” section.

CHECK DISBURSEMENTS

Discussion With the exception of small cash expenditures that are handled by petty cash fund disbursements, most other expenditures will be handled by check. Because of the need for internal control, the policies concerning check disbursements should be very straightforward and clear. These three rules concerning check disbursements should always be followed: 1. Unused checks should be prenumbered, stored under lock and key, and requested

formally. 2. A designated person should approve, initial and date invoices for entry into the

accounting software for payment at a later time. 3. All checks exceeding $1,000 should be signed by two persons. Policy The positions authorized to sign checks are Executive Director, President, Vice President, Secretary and Treasurer. Check signers are prohibited from signing checks payable to themselves. It is the policy of the Foundation to keep unused check supplies safeguarded under lock and key. All check supplies will be prenumbered. Check printing authorized by third party vendors (such as payroll services) will be numbered sequentially per a pre-authorized series different from the series used for checks generated from the Foundation offices. All check disbursements will require approved invoices or expense vouchers. The resulting checks in excess of $1,000 will be signed by two persons not requesting the check. Signed checks that have not been mailed or distributed will be put under lock and key at the end of each day. Reimbursement checks for the Executive Director and supporting documentation shall be forwarded to the Foundation’s President for review and approval.

12

Procedure When checks are to be prepared for disbursement, the Executive Director approves invoices and gives them to the Program Assistant for payment. Check disbursements (including payroll) are made the 15th and the last day of each month, or the last workday prior if that date falls on a weekend or holiday. The Program Assistant will ensure that two authorized signers sign all checks over $1,000, or checks made out to the Executive Director are signed by an authorized Board member. The Program Assistant is responsible for verifying that bills are not paid twice. The Program Assistant is also responsible for getting authorization for disbursements to the Executive Director.

COMPUTER NETWORKING & BACKUP

Policy The Accounting program and the AIMIOLTA 2 database program will be backed up regularly. The Program Assistant will be responsible for ensuring these backups. Procedure The office networks its computers through the Program Assistant’s computerserver located in the Program Manager's office. Most business files are stored in shared files on that C driveserver. The AIMIOLTA 2 database is available on all office computers, though each person accessing it must use a unique password so that data cannot be changed, merely accessed. The accounting program will be stored outsideon the network, on the Executive Director’s C drive. The Program Assistant’s C Driveserver will be backed up daily to the Executive Director’s C Drivea web-based back-up system. It will also be backed up daily to a tape system or a rotatingan external hard drive. Tapes or external hard drive backups will be stored outside the office. The Program Assistant will backup the accounting program at least once per month, preferably after each disbursement period. One set of backup disks will be stored in the fireproof safe, and one set of backup disks will be stored outside the office.The Program Manager shall be responsible for maintaining back-up systems.

13

CONFLICT OF INTEREST

Discussion To ensure transparency is maintained, it is a best practice procedure that the board of directors of nonprofit agencies avoid potential conflict of interest. Board members should review this policy and make appropriate disclosures in a signed statement every year. Such a system should ensure that the board is protected from litigation due to any potential conflict of interest. Policy No board member shall engage in any business or transaction or shall have a financial or personal interest, direct or indirect, that is incompatible with their fiduciary duty to the Foundation or which would tend to impair his or her independence of judgment or action relating to the Foundation. Personal, as distinguished from financial interest, includes any interest arising from blood or marriage or close business association. Each board member has a duty to place the interest of the Foundation foremost in any dealings with the organization and has a continuing responsibility to comply with the requirements of this policy. Board members may not hold an active Board membership on the policymaking board of any of the Foundation’s current or prospective grantees. Board members are likewise discouraged from doing business with the Foundation. Should either of the foregoing apply, full disclosure is required. Further, should a member offer to do business for the Foundation, the full terms and nature of said business shall be reviewed by the Board of Directors. If a board member has an interest in a proposed transaction with the Foundation, in the form of a significant, personal financial interest in the transaction or in any organization involved in the transaction, or holds a position as trustee, director, or officer in such organization, he or she must make full disclosure of such interest before any discussion or negotiation of such transaction. Any board or committee member who is aware of a potential conflict of interest with respect to any matter coming before the board or a committee shall not be present for any discussion of or vote in connection with the matter. All staff and board members are asked to sign this statement and return it to the Foundation office to be filed. Procedure Each July, the Executive Director will distribute “Conflict of Interest Statement” forms (see “Index: Accounting Forms”) to all board members and staff. Each board or staff member will review the Foundation’s conflict of interest policy and complete and sign the disclosure statement. All completed disclosure statements will be held permanently and filed at the Foundation office.

14

CONTRACT SIGNING AUTHORITY

Discussion The Foundation should have a firm policy regarding what individuals have the authority to sign contracts and other instruments obligating the Foundation; the policy should also state when that authority exists. Typically, the authority to sign contracts is vested with the Executive Director or the Board President, as long as the financial implications of the contract are included in the Foundation’s budget. Unbudgeted obligations typically require board of director’s approval before authority to sign the contract is granted. Policy It is the policy of the Foundation to grant authority to sign contracts to the Executive Director or the Board President, as long as the financial implications of the contract are included in the Foundation’s budget. If the financial implication of signing a contract is not included in the Foundation’s budget, board of directors’ approval is required before authority to sign the contract is granted. All signed contracts will be kept in the fireproof document safe.

CONTRIBUTIONS

Discussion As part of the Omnibus Budget Reconciliation Act of 1993, foundations receiving single contributions of $250 or more must provide written substantiation to the contributor for the contribution to be tax deductible. The contributor’s canceled checks are no longer considered adequate documentation. Policy It is the policy of the Foundation to send thank you letters on the Foundation’s letterhead acknowledging all contributions, regardless of the amount. The letters will indicate the dollar amount contributed and what portion, if any, was exchanged for goods or services. Procedure Thank you letters will go out on WisTAF letterhead and over the signature of the Executive Director.

15

CONTROL OVER CHECKS & CASH

Discussion Internal control of incoming checks and cash is just as serious as control over cash disbursements. Policy After the mail has been opened by the Program Assistant, a log of checks received that day should be completed. The log should simply record the name of the payer, the check number, the date of the check, the amount of the check, and the invoice number, if applicable. The log should be signed by the person(s) completing it. Checks should be restrictively endorsed at the time the mail is opened. All deposits should be approved by the Executive Director. The endorsement stamp should spell out the Foundation’s full name (never use acronyms), the bank name, and the bank account number. For example: Checks should be deposited on the business day after they are received. It is the policy of the Foundation that all incoming mail will be imprinted with a date-received stamp. Procedure Mail will be opened by the Program Assistant and will be imprinted with a date-stamp and initialed by the person opening the mail that day. Unopened envelopes (such as account statements or items marked as “confidential” or “personal”) will also be imprinted with a date stamp, and should accompany materials when appropriate as a record of reception. Checks received will be noted on the Daily Checks Received Log Form, which will include the date, the name of the payer, the date of the check, the amount of the check, and the invoice number if applicable. The Program Assistant will immediately stamp the back of any check(s) received with the Foundation’s endorsement stamp. Once the checks have been recorded they will be given to the Executive Director for review. The Executive Director will then give the checks to the Program Assistant to enter the deposit into the accounting system, indicating the proper account to credit in the Foundation’s financial statements.

For Deposit Only Wisconsin Trust Account Foundation

Bank Name Account Number

16

The Program Assistant will photocopy all checks to be deposited and print a deposit summary record from the accounting program. The Executive Director will approve the deposit and take it to the bank. Once the deposit is made, the Program Assistant will attach the deposit receipt to the photocopied check(s) and summary report and file the deposit record in a secure location. The original Daily Checks Received Log Form will be retained by the Program Assistant until the annual audit. All checks received will be deposited on the next banking day.

CONTROL OVER AUTOMATED CLEARING HOUSE (ACH) TRANSMITTALS: BANKS

Policy On a monthly basis, a person not creating the ACH file or initiating the ACH transfer will review all ACH transactions. Review should include a check for ACH accounts not remitting to appropriate Foundation accounts.A person not creating the ACH file or initiating the ACH transfer will review all ACH transactions prior to being transmitted. All electronic transactions must be approved for transmittal by two people, using unique, approved log-ins. All law firm and financial institution accounts that need to be inactivated should be approved by the Executive Director before inactivation. Logs shall be maintained of bank and law firm accounts activated or inactivated. The Executive Director shall review logs on a periodic basis. Treasury Connection Management. Passwords and transmittal codes for the ACH transmissions shall be kept in a secure location. Procedure The Program Assistant will fax monthly or quarterly ACH report batches to participating financial institutions on the first of the month or the first of the quarter for the preceding period.All banks are provided with an electronic remittance form template and are required to submit remittance reports via secure electronic methods, including but not limited to secure encrypted email, upload to WisTAF's secure website, or upload to a secure website accessible by rotating passwords. Banks are assigned a remittance date of either the 8th or the 15th of the month, either monthly or quarterly, and must submit their reports by that date. Upon receiving the completed remittance reports from financial institutions, the Program Assistant will create ACH transmittal batches at least twice a month, but no more than weekly. Batches will be deposited to the lockboxbusiness account via secure ACH electronic or modem connections. Every effort will be made to deposit ACH transmittals within as short a period of time as reasonably possible, but at least within the month they were reported.



17

When ACH files are ready to be uploaded to WisTAF's secure transmission site, the Program Assistant will generate a hardcopy report of the file and submit it for review to the Program Manager, or in the Program Manager's absence, to the Executive Director. The Progam Assistant will then upload the ACH file to the secure electronic banking system and submit the first approval. The Program Manager will review the file and bring any discrepancies in it to the Executive Director. If there are no discrepancies, the Program Manager will submit final transmittal approval. All electronic transactions must be approved by two people, using unique, approved log-ins. On a monthly basis in tandem with other account reconciliations, the Executive Director will generate an ACH transmittal report from the AIM database and reconcile it with the transmittal records kept by the Program Assistant, checking for discrepancies between the records such as unrecorded bank remittances. The Program Assistant shall record any new financial institution ACH participants in the ACH Banks Log. The Executive Director will compare the ACH Banks Log to the AIMIOLTA 2 database records on a quarterly basis. The Program Assistant shall do quarterly non-remittance checks and contact any delinquent financial institution as needed (see Non-Remittance Reporting).

COST ALLOCATION PLAN

Discussion The Foundation occasionally manages grant programs for other organizations. When the management involves significant administrative costs, it is reasonable to ask for an administrative fee to cover part or all of those costs. In return, outside organizations will be concerned that those administrative costs are reasonable, and not excessive. A cost allocation plan ensures that all parties are in agreement. Policy When the Foundation charges an administrative fee for managing non-WisTAF funding, the Executive Director will negotiate a cost allocation plan with the outside agency. Any negotiated cost allocation plan will be submitted to the Finance Committee for approval before signing. The Executive Director is responsible for maintaining the cost allocation plan. The Executive Director will review all bills prior to submitting them to funder organizations to ensure Foundation compliance with agreed-upon expenses. Adequate documentation will be maintained to support all billings. Procedure

18

The Executive Director and Program Assistant will create tracking systems for direct and indirect costs, including but not limited to: staff time spent on administration, photocopying and mailing expenses, rent and overhead, etc. Staff will record any resources spent on administration of the funding as expenses are incurred. Billings will be prepared and filed in a timely manner. When billing the outside agency, the Program Assistant will compile all expenses for the period and generate a bill from the accounting program. All expenses will be recorded as a receivable in a separate class within the accounting program, to ensure that Foundation costs are not intermingled with outside administrative expenses. The Program Assistant will attach all supporting materials to a copy of the bill and submit it to the Executive Director for review and approval before mailing. When payment is received, it will be entered into the accounting program as an offset to the receivables account. All bills and supporting materials will be maintained and stored per Foundation policy for contracts and agreements (see “Records Access, Retention and Destruction.) These records shall be made available to the outside agency upon request.

CPA FIRMS: Audited Financial Statements

Discussion Audited financial statements issued by CPA firms must be delivered to each member of the board of directors. Ensuring that members receive these statements is the responsibility of the Executive Director. Contractual agreements might require the Executive Director to send audited financial statements to other organizations, such as banks, granting agencies, insurance companies, and so forth. While audited financial statements are proprietary, consider making them available to the entire membership by publishing them whole or in part in one of the Foundation’s publications, typically the annual report. Distribution of the audited financial statements to individuals or organizations not entitled by contractual agreement is a matter of organization policy and is generally left to the discretion of the Executive Director. Policy It is the policy of the organization to direct the Executive Director to distribute the audited financial statements to the Board of Directors, the Wisconsin Supreme Court, the State Bar of Wisconsin and to all organizations entitled to receive a copy because of contractual agreement.

19

The authority to distribute the statement to other individuals or firms requesting them will be left to the discretion of the Executive Director or the Board President, who will use Wisconsin open records law as a guideline. Procedure WisTAF will use audited financials whenever possible when issuing an annual report or other public financial document. A log of each year’s report distribution will be maintained to ensure compliance.

CPA FIRMS: The Engagement Letter

Discussion An engagement letter to a CPA firm is required before an audit commences. The engagement letter should address topics such as capping audit fees; when the audited statements will be available to management; when tax returns are completed; the availability of a partner to present the audited statements and the management letter to the board; the number of copies of the statements that will be provided; and other matters important to management and the board. The engagement letter might also specify that the CPA firm will be set up on the database to receive all magazines, newsletters, promotional brochures, and all other mailings sent out, and that the firm will be required to retain this material as part of its permanent audit file for future reference and access, if necessary. Policy It is the policy of the Foundation to review the draft of the CPA engagement letter before it is signed to ensure it covers matters important to management. Procedure The engagement letter will be reviewed by the Executive Director, President or Treasurer immediately before the audit commences. Board or Executive Committee approval is required before the President, Treasurer, or Executive Director is given authority to sign the document. It will be made clear in the engagement letter sent to WisTAF auditors the exact date the audit will be completed. The audit will be scheduled immediately after the close of the budget cycle.

CPA FIRMS: The Management Letter

20

Discussion As part of their audit procedures, CPAs are required to report to management any concerns that arise during the audit in the areas of internal control, accounting procedures, and general managerial inefficiencies. These problems are documented in the CPA’s management letter. Management letter issues should be discussed with the board by a representative of the CPA firm. It is the responsibility of the board to direct staff to the appropriate action required to correct management letter issues and to follow up accordingly. As in the case of audited financial statements, outside individuals often have a right to obtain a copy of the management letter because of contractual obligation. Banks and insurance companies are typical examples. Distribution of the management letter to others requesting it is usually at the discretion of the Executive Director or the Treasurer or President. A CPA management letter distribution log should be maintained as a record of individuals and firms who have received the report. Policy The Board will discuss the CPA management letter with representatives of the auditing firm and direct staff as to the appropriate action required to correct deficiencies addressed. Distribution of the management letter to individuals or firms other than those entitled to a copy by contractual obligation is left to the discretion of the Executive Director. WisTAF’s auditors will be asked to present their findings to the Board at the board meeting following completion of the audit.

CREDIT CARD USE

Policy Company credit cards will be issued to the Executive Director for use for Foundation-related activities or purchases. Credit card information such as account numbers and authorization codes will be kept in a secure location. All credit card balances will be paid in full at the end of each statement cycle in order to avoid finance charges. Personal Purchases – The Foundation credit card may not be used for any personal purchases.

21

Receipts – Receipts must be presented for all charges incurred. Receipts must be documented with the business purpose of the expense. Charges not properly documented will be presumed to be personal. Credit Card Statements – Copies of the monthly statements along with copies of the receipts showing the business purpose shall be provided to the President within 5 days of receipt of the statement. Foundation staff will pay the credit card in a timely way. Payment of late fees for late payments to the credit card company must be approved by the President or Treasurer. Gas – Gas should not be charged on the Foundation credit card unless a rental car is being used.

DEBT

Policy Board approval is required for incurring any Foundation debt. The Executive Director will be authorized to negotiate such debt as needed by the Board. Any loans made to the Foundation shall be first approved in total by the full Board and individual disbursements may be authorized by joint prior approval of the President, Treasurer and the Executive Director. In the absence of the President or the Treasurer any two other members of the Board Executive Committee may act in their place. Any loan covenants and restrictions will be reported to the Board when the debt is authorized. The Finance Committee will review these covenants quarterly and report to the Board if there are any violations or potential violations of the covenants. Current debt is defined as any mortgages or notes payable that are due within 12 months. Long-term debt is defined as any mortgages or notes payable that are not due within 12 months. Current and long-term debt will have separate lines in the Foundation’s financial reports. Procedure A line of credit shall be established for payment of IOLTA grants in the event that IOLTA income should not meet expectations. The line of credit will be reviewed on an annual basis before being renewed. WisTAF investment reserves shall be used to anchor the line as needed. If lower-than-projected income necessitates the use of the line of credit, the Executive Director will contact the President and Treasurer with the amount of funds needed, the projected period of time the loan will be outstanding, the amount of any already outstanding principal balance, and the cost of carrying the debt until the projected period of time allows for repayment of the outstanding principal. Upon approval of the

Formatted: Font: Bold

22

President and Treasurer, the Executive Director will instruct the financial institution to transfer the funds for grant disbursement. If the line of credit is used, the outstanding principal should be paid as soon as is fiscally possible, taking into account interest rates and the benefits of long-term versus short-term debt obligations.

EMPLOYEE REIMBURSEMENT

Discussion Travel expense reimbursement is one of the most critical areas to control. Effective control requires that formal travel expense forms and travel policy be communicated to the traveler to avoid excessive expense, embarrassment, hard feelings, and general misunderstandings concerning eligible expenses and expense limitations. Policy It is the policy of the Foundation to establish travel expense limitations and guidelines as follows: (the Executive Director may make exceptions to this policy for staff members; the President may make exceptions to this policy for the Executive Director): Authorizations - All travel requests must be for budgeted travel and approved in a timely manner, preferably at least 30 days in advance, but no later than 10 days in advance, by the appropriate manager. Employees requesting reimbursements for travel expenses must submit a reimbursement form with relevant receipts attached to the Executive Director for approval prior to receiving payment. The Executive Director must submit a reimbursement form with relevant receipts attached to the President, Treasurer or other officer for approval before receiving reimbursement for incurred expenses. No employee or director may sign a check payable to him/herself, even if the reimbursement is properly approved. Travel Advances - Travel advances will be issued if requested at least 30 days before the trip. The advance will not exceed 150% of the estimated costs. Permanent travel advances will not be allowed. Personal Mileage - Employees will be reimbursed for use of their personal cars on Foundation business at the maximum tax-free rate permitted by the IRS. Commuting mileage will not be reimbursed. Public Carrier - Employees traveling by public carrier must utilize the most cost-effective means of travel, such as coach airfare. Receipts are necessary. Lodging - Lodging facilities must be approved by the Executive Director. When staying overnight, employees will use one of the hotels where the Foundation has a special rate.

23

Employees will be reimbursed entirely for the basic room charge and applicable taxes. Receipts are necessary. Meals - Employees will be on a per diem basis for meals and tips. Current per diem rates are $35/day. This figure includes applicable tip and taxes. Alcoholic beverages may not be included as a per diem cost. Receipts are necessary for meals. Tips should be noted on meal receipts. When having a meal for a non-employee, it should be noted on the back of the receipt the names of the individuals and purpose of the meeting. Taxi - Actual taxi fares, including tips, will be reimbursed entirely. Receipts are necessary. Tips must be noted on taxi receipts. Airport transportation via shuttle is encouraged to reduce cots. Telephone - Personal calls must be limited to 10 minutes per day to be reimbursable. Tips - Reasonable tips for baggage handling will be reimbursed. Receipts are not required. Parking and Tolls - Parking fees and toll expenses will be reimbursed. Receipts are necessary. Car Rentals - Car rentals will be reimbursed if approved in advance. Receipts are required. Travel expense reimbursements will be distributed or mailed within 30 days receipt of properly approved requests. Non-allowable expenses include: Entertainment Alcoholic beverages Personal expenses (dry cleaning,* gifts, etc.) Non-Foundation business calls *dry cleaning may be allowed for business trips exceeding four nights

EQUIPMENT & DEPRECIATION

Policy Acquisitions of equipment in excess of $500 $1,000 are capitalized. Purchases of equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Depreciation will be charged beginning in the month that the asset is placed into service.

24

Estimated lives are: Computers, software and related equipment 3 years All other equipment and furniture 5 years

FINANCIAL STATEMENT PREPARATION AND DISTRIBUTION

Discussion Financial statements should be prepared and distributed on a timely basis if the Foundation is serious about taking a proactive rather than a reactive position in solving problems. If financial statements are not distributed promptly, valuable time that could have been used to correct the problem will be lost. Financial statements should be prepared and distributed monthly within twenty working days after the close of the prior month. The statements should include, at a minimum, the statement of financial position (balance sheet), the statement of activities (income and expense statement), departmentalized or functional statement of activity reports, and other financial reports important to the organization. Policy It is the policy of the Foundation to prepare and distribute monthly financial statements to the Treasurer that will include a balance sheet, IOLTA income report, and budget to actual report. These statements will be prepared and distributed within twenty working days after the close of the month. Quarterly statements will be distributed to the Board of Directors. Monthly statements will be distributed to the Finance Committee, the Executive Director, the Treasurer, and the Board President. Procedure The Program Assistant will be responsible for generating and distributing all financial reports, once approved by the Executive Director.

GRANT AWARDS PROCESS – FOUNDATION GRANTS

Policy The grant awards process is one of the most important responsibilities of the Foundation Board. The Board is committed to promoting a grant atmosphere free of politics, bias or favoritism, with an emphasis on seeking the greatest public service return for each WisTAF dollar awarded. In order to ensure the grant awards process is as unbiased and comprehensive as possible, the Board has delegated the various component parts of the process to appropriate committees for greater oversight.

25

The Grants/Evaluation Committee is responsible for establishing grant application criteria, reviewing grant applications and making grant recommendations to the Board on an annual basis. It is also responsible for establishing grantee evaluation criteria and standards, and for evaluating grantee performance (see “Grant Monitoring & Compliance Process – Foundation Grants”). The Finance Committee is responsible for reviewing Foundation income and making annual grant level recommendations to the Board. The Board is responsible for establishing the annual grant level, approving all grant awards, and establishing requirements for all grant applicants to follow. Staff is responsible for coordinating the grant application and award process, including maintaining the Board's timeline, creating and distributing grant applications and other materials, publicizing the grant award process, verifying applicant documentation, notifying applicants of their grant status, etc. Staff will also remain current with trends in granting and evaluation standards and offer suggestions to the Board and its committees as needed to ensure the Foundation’s high standards are upheld. Grant awards made by the Board cannot be challenged. Grant awards can be modified by Board decision at any time during the grant year. Procedure “Foundation Grants” currently encompasses IOLTA Category I and Category II grants and Public Interest Legal Services Fund grants which are funded by Lawyer Bar Dues. "State Appropriation Grants" are grants made from appropriated state funding for the provision of civil legal services to low-income people, and in which WisTAF is named as the program administrator and reports to the Department of Administration. Timeline – Grant awards are made on a calendar basis. Grant applications are available in the spring for the following year. Completed grant applications are due in late MayJuly. Grant decisions are made in the fall. Setting grant levels – The Finance Committee recommends upcoming year grant levels as part of the annual budget process. The Grants/Evaluation Committee may or may not use those levels to make its initial grant award recommendations. The Board makes the final grant level decision. Determining grant awards – The Grants/Evaluation Committee recommends grant awards to the Board, which has the authority to act upon the recommendation or discard it for awards of the Board’s choosing. The Board makes all grant award decisions. Grant Conditions Agreement – Staff will issue a grant conditions agreement to each grantee for each grant awarded. This agreement will indicate the grantee’s name and

26

terms of the grant such as how and when it will be disbursed, the terms under which the funds must be used, repayment instructions for funds not used, award modification terms, what reports will be required from grantees, and other terms as determined by the Grants/Evaluation Committee. A copy of the grant conditions agreement signed by representatives of both the Foundation and the Grantee agency will be kept on file in the Foundation offices. Grant conditions agreements for state appropriation grants must reference the budget line item assigned to the civil legal services appropriation for grantee audit tracking purposes (ex., for the 2007-2009 state appropriation grants, "2007 WI Act 20, Chapter 20.505(1)(e)" should be referenced). Necessary documentation from grantees – Staff shall maintain grant binders or other filing systems for each grantee. Grantees must submit all required documentation specified in the grant application, grant conditions agreement or otherwise requested by the Foundation before funds are disbursed. Notification of awards. Staff will notify applicants of preliminary grant award recommendations made by the Grants/Evaluation Committee, and may appeal the recommendation in accordance with the Foundation’s lobbying policy. Applicants will be notified again once the Board makes its final grant awards decision. Grant awards may not be appealed. Unawarded grant application retention. Grant applications that do not receive an award will be discarded after the Board has made its grant decisions.

GRANT DISBURSEMENT PROCESS – FOUNDATION GRANTS

Policy IOLTA Grantgrant awards are generally disbursed in quarterly installments on the first day of each quarter of the grant award year. PILSF grant awards are generally disbursed on January 1, with any residual funds disbursed as quickly as possible when received. State Appropriation grant awards are disbursed upon receipt. The Board of Directors may modify the disbursement schedule at any time. Grant disbursements are signed by two Board or staff members authorized to sign checks. Procedure The Program Assistant will generate grant award checks with sufficient time to get two signatures before the date they are to be sent. Grant disbursements will be mailed the first day of each quarter, or otherwise by Board directive. The Program Assistant will maintain a list of grant awards paid and update as needed.

GRANT MONITORING & COMPLIANCE PROCESS – FOUNDATION GRANTS

27

Policy The Grants/Evaluation Committee evaluates grantees through a variety of methods that may include required reporting from grantees, site visits to grantee agencies, review of grantee financial documents, etc. The Grants/Evaluation Committee will report its findings to the Board on at least an annual basis or otherwise as needed. All grants must be evaluated for compliance with established requirements, in accordance with Supreme Court Rule Chapter 13 and/or relevant grant management agreements. Procedure “Foundation Grants” are currently IOLTA Category I and Category II grants, and PILSF grants. Grantees are required to submit mid-year and annual (end-of-the-year) reports in the formats established by the Foundation for each grant they have received. In addition, grantees will be asked to host an on-site visit from Foundation Board and staff in the spring following any grant year. Additional information may be requested by the Foundation if any discrepancies are noted. The Evaluation Committee will review all grantee and Foundation reports and bring any irregularities or concerns to the Grants Committee (if a new application from the grantee has been submitted) and/or the Board (if circumstances involve requesting an awarded and disbursed grant to be repaid to the Foundation).

GRANT CONTRACT, AWARDS, & COMPLIANCE MONITORING – NON-WISTAF RESTRICTED GRANTS & DONATIONS

Policy In order to continue receiving government grants and restricted donations, the Foundation must have systems in place to ensure compliance with the restrictions imposed by those grants and restricted donations. If no other Board or Committee member is so designated, the Executive Director will be designated as the Foundation’s compliance officer and will be responsible for overseeing the compliance with all applicable grant or donation restrictions. The Executive Director will be responsible for communicating the nature of all donor restrictions to the Program AssistantManager. This information will be used to ensure that the General Ledger restricted donations account(s) will reflect the restricted donations and the spending of those restricted amounts, as appropriate. The Foundation will ensure that all grant contracts specify audit requirements before they are finalized.

28

Procedure The Grants/Evaluation Committee will require periodic reports from the Executive Director regarding new compliance requirements associated with grant contracts and restricted funds. The Executive Director will be responsible for preparing a report documenting how WisTAF is ensuring compliance with grant rules. These reports, plus any correspondence with granting agencies regarding compliance issues, will be kept in the appropriate grant files. The grant files will also contain the final signed copy of the grant, any addenda and all other correspondence. In the event that the Foundation receives restricted donations, the Executive Director will maintain a record of all such donations in a database so that periodic reports of the cumulative restricted donations can be produced. When a restriction has been satisfied, that will be noted in the database. If appropriate, the Executive Director will be responsible for communicating the satisfaction of the restriction to the donor. The Executive Director will forward copies of each month’s new and outstanding restricted donations to the Program AssistantManager, who will enter a journal entry to ensure that the restricted donations are correctly presented in the financial statements. When WisTAF receives grantee audit requests for confirmation of grants provided to grantee agency for the audited period, it must provide the following information to the grantee's auditor:

IOLTA Category I grants – unrestricted funds for the provision of low-income civil legal services

IOLTA Category II grants – unrestricted funds for the purpose of (give the project name or description)

PILSF grants – unrestricted funds for the provision of low-income civil legal services

State appropriation grants – unrestricted funds for the provision of low-income civil legal services

GRANT RESERVE POLICY: Determining Grant Levels

Policy The board-designated reserve, which is invested in various securities managed by Thompson Investment Management LLC, will be funded and capped. The amount of the cap will be determined by the board annually at its regular September meeting. The reserve cap will be established as 100% of the amount of the annual grants attributable to Interest on Lawyers Trust Accounts, or the so-called IOLTA grants. Grant awards attributable to alternative revenue sources, such as PILSF grant awards, will not be subject to this reserve requirement, and not included in the reserve calculation.


29

If our reserve account is greater than the annually-determined reserve levels, the excess should be used in the grant determination. If our reserve account is less than the annually-determined reserve levels, the deficit should be funded from annual IOLTA revenues as expeditiously as possible. Procedure To determine annual reserve amounts, the Executive Director will determine the amount of IOLTA income received in the immediate past twelve months to use as a baseline. The amount may be modified if the U.S. economy is in a downward trend. This amount will be included in the budget process as the recommended grant level. If the recommended grant level is a different amount than the existing reserve, adjustments will be made to both amounts until they are equivalent, and the adjusted amount included in the budget process as the recommended grant level, unless otherwise determined by the Finance Committee and/or board. With approval from the Treasurer or President, the Executive Director will ensure that adjustments to the reserve are made expeditiously in accordance with investment policy (see also “Investment Policy”).

IBRETA REFUNDS/IOLTA OVERPAYMENT/REFUNDS

Policy The Foundation defines IOLTA income as being interest paid on Wisconsin attorney trust accounts. Occasionally, the Foundation receives income through IOLTA remittances that belongs to other entities, individuals or organizations. When that happens, the amount is refunded to the proper owner. Procedure IBRETA refunds – The Program Assistant should scan IOLTA remittance reports for realtor accounts. If interest from a realtor account is remitted in addition to IOLTA interest, the Program Assistant should contact the financial institution to have them change the account to an IBRETA account and to review the interest remitted on that account to see if any further interest was remitted to WisTAF by mistake. Once the full amount of mistakenly remitted interest is documented, the Program Assistant should notify the Executive Director of the refund amount, with all necessary documentation from the financial institution. The Executive Director should review the documentation, approve any refund, and pass the materials to the Program Assistant for payment and adjustment of IOLTA income. Overpaid IOLTA refunds –Occasionally financial institutions overpay their IOLTA remittance due to internal error. Financial institutions requesting a refund of overpaid IOLTA interest must submit documentation that shows the trust account balances for the

30

period in question, the interest rates paid during the period, the remitted amount of interest for the period and the amount of interest that should have been remitted. The Executive Director should review the documentation, approve any refund, and pass the materials to the Program Assistant for payment and adjustment of IOLTA income. Once identified, the financial institution cannot carry the overpayment to a new reporting period. They must request a refund of the overpaid interest. Other refunds – Occasionally attorneys ask for refunds of interest in the name of their client or interstate financial institutions mistakenly remit IOLTA income from another state to Wisconsin. The institution or attorney should submit a letter that states the principal amount held for the client, the period of time during which the principal was held, the interest rate paid for the period and the total amount of the requested refund. The Executive Director will review the materials, approve any refund, and pass the materials to the Program Assistant for payment and adjustment of IOLTA income.

INSURANCE

Discussion In order to protect the organization, employees, and volunteer officers, organizations should have their insurance policies reviewed annually to ensure that coverage and limits are adequate. This review should be conducted by someone trained in commercial insurance who is not the organization’s insurance broker. Policy It is the policy of the Foundation to have an independent insurance consultant review the organization’s insurance policies every two three years to ensure coverage and limitations adequately meet the needs of the organization, members, and employees. At a minimum, the Foundation shall maintain Directors & Officers, Employee Indemnity/Bonding, Worker’s Compensation and Business Liability policies. Procedure The Executive Director will review insurance policies and premiums on an annual basis. Bids for policies should be solicited at least every three years, or more often as needed.

31

INVESTMENT POLICY

Discussion The investment of the Foundation’s excess cash should always be preapproved by the Foundation’s policy-making body. If investment policies are preapproved by the board of directors, executive committee, budget and finance committee, and so forth, the individual(s) making the actual investment decisions will be bound by the policy and prohibited from making risky investment decisions in the hope of achieving a higher investment return than approved investments, no matter how well intended. Before investments are entered into, an analysis must be done of the cash flow projection budget for the length of time the moneys will be obligated. This analysis will ensure that cash is available to meet routine, on-going cash obligations before any investment decisions are made. This analysis will become part of the permanent record surrounding the investment. Also, the current maximum insured by the Federal Deposit Insurance Corporations (FDIC) is $100,000. This maximum insured amount should be taken into consideration when implementing the investment policy. Policy The Foundation will build and maintain a reserve to assist in maintaining financial stability. This will be an investment reserve held separately from other Foundation funds, and managed as a grant reserve (also see “Grant Reserve Policy”). Any income of the reserve will stay in the reserve fund. The Board may designate portions of the net assets of the reserve for specific purposes. The Foundation shall retain professional management of the reserve at all times that the reserve balance shall exceed $100,000. Said manager(s) shall be selected by the Finance Committee and approved by the Board. The performance of the management and the fees for same shall be reported to the Board by the Finance Committee at least yearly. The preferred instruments for investments shall be mutual funds consisting of common or preferred stocks or high grade corporate or government bonds and cash. Realizing that market conditions are constantly changing the Foundation wants to allow the manager some flexibility with regard to the mix of bonds and stocks that the reserve may be invested in. However the general rule shall be as outlined below. Any material deviation from these guidelines shall be approved by the Finance Committee prior to such changes being made. Any such deviation from the policy shall be reported to the entire Board no later than the next meeting following the action of the Finance Committee.

32

INVESTMENT VEHICLE % OF RESERVE Stocks 45 to 55 % Bonds 55 to 65 % If, at any time, the management of the reserve shall recommend the conversion of the reserve to cash, in excess of 5% said conversion must first be approved by the Finance Committee and then reported to the Board as soon as practicable. It is the policy of the Foundation that the investment of the reserve shall not be concentrated in the securities of any one company or government entity in excess of 10%. Any additions to the reserve shall be made with the prior approval of the Finance Committee. Any withdrawals from the reserve must have the prior approval of the full Board. Authorizations to the manager for withdrawal shall be signed by at least two members of the Foundation Executive Committee (one of whom must be the Treasurer) and the Executive Director. The reserve may be pledged by prior authorization of the full Board. Any loans made to the Foundation made under such a pledge shall be first approved in total by the full Board and individual disbursements may be authorized by joint prior approval of the President, Treasurer and the Executive Director. In the absence of the President or the Treasurer any two other members of the Board Executive Committee may act in their place (also see “Debt”). The Finance Committee shall review this policy at least every two years. Any changes made to this policy shall only be made with the prior approval of the Board of Directors.

IRS FORMS: Form 990

Discussion Form 990 is an information return required by the IRS of all not-for-profit organizations with gross revenues of $25,000 or more. As part of an organization’s tax-exempt status, the organization must make Form 990 available for public inspection, and a firm policy on this access should be established. Policy It is the policy of the Foundation to allow public access to IRS Form 990. This access will be provided at the Foundation’s headquarters at a time mutually agreeable between the Foundation and the individual requesting the inspection. Requests

33

for copies of Form 990 may be denied, and Form 990 will not be mailed under any circumstance without the approval of the Executive Director (also see “Records Access, Retention and Destruction”).

LOANS PROHIBITED

Policy It is the policy of the organization to prohibit loans to employees and members under all circumstances. One payroll advance per year may be allowed at the discretion of the Executive Director, or in the case of the Executive Director, at the discretion of the President or Treasurer. Payroll advances may not exceed the net amount due for the current payroll period worked. Procedure Payroll advance requests must be pre-approved and communicated to payroll services at least three days prior to payroll disbursement.

LOCK BOX MANAGEMENT

Discussion A lock box is a system whereby incoming checks are mailed directly to and deposited by a bank rather than mailed to the organization. Use of a lock box is a very effective internal control because employees do not come into contact with original checks and the opportunity for employee dishonesty is virtually eliminated. A lock box also has several other advantages over mailing checks directly to the Foundation: 1. Checks are deposited into the Foundation’s account two or more banking days sooner

than by traditional methods, so the Foundation’s cash flow improves. 2. End-of-month deposits in transit are reduced. 3. Valuable employee time isn’t wasted on preparing bank deposits, going to the bank,

and so forth. 4. The possibility of losing, misplacing, or having checks stolen is eliminated. 5. Checks are deposited even if employees are out sick, on vacation, and so forth.



34

When negotiating with the bank, it is suggested that organizations direct the bank to make copies of the original checks and forward the check copies with everything that accompanies the checks, including the envelopes (to record address changes). Once the lock box receipts are sent to the Program Assistant, accounting must balance to the deposit total and record the transaction in the accounting records. Lock box transactions should be recorded on a daily Lock Box Transaction Log Form and be retained with the bank deposit slip. Policy It is the policy of the Foundation that checks mailed to the Foundation be mailed to the lock box currently at M & I, Milwaukee bank. The bank will copy the checks and forward the copies, deposit slips, and all materials sent with the checks, including the envelopes to the Program Assistant. The Program Assistant will maintain a Daily and Monthly Lock Box Transaction Logs. The Executive Director will reconcile the Monthly Lock Box Transaction Log to AIM database deposit records on a monthly basis. The Executive Director will also reconcile the AIM database deposit records to the lockbox statement on a monthly basis (see also, “Control Over Automated Clearing House (ACH) Transmittals”).

MAINTENANCE OF ACCOUNTING POLICIES AND PROCEDURES MANUAL

Policy The accounting policies and procedures manual is critical to the accounting function of the Foundation. The Executive Director is responsible for maintaining the manual. The Board must approve all proposed policy changes after review and recommendation by the Finance Committee. The Executive Director in consultation with the Treasurer must approve procedural changes. The policies and procedure manual will be dated with the date of each approved revision. Procedure Each year the Executive Director will review the manual and formulate proposed procedural changes. This should take place in time to be reviewed by the independent auditors during the annual audit. All changes must be made in writing by the Executive Director and provided to the Finance Committee. If the Executive Director has no

35

proposed procedure changes, a memo to that effect must be provided to the Finance Committee. The revised manual will be distributed to the Executive Director, the Program Manager, the Program Assistant and the Board.

NON-REMITTANCE REPORTING

Discussion Financial institution remittance reports vary from month to month, usually reflecting new IOLTA accounts opened or old IOLTA accounts closed. However, on an annual basis, a significant number of the accounts omitted from one remittance report to the next are unexplained. They may be due to financial institutions’ database losses experienced when upgrading computer systems or merging with another bank, or may be lost through simple human keying error. In 2004, after analyzing the frequency that those accounts proved to be active IOLTA accounts that simply hadn’t been reported, it was found that sufficient interest had been generated by those unreported accounts to offset the cost of tracking them and provide significant income. Policy On a quarterly basis, the Program Assistant will generate a non-remittance report for all financial institutions with IOLTA accounts that existed prior to the quarter, but have not been reported since. Financial institutions will be required to remit interest for any active IOLTA accounts that are identified. The amount of the interest remitted for the account shall be retroactive to the period that the account was last reported. The Executive DirectorProgram Manager will generate a report listing all non-remitting reports, and reconcile it to the letters sent to financial institutions each quarter, to ensure that all non-remitting IOLTA accounts have been identified and their status checked and revised as appropriate. Procedure After data entry is completed for a quarter, the Program Assistant will generate non-remittance reports for financial institutions. The Program Assistant will provide a copy of all reports to the Executive DirectorProgram Manager. The Program Assistant will mail non-remittance reports to the appropriate financial institutions, and will receive the corrected reports when they are returned. The Program Assistant will make corrections to the AIMIOLTA 2 database reflecting the status of each non-remitting account, and will file all corrected reports received for that quarter.

36

Once all corrected reports have been received, the Program Assistant will give the file to the Executive DirectorProgram Manager for review. The Executive DirectorProgram Manager will make sure that all reports generated and sent have been returned, and that the account log corresponds to the corrected reports and all accounts properly updated in AIMIOLTA 2. Non-remittance records will be retained in accordance with “lockbox paperwork” records policy (see also “Records Access, Retention and Destruction”).

PREPARATION OF INFORMATIONAL RETURNS

Policy WisTAF is required to file IRS forms 990, Return of Organization Exempt from Income Tax and 990 Schedule A, Organization Exempt Under Section 501(c)(3), and Wisconsin Department of Regulation and Licensing form 1952, Charitable Organization Annual Report. The preparation of these reports will generally be contracted out to the independent accountants performing the audit. The Executive Director will be responsible for providing the information needed to prepare the report. The Executive Director will review the reports prior to filing them to ensure that they are accurate and do not indicate any potential problems with the Foundation’s tax status or fundraising license.

PROPERTY AND EQUIPMENT INVENTORY

Policy An inventory of all property and equipment will be maintained. The inventory document will contain sufficient information for insurance and grant requirements. Procedure The Program AssistantManager will maintain a spreadsheet of all property and equipment owned by the Foundation. Information recorded on the spreadsheet will include: description, serial number, acquisition date, cost, vendor, location and any grant or other restrictions.

37

The property and equipment spreadsheet will be consulted prior to sale of any item to determine if there are restrictions. Grant-purchased equipment may generally not be sold without the grantor’s permission. An annual inventory will be taken to verify the existence of the property and equipment listed on the spreadsheet.

RECORDS ACCESS, RETENTION AND DESTRUCTION

Discussion Every organization should have a formal, well-thought-out records accessaccess, retention and destruction policy. Old records that are rarely, if ever, used take up valuable, expensive space; yet premature destruction of records can be a costly and sometimes embarrassing mistake. To address this situation, the Foundation must first inventory existing records and determine how old they are. After the inventory is complete, a study must be undertaken to determine how long records must be kept, and an appropriate policy established for each type of record eligible for destruction. A formal record of the destruction should be maintained on a permanent basis in a records destruction log. The investigation into how long records must be retained will sometimes uncover inconsistencies among federal, state, and local requirements. When a conflict does exist, the longer period should prevail. Some records, even though not required by law, should be retained permanently, such as audited financial statements, some personnel records, minutes, legal correspondence, tax records, or other documents that may be important to the Foundation or eligible for its archives. Document Destruction: the Sarbanes-Oxley Act was signed into law on July 30, 2002 as a result of corporate and accounting scandals. While most provisions of the act apply only to publicly traded companies, document destruction provisions do specifically apply to nonprofit organizations. It is a crime for an organization to destroy, alter, cover up, or falsify a document to prevent its use in an official proceeding. Policy Foundation records are generally open to public inspection in accordance with IRS rules, open records laws and the spirit of public service. However, certain information is not open to public examination and may only be released with the permission of the Executive Director and President. Questions in this area are to be resolved by the Executive Director. If the answer to a request is unclear the Executive Director may contact the full Executive Committee for advice.

38

Grantee Records Access Policy - Except as provided below, requests for access to or copies of Wisconsin Trust Account Foundation (“WisTAF”) records will be construed and processed consistent with the Wisconsin Public Records Law. A grant application will be confidential upon submission to WisTAF until the Grants Committee announces its preliminary grant award recommendations for the grant cycle in which the application was submitted. The Executive Director is WisTAF’s record custodian. The Executive Director may consult with the President of the Board of Directors or the Executive Committee regarding records request issues. Actual, necessary and direct costs of providing record access or copies will be charged to persons requesting WisTAF records. The Executive Director, in his or her discretion, may waive the charges for responding to a specific records request. Policy on Requests for Information about IOLTA Accounts or Other IOLTA Banking Information from non-Foundation Sources - IOLTA information is confidential to the fullest extent the law allows. The Foundation uses all standard confidentiality practices to respect and maintain the relationship between attorneys, banks and their clients. Requests for information pertaining to IOLTA accounts from persons or organizations that are outside Foundation parameters will not be granted, except in the case of the Office of Lawyer Regulation as needed to verify accounts when a financial institution fails or is acquired by another financial institution. IOLTA records will be made available per IRS requirements and to auditors for auditing purposes. Various rules, statutes of limitations and common sense govern record retention. It is the policy of the Foundation to retain records as required by law and to destroy them when appropriate. The Foundation shall do an annual inventory of records scheduled to be destroyed in that year. The Executive Director will fill out a Records Destruction Request Form, listing all records to be destroyed, which will be submitted to the Treasurer and/or President for approval. Once the records have been destroyed, a copy of the Records Destruction Request Form will be included in the Foundation’s Records Destruction Log. Procedure Payroll tax forms – are not public information and will not be released. IRS Forms 990 and 990A – must be made available to anyone upon request. The specific rules are outlined in the instructions for form 990. All pages, schedules and attachments, except the detailed schedule of contributors must be made available. This access will be provided at the Foundation’s headquarters at a time mutually agreeable between the Foundation and the individual requesting the inspection. Form 990 will not be mailed under any circumstance without the approval of the Executive Director. Requestors who wish to have a copy must pay the legally allowed fee, plus actual postage, if applicable (see also, “IRS Forms: Form 990”). Form 1023/application for exempt status and the IRS determination letter are also available in the same manner as Form 990.

39

Wisconsin Charitable Organization Report will also be available in the same manner as Form 990. Personnel records – all requests for personnel records, job references and credit inquiries will be referred to the Executive Director (see also, “Salaries: Documenting Executive Director Salary”). Financial information – financial statements and other financial information are regularly distributed to Foundation employees and the Board. The Executive Director must approve any outside requests for such information. Record retention – a schedule of record retention follows. Any discarding of records should follow this schedule. However, prior to discarding of records, the permission of the Executive Director and the President and/or Treasurer are required to ensure that they have no reason that an exception should be made to the policy. All discarded documents are to be shredded or sent to a recycling company that issues a confidentiality agreement to its clients. For tax purposes, records should be maintained until the expiration of the statute of limitations. Generally, that period expires three years after the later of the due date of the return or the date filed. While there are a few exceptions to this rule, the three-year period normally should be adequate. For non-tax purposes, records should be maintained only as long as they serve a business purpose or until all legal requirements are met. Unfortunately, there are not specific standards that will cover all situations. The following are some of the factors that should be considered: federal, state and local statutes and regulations; industry requirements or standards; potential claims or litigation; contract requirements. Type of Record…Retention Period (Yrs) Accident reports/claims…………….7* Appraisals……………………………P Articles of incorporation/bylaws……..P Assets records………………………..7* Audits…………………………………P Bank statements/reconciliations……..4 Bills of sales – assets………………...7* Board minutes………………………..P Budgets & Projections…………….…2 Cancelled checks/imaged checks – general ……………………………..4** Capital stock & bond records…………P Charts of accounts…………………….P Check vouchers/stubs………………....4

Committee minutes……………………4 Contracts & agreements……………...7* Conflict of Interest Statements………P Correspondence – credit & collection..7 Correspondence – routine…………4*** Credit memos…………………………4 Damage & theft reports……………….7 Deeds………………………………….P Deposit slips…………………………..4 Depreciation schedules………………7* Employee contracts…………………..7* Employee disability claims……………7 Employee unemployment claims……...7 Employment applications……………..4 Employee expense reports…………….4 Employee personnel files…………….7*

40

Employee time reports/earnings…….…4 Employee w-2, w-4, etc……………...4* Financial reports………………4 Grant history…………………………..P Grantee ACH account information……P Grantee binder materials……………..4* Insurance policies/records……………..4 Internal reports, memos, work orders…2 Inventory records…………………….4* Invoices/fixed assets…………………7* Invoices/general expenses……………4 IOLTA agreements..……………….…P Leases………………………………..7* Ledgers & journals: Cash receipts………………….P Cash disbursements…………..P General Ledger………………..P Journal Entries………………..P Payroll Journal………………..4 Purchases & sales…………….7 Receivables/Payables…………7 Licenses………………………………4* Lockbox Paperwork…………………2 7

Pension records……………………….P Petty cash records……………………..4 Purchase orders/invoices………………4 Repair & Maintenance records………..4 Tax returns & related records…………P Payroll reports…………………………4 P means records should be kept permanently * Retention period begins with settlement of claims, disposal of asset, termination of contract, etc. ** Some should be kept longer, e.g. checks for asset acquisitions should be kept with bill of sale, etc. *** Legal and important correspondence should be kept as long as the documents to which they relate

A formal record of the destruction should be maintained on a permanent basis in a records destruction log. The investigation into how long records must be retained will sometimes uncover inconsistencies among federal, state, and local requirements. When a conflict does exist, the longer period should prevail.

SALARIES: DOCUMENTING EXECUTIVE DIRECTOR SALARY

Policy The Executive Director’s starting salary and any subsequent salary amount changes will be specifically documented in board minutes.

TAX STATUS AND PURPOSE

Policy The Wisconsin Trust Account Foundation is a not-for-profit corporation incorporated as a 501(c)(3) organization. The Foundation is registered with the Secretary of State in Wisconsin with a calendar year end. The Foundation is also registered with the

41

Wisconsin Department of Regulation and Licensing to raise funds from the general public. The Foundation’s articles of incorporation state that the corporation’s purpose shall be to receive funds from attorneys’ trust accounts in accordance with Wisconsin Supreme Court Rule and to make grants or expenditures of these funds for the following purposes: 1. To provide legal aid to the poor. 2. To fund programs for the benefit of the public as may be specifically approved

from time to time by the Supreme Court of Wisconsin for exclusively public purposes.

3. To pay the reasonable and necessary expenses of the Board and other costs reasonably and necessarily incurred for the administration of the program including the employment of staff for the purpose.

In accordance with IRS Code section 501(c)(3), the Foundation is organized and operates exclusively for the exempt purpose as described. In compliance with the restrictions on such organizations: - No part of the net earnings of the organization may inure to the benefit of any

private shareholder or individual. - No substantial part of the activities of the organization may consist of the carrying

of propaganda or of attempting to influence legislation (lobbying). - The organization may not participate in, or intervene in, any political campaign

on behalf of any candidate for public office. The service area is the State of Wisconsin. Procedure The Executive Director is responsible for ensuring that all licenses are current, that practices required of non-profits under federal, state and local laws or regulations are followed, and that changes to by-laws or articles of incorporation are filed with the appropriate agencies.

TELEPHONE EXPENSES

Discussion Charges for telephone expenses should be allocated to the responsible function based on a review of telephone bills, telephone logs, and so forth. Organizations often require employees to maintain telephone logs in order to control costs and abuses, and require employees to reimburse the organization for long-distance personal calls. Organizations should use the clearing account method to account for telephone expenses in the interest of accounting and payment expediency.

42

Policy

It is the policy of the Foundation to require employees to account for long-distance personal telephone calls and to reimburse the Foundation for those calls. Cell-phones owned or leased by the Foundation should be used for business purposes only, in order to most effectively implement usage plans without incurring additional usage fees. Procedure The Executive Director will review all phone bills to look for recurring numbers that may indicate an employee’s personal use of the Foundation’s phones for long distance calls.

TEMPORARY EMPLOYMENT AGENCIES

Discussion Organizations commonly utilize the services of temporary employment agencies to supplement the work force during periods of peak workloads. Use of temporary employment agencies should require an approval process and records on their use should be maintained for budget purposes and staff evaluation. Organizations also often hire employees of temporary employment agencies and pay the employment finder’s fee. These fees are generally included in the temporary employment agencies line item on the financial statements. Policy It is the policy of the organization to utilize temporary employment agencies to supplement the work force during peak periods. Use of temporary employment agencies requires an approved Request for Temporary Employee Form. Fees paid to hire the employees of temporary employment agencies are included in the temporary employment agencies line item in the financial statements.

VOIDED CHECKS

Discussion Checks are voided for many reasons, such as errors made in the course of preparing a check, duplicate payments made to vendors, stop payments issued on lost checks, or stop payments issued because of disagreements with vendors.

43

Regardless of the reason, it is essential that every voided check be accounted for and a voided checks log be maintained and available for the annual audit. Organizations should mark voided checks clearly with a “VOID” stamp, if the checks are physically available, and should file them in a voided checks file. If the physical check is not available (because it has been lost, for example), the Foundation’s copy of the bank’s stop-payment order should be filed in a stop-payment order file. Policy It is the policy of the Foundation to maintain a Voided Checks Log and document every check that has been voided, regardless of the reason. If voided checks are physically available, they will be stamped “VOID” and filed in the Foundation’s Voided Checks File. If voided checks are not physically available, the Foundation’s copy of the bank’s stop-payment order will be filed in a Stop-Payment Order File.

WRITE-OFF OF OLD CHECKS

Policy Checks older that 12 months will be written off in conjunction with year-end procedures if the checks in question do not exceed $20. When checks exceed this amount, contact with the payee will be initiated to resolve the issue. Written-off checks will be credited to miscellaneous income. A log of written-off checks will be completed and made available for the annual audit. Procedure The Program Assistant will compile a list of checks older than 12 months as part of the year-end process. The Executive Director will review the list and contact payees to make payment arrangements as appropriate. The Program Assistant will maintain a log of written-off checks and make it available for the annual audit.

INDEX: ACCOUNTING FORMS

Policy

44

The Foundation’s accounting forms and a brief explanation of their use should be included in this policy and procedure manual. Procedure Documents and forms included in this index: Activated Accounts log – tracks new or updated attorney/law firm accounts in the

AIMIOLTA 2 database Activated Banks log – tracks new or updated financial institution accounts in the

AIMIOLTA 2 database Bank Statement Review – records Treasurer/Deputy Treasurer review of monthly

financial accounts statements and check images Bank Certification Chart Board of Directors list – reflects current board members Checks Received log – tracks checks received through the mail or in person Chart of Accounts (current) – QuickBooks accounting program Conflict of Interest Statement – records director or employee declaration of

conflict(s) of interest Daily Batch Control Form – tracks individual financial institution lockbox

remittances included in daily lockbox deposit Employee Time Sheets – tracks employee personal and vacation time accrued and

used Financial Institution Certification form (annual) Inactivated Accounts log – tracks attorney/law firm accounts that have been closed in

the AIMIOLTA 2 database Inactivated Banks log – tracks financial institution accounts that have been closed in

the AIMIOLTA 2 database Monthly Journal Entry form – records accounting monthly accounting journal entries,

including documentation and notes Monthly Batch Control form – tracks all lockbox deposits made within a month Property & Equipment Inventory Records Destruction Log – tracks all destroyed records Reimbursement Request form – employee or director financial reimbursement form Voided Checks log – tracks checks that have been voided E:\USERS\DEETTE\corporate\board & agency policies\finance policies\2005proposed update incorporating auditor's commentsACCOUNTING AND FINANCIAL POLICIES.doc




FINANCIAL INSTITUTION CERTIFICATION (draft policy and procedure)

Policy Per SCR 20:1.15(cm)(2), WisTAF is required to certify IOLTA participating institutions on an annual basis and to maintain a list of certified IOLTA participating institutions on its website, to be updated by the time the State Bar of Wisconsin's bar dues statement is sent to attorneys each year. In addition, WisTAF must certify all new financial institutions within six weeks of the time the financial institution acquired IOLTA accounts, and update the published IOLTA participating institutions list as soon as the certification has been verified and accepted. IOLTA participating financial institutions certifications are good for the calendar year for which they are issued, up to March 1st of the following year (to allow time for the certifications to be made by financial institutions). The financial institution must certification all the following:

The financial institution meets the requirements of SCR 20:1.15(cm) (3) to (6); and,

The financial institution reports overdrafts on draft trust accounts and draft fiduciary accounts of lawyers and law firms to the Office of Lawyer Regulation, pursuant to the institution's agreements with those lawyers and law firms.

Procedure IOLTA participating institutions must be annually certified by April 1. WisTAF shall publish the list of certified IOLTA participating institutions as soon as possible after that date, but no later than May 1. The Program Manager will update the annual certification form by January 1 and submit it to the Executive Director for approval. Once approved, the Program Assistant will mail the certification form to all current IOLTA participating institutions, requesting rate and product information published by the financial institution. The Program Assistant will do an initial review of each returned certification form and make a recommendation to the Executive Director as to whether the financial institution is in alignment or needs to make changes. A letter to either effect will be sent out under the Executive Director's signature. For those financial institutions that need to make

changes, the financial institution is given a date by which it needs to verify with WisTAF that the changes have been made. If an IOLTA participating institution does not meet the compliance requirements by April 1, a letter shall be sent to the financial institution under the Executive Director's signature informing the institution that it will be removed from the list of IOLTA participating financial institutions at a specified date unless changes are made and communicated to WisTAF to bring the financial institution into compliance. WisTAF shall make all reasonable attempts to assist the financial institution to become compliant. If the IOLTA participating institution does not make the needed changes, WisTAF shall send a list of all known IOLTA accounts at that financial institution to the Office of Lawyer Regulation, which will notify attorneys and law firms with IOLTA accounts held that that financial institution that the accounts should be moved to a certified IOLTA participating institution. The de-certified financial institution shall be copied on the letter and the published list of IOLTA participating institutions shall be modified as appropriate. All uncertified financial institutions with IOLTA accounts shall be issued a compliance form upon notification to WisTAF. WisTAF shall verify the financial institution's certification as quickly as possible. Once compliance is verified, WisTAF shall immediately update its list of IOLTA participating institutions.

CONTROL OVER AUTOMATED CLEARING HOUSE (ACH) TRANSMITTALS: GRANTS (draft)

Policy A person not creating the ACH file or initiating the ACH transfer will review all ACH transactions prior to being transmitted. All electronic transactions must be approved for transmittal by two people, using unique, approved log-ins. The date of disbursal may be modified by the decision of the Grants/Evaluation Chair and the President at the Executive Director's request. Passwords and transmittal codes for the ACH transmissions shall be maintained per policy under "Control Over Automated Clearing House (ACH) Transmittals: Banks." Procedure The Program Manager shall request grantee business account and bank routing number information at the time that grants conditions agreements are sent out to grantees. The Program Assistant shall record the information for use in a .cvs file or other electronic upload form. The original forms shall be permanently stored in a secure area. Prior to disbursal, the Executive Director will create a list of grantees to be paid, with grant amounts provided as well as the intended disbursal date. If the disbursal date falls upon a weekend, the disbursal shall be made on the following Monday. Each grant type shall be treated as a separate ACH transmittal. The Program Assistant shall create an ACH transmittal file for each grant type and upload it/them to the secure electronic banking site. The Program Assistant will then forward the Executive Director's approval to the Program Manager, who will check the uploaded ACH files against the approval. Once verified, the Program Manager shall approve the file for transmittal.

1

WISCONSIN TRUST ACCOUNT FOUNDATION, INC. Board of Directors Meeting

American Family Insurance, Madison, WI October 6, 2010

APPROVED MINUTES

Attending: Dean Dietrich, President; N. Lynnette McNeely, Vice President; Hon. Glenn Yamahiro, Secretary; Tricia Knight, Treasurer; Joel Bailey; Thomas Basting, Sr.; Kristin Bergstrom; John Bermingham; Sarah Fry Bruch; G. Jeffrey George; Hon. Marc Hammer; Nicholas Zales. Also attending were De Ette Tomlinson, Executive Director and Rebecca Murray, Program Manager. Excused: Lee Atterbury Unexcused: Robert Wachuta Guests: Jim Brennan, Catholic Charities of the Archdiocese of Milwaukee, Barb Graham, Catholic Charities of the Archdiocese of Milwaukee; Jeff Brown, State Bar of Wisconsin; Tom Cannon, Legal Aid Society of Milwaukee; Rosemary Elbert, Wisconsin Judicare; Colin Good, AIDS Network; Anita Cruise, KidsMatter; Brynne McBride, ABC for Health; Jason Mishelow, Centro Legal; John Ebbott, Legal Action of Wisconsin; Deedee Rongstad, Legal Action of Wisconsin; Gricel Santiago-Rivera, Wisconsin Coalition Against Domestic Violence; Jennifer Binkley, Community Justice, Inc.; Alyssa Mahaffay, Community Justice, Inc.; Chuck Berendes, Catholic Charities of the Diocese of La Crosse Meeting Materials:

Cover Memo - 10/06/2010 Board of Directors Meeting Agenda - 10/06/2010 Board of Directors Meeting May 6, 2010 Unapproved Board meeting minutes Executive Director Report August 31, 2010 Balance Sheet 2003-2010 Monthly IOLTA Income August 31, 2010 Profit and Loss v. Budget by Class 2010 v. 2009 YTD Profit and Loss Comparison 2011 Proposed Budget 2008-2012 Rotating Budget 2011 Proposed Budget Narrative 2011 Grant Recommendations Summary Memo 2011 IOLTA & PILSF and 2011-2012 State Appropriation Grant Recommendations Map To American Family Insurance Training Center, Building A Conflict of Interest Statement (please complete and return to Becky or De Ette) 2010-2011 Updated Board List (for your records) February 5, 2010 Approved Board Minutes (for your records)

I. Call to Order

The meeting was called to order by President Dietrich at 1:35 p.m.

II. Approval of Minutes

There were no corrections to the May 6, 2010 minutes. Upon a motion by Bermingham/Basting, the May 6, 2010 WisTAF Board meeting minutes were unanimously approved.

2

III. Officers’ Reports A. President’s Report. President Dietrich reported that he attended the Legal Services Corporation (LSC)

reception held in Milwaukee on July 29, 2010.

President Dietrich also reported that 25 percent of the 2010-2011 State of Wisconsin Civil Legal Services State Appropriation funding had been distributed to grantees. Discussions with the Wisconsin Department of Administration re. distribution of the remaining funding are currently taking place. This matter will be discussed further in the executive session. Legal Action of Wisconsin submitted a civil Gideon petition with the Wisconsin Supreme Court on Thursday, September 30, 2010. President Dietrich anticipated that a hearing on the petition will take place in the spring of 2011. Three of four newly appointed members of the WisTAF Board of Directors have been oriented and WisTAF’s committee work has begun.

B. Treasurer’s Report. This report was deferred to the Finance/Investment Committee Report.

C. Executive Director’s Report. Tomlinson reported that the only additions to her print Executive

Director’s report contained in the original meeting materials are that the Wisconsin Equal Justice Fund, Inc. (WEJF) grant disbursement process was expedited after receiving WisTAF Executive Committee approval.

Tomlinson also reported that the ABA has asked all IOLTA program board of directors members to act as liaisons with their state bar associations and access to justice commissions regarding advocating for the extension of unlimited insurance coverage on IOLTA accounts that was mistakenly omitted from legislation enacted earlier this year. The Eighth Annual Howard B. Eisenberg Lifetime Achievement Award Dinner, hosted by WEJF, will take place in Milwaukee on November 13, 2010. Tomlinson asked WisTAF board members to contact her with any interest in donating the price of an event ticket in exchange for recognition of WisTAF in the event program.

President Dietrich questioned whether WisTAF had moved forward with plans to distribute grants electronically. Tomlinson responded that M&I offers a Treasury Management product that currently is being looked into for this purpose. The process would result in grantees receiving their funding immediately as well as the implementation of better internal financial controls. Bermingham asked what this would mean for the requirement that an officer “sign” grant checks. Tomlinson proposed that she draft a memo authorizing such electronic transactions that the president could sign off on. McNeely questioned whether this process change would necessitate a formal policy change. Tomlinson responded that she is in the process of drafting finance policies and would be happy to incorporate the required language, if needed.

IV. Committee & Liaison Reports

A. Executive Committee. President Dietrich reported that the Grants/Evaluation Committee reviewed WEJF's letter of August 3, 2010 and recommended that the 2010 WEJF grants be made per the amounts requested in the letter. The Executive Committee approved the distribution of recommended WEJF funds in order to release them as quickly as possible. He also informed the Board that the Executive Committee does not intend to conduct business, rather, the bulk of WisTAF’s work is to be conducted at the Board level. [A copy of the August 3, 2010 WEJF letter is attached to these minutes. The Grants/Evaluation Committee recommendation was approved by the Executive Committee on September 17, 2010.]

President Dietrich asked that Board members sign and return their conflict of interest statements to Tomlinson or Murray as soon as possible.

3

B. Finance & Investment Committee. Treasurer Knight summarized highlights contained in the balance sheet, profit & loss statement, and actual-to-date v. budget report (distributed as part of meeting materials).

C. Grants & Evaluation Committee. President Dietrich reported that the Grants/Evaluation Committee

met on September 8, 2010 to make grant recommendations based on the applications received. The G/E Committee sent its recommendation report to the Board following the meeting.

Grants/Evaluation Committee Chair Bermingham reported that there were no concerns with any of the 2010 grantees raised via the spring site visits. Based on this, along with the fact that that the available 2011 funding for grants was consistent with 2010 levels, the G/E Committee used 2010 grant amounts as a starting point in determining recommended 2011 grant amounts. The factors used in making 2011 grant recommendations remained consistent with past years and included: geographic coverage in relation to service needs; the degree to which an agency is able to recruit and use pro bono attorneys; the ability of an agency to generate non-WisTAF funding; and the level of past WisTAF support. Zales questioned whether any grantee appeals had been received. Tomlinson reported that she had received none.

Bermingham/Zales moved that the 2011 grant recommendations be approved as presented to the Board. Discussion followed regarding the likelihood of release of the 2011-2012 state appropriation funds from the Wisconsin Dept. of Administration and how this may impact grant amounts. Judge Yamahiro commented that while the G/E Committee used 2010 grant levels as a starting point for making 2011 grant recommendations, the September 8 meeting was quite comprehensive and discussion took place regarding the need to look at potential holes in service delivery across the state that are being met by smaller providers. Motion passed unanimously. [A copy of the approved 2011 IOLTA and PILSF grants and approved provisional 2011-2012 state appropriation grants is attached to these minutes.]

D. Personnel Committee. Personnel Committee Chair McNeely reported that the executive director annual

evaluation had been conducted online and that the results of the evaluation would be shared during the executive session.

E. Access to Justice Commission. Judge Yamahiro reported that he attended the July 27, 2010 Access to

Justice Commission meeting in Stevens Point. At the meeting, it was reported that the State Bar of Wisconsin approved the Commission’s 2011 budget request and authorized support from Pro Bono Coordinator Jeff Brown. After lengthy discussion re. the Commission’s purpose and scope, it was determined that the Commission’s charge was broad; innovation was important; priorities needed to be established; and outcomes of quality, not just access to the courtroom, were important.

Four committees were created to further this purpose: Public Awareness and Justice Education; Delivery of Services; Courts and Administrative Tribunals; and Research and Resource Development. Judge Yamahiro is a member of the Public Awareness and Justice Education Committee and the Courts and Administrative Tribunals Committee, while Tomlinson has applied to be on the Research and Resource Development Committee.

V. Old Business

A. Update on TANF Funds. Tomlinson reported that she sent a letter to the Department of Children and Families in spring 2010 requesting the $100,000 TANF funds contained in the state budget. She has not yet received a response and will follow-up. McNeely offered to help in any capacity needed.

4

VI. New Business A. 2011 Budget and Grant Levels. Knight reported on WisTAF’s 2011 budget proposal, which she

thought reflected a conservative budget. Expenses in the areas of comparable interest implementation (marketing), conference attendance, and salaries (excluding the executive director position) were increased over 2010 levels. The line of credit interest expense was reduced due to a drop in interest rates. Projected 2011 revenue and expense associated with IOLTA, PILSF and state appropriation remained consistent with 2010 levels. President Dietrich questioned whether there was a need to revisit projected PILSF revenue based on the State Bar’s announcement that it had received 150 hardship waivers this year compared to the approximately 40 waivers normally received in a year. Tomlinson responded that her understanding is that 150 waivers had been requested but that the number doesn’t reflect those actually granted. She also informed the Board that she typically leaves a buffer in the PILSF revenue projection from one grant year to the next.

President Dietrich questioned whether WisTAF was hurting itself by carrying a line of credit balance.

Bailey responded that it depended on how investments perform. In the long-term WisTAF has a good balance and it made sense to keep some liquidity. The issue will be visited during the financial advisor RFP process later this year.

2011 IOLTA, PILSF and State Appropriation revenue and expense projections remained consistent with

2010 levels at $250,000 (IOLTA), $870,000 (PILSF) and $2,546,100 (State Appropriation). Upon motion by Knight/Bermingham, the 2011 budget was approved as presented. Motion passed

unanimously. [A copy of the approved 2011 WisTAF budget is attached to these minutes.]

B. Election of Member-at-Large to Executive Committee. Thomas Basting, Sr. agreed to be nominated to fill the vacancy for the position of Executive Committee Member-at-Large. Upon motion by George/McNeely, the nomination was approved. Motion passed unanimously.

C. Prime Partner Project. Murray reported on current efforts to promote WisTAF’s Prime Partner

program to IOLTA-participating financial institutions. As part of that effort, Board members will be asked to voluntarily contact their banks and encourage them to become Prime Partners. The campaign will begin in mid-November.

D. WisTAF’s 25th Anniversary. Tomlinson reported that staff have begun discussion of how and when to

commemorate WisTAF’s 25th anniversary. Several milestone options exist including the date WisTAF was established by the Wisconsin Supreme Court (March 21, 1986); the date WisTAF made its first grant decisions (November 26, 1987); and the date grant funds were first distributed to grantees (January 1, 1988). After discussion the Board determined that it would prefer to memorialize the foundation’s primary purpose and activity (distribution of grants) and recognize both service providers and past board members in the most cost-effective and meaningful way possible. Further planning will take place at the staff level.

VII. Executive Session and Adjournment

Board entered into executive session at 3:15 p.m. Tomlinson and Murray participated until 4:15 p.m. Board moved back into open session at 4:45 pm. and the meeting was immediately adjourned.

Approved on: February 16, 2011

Signed by: Tricia Knight, Secretary Date Signed: ________

051811 meeting materials cover memo final · Zales asked whether there had been or will be new...

Documents

Transcript of 051811 meeting materials cover memo final · Zales asked whether there had been or will be new...