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APICS Southeast District Meeting
Louisville KY
June 5-6, 2009
APICS Chapter Finance 101
Randell C. Eldridge, CPIM, C.P.M.
Falls Cities Chapter
District Staff
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Agenda
• C-Bar Requirements
– Audits/Review
– Budget
• Monthly review
– Liability Insurance
– IRS Requirements
• State tax requirements
• Incorporation
• Wrap up
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C-Bar Financial Requirements
Section 1
F. Financial Responsibility
1. Has the chapter provided APICS with a letter
of assertion from the chapter board of directors
stating that the chapter financial records fairly
state the assets, liabilities, revenues, and
expenditures of the chapter and that all required
regulatory filings have been made in a timely
manner? (Attach letter of assertion regarding
finances.)
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C-Bar Financial Requirements
Section 2
F. Financial Responsibility
1. Did the chapter formally manage a budget of planned vs. actual?
(Attach a copy of the chapter's year end report.)
2. Did the chapter purchase general liability and/or directors and
officers liability insurance?
3. Did the chapter file IRS Form 990 (including checking box K if less
than $25K) or other applicable federal tax form for the past fiscal
year? (If no tax form is required, submit a signed statement to
that effect.)
4. Did the chapter have an audit committee review the financial
records for the year and did it develop a plan to meet all audit
recommendations?
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Audit/Review
Audit/Review
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Audit/Review
• Should the Chapter have a Review or an Audit?
• This is a value judgment
– Benefits versus cost must be weighed
– A review as a minimum is required
• Use good business practice such as
– Incoming/Outgoing officers
– When was last Audit
– Should be periodically - every 2 or 3 years
– Substantial change in money income or expenses
– What do your procedures say
• Provide comfort to BOD-Liability issue
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Audit/Review
• Either must be performed after year end report
• Not less than an independent Periodic review
should be done
• Review/Audit committee should check
– Financial procedures
– Accuracy of financial statements
– Assure Chapter financial Stability
• BOD member should not do the Audit
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Review
• Review is all that is needed for C-Bar Section 1
• A review requires a formal “Attach (Signed) letter of
assertion regarding finances.”
• Send in with C-Bar submission
• Recommend a review committee
• Chaired by someone not on the Board
– May contain board members
• Benefits of a review
– Is not as costly
– Can be just as good as and audit
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Audit
• Should be done by an Independent Auditor
• Benefits of Audit
– Assurance financial statements are properly represented
– Conform to general accepted accounted practices
– Assure adequate procedures are in place
– Provides BOD with actionable information
• An Audit when performed
– Should be done by non Board member
– Can be a Chapter member
IF IRS AUDITS YOUR CHAPTER NOTIFY APICS
IMMEDIATELY
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Budget
Budget
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Budget
What is needed for preparation of a budget?
• Operating Plan for the year
– PDM’s, Certification Classes, Membership
Seminars, District meetings, number to attend
• Chart of accounts
• Current actual
• Officers input
• Treasurer to combine into a master proposed
budget
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Budget
• Board must review and approve
• If it must be revised before approval
• REVISE the OPERATING PLAN FIRST
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Budget/Monthly Review
• C-Bar requires-
– “Did the chapter formally manage a budget
of planned vs. actual?”
• Review monthly performance to budget
• If there is a significant variance determine what
action is to be taken
– Significant must be defined by each Chapter
• Have a formal motion on actions to correct
Significant variances
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Liability
Liability Insurance
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Liability Insurance
• Review liability insurance offer
• Memo dated
• Deadline June ???
• Effective July 1st ?
• Every chapter should have liability insurance
• It must be renewed yearly
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Liability Insurance cont.
• Does not cover everything
– Review carefully
• Available from central provider
– $1,000,000 per occurrence
– $2,000,000/yr aggregate
– $75 per year
• Recommended every Chapter get Liability
Insurance
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IRS and state taxes
IRS Requirements
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IRS Requirements
• EIN Employee Identification Number
– Form SS-4
– No fee
• Tax Exempt Status
– Form 1024
– 501 (c)(6)
– Can apply for 501 (c)(3) Not recommended
• APICS has a blanket 501(c)(6) exemption
– See next slide on how to apply
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Group Exemption Process
What’s APICS needs?
• A statement requesting coverage
– Simple request on Chapter letterhead
– Signed by current officer of Chapter
• Include Employee Identification Number or completed
form IRS Form SS-4
• A declaration of purpose and activities including sources
of receipts and nature of expenditures
• Copy of By-Laws or other governing instrument
Send above to “Finance Division at APICS
Headquarters”
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990 Filing
Significant Change from Last Year
2007 Requirements
2008 Tax Year Form to
(Filed in 2009 or 2010) File
Gross receipts normally ≤ $25,000 990-N
100,000
Gross receipts > $25,000 and < $ 1 million, 990-EZ
250,000
and Total assets < $2.5 million or 990
Gross receipts ≥ $1 million, or
100,000
990
Total assets ≥ $2.5 million
250,000
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IRS Requirements
• Form 990-T
– Unrelated business income >$1,000
• Advertising in newsletter
• Sale of mailing list
• Web site advertising
– Items with LOGO are usually exempt
• By the 15th of 5th month after FY end
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IRS Requirements
• Form 1099-MISC (Instructors and Speakers)
• Total revenue paid to individual exceeds $600
– Services
– Honorarium
– Awards
• Any reimbursable expense without receipts
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State Sales Taxes
• Every state is different
• Two main issues
– Payment of sales taxes on what you buy
– Collection of sales taxes on sales
• Books provided as part of seminar fee are exempt
• Books sold for seminar but not part of fee “may”
require sales tax (check with your state)
• Most states require a tax exempt number
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Incorporation
Incorporation
Status and process
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Chapters reporting Yes Inc.
• Appalachian • Florida West Coast
• Blue Grass • Foothills
• Central Carolina • Hampton Roads
• Central Georgia • Industrial Crescent
• Charlotte • Mid Tennessee
• Eastern North • Ohio Valley
Carolina • Piedmont Triad
• Falls Cities
• Florida Gulf Coast
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Chapters not responding (Inc?)
• Cape Fear • North Central Florida
• Central Savannah River • Northern Kentucky
• Chatahoochee Valley • Puerto Rico
• Emerald Industrial • Puerto Rico Oeste
• Florida Southeast • South Florida
• Golden Circle • Southern Alabama Area
• Greater Jacksonville • Tar River
• Gumtree • Tennessee Valley
• Heartland of Kentucky • Triangle
• Mid Florida • Upper Cumberland
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Chapters reporting NO
• Asheville • Great Pee Dee Area
• Atlanta • Memphis
• Birmingham • New Orleans
• Central Alabama • Northeast Alabama
• Charleston • South Central Mississippi
• Florida Gold Coast • Tri-State
• Florida Space Coast Mid Carolina- Don’t know
Gaston area- Don’t Know
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Chapter Incorporation
• Recommend all Chapters be Incorporated
• Provides a liability shelter to officers and
directors
• Chapter can sue or be sued
• Cannot seize the personal assets of the leaders
• “…the only rock-solid protection for personal
assets…”
EXTREMELY IMPORTANT
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Chapter Incorporation
How can incorporation be done?
• Going to start a program for interested Chapters
• Will need assistance from you if your Chapter is
incorporated already
• Regulated by individual states
• Each state requirement is different
• Can’t do once and forget
• Yearly requirement different in each state
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Chapter Incorporation
• Retain a lawyer ??
– Recommend to at least get a lawyer to review
before submission
– Pro Bono hours
• Need
– Articles of Incorporation Appendix L
– By Laws
• Most states require approval of By-Laws after
Incorporation is approved
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Agenda
• C-Bar Requirements
– Audits/Review
– Budget
• Monthly review
– Liability Insurance
– IRS Requirements
• State tax requirements
• Incorporation
• Wrap up
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APICS Handbook
Finance/Treasurer Chapter
Leadership Handbook
Stock # 01003
$30.00 nonmember
$15.00 APICS member
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See You in Charlestown
Thanks for attending
I will be here
The rest of the day
To answer questions
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