Club Governance Essentials: By-Laws, Insurance, Reporting, Budgets, and More
Discover key aspects of club governance including by-laws, insurance, regular reporting, budgeting, signing authorities, and audit requirements. Learn about maintaining separate accounting records, paying dues promptly, and ensuring fidelity insurance coverage for your club.
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Presentation Transcript
TOPICS Club by Club by- -laws laws Insurance Insurance Regular reporting Regular reporting Signing authorities Signing authorities Annual budgets Annual budgets Variance from budgets Variance from budgets One service account strategy One service account strategy Audit Audit
BY-LAWS New by New by- -laws laws - - Article 8 Funds & Accounting Article 8 Funds & Accounting - -Services activity dollars can only be used for service projects Services activity dollars can only be used for service projects Separate accounting records must be maintained for service funds and Separate accounting records must be maintained for service funds and administrative funds. (There is no requirement to maintain separate bank administrative funds. (There is no requirement to maintain separate bank accounts but it would sure be easier) accounts but it would sure be easier)
Hint Hint don t have too many funds don t have too many funds the Board could lose control of the club funds. the Board could lose control of the club funds. Club by Club by- -laws require that the Board adopt separate budgets of predicted income and laws require that the Board adopt separate budgets of predicted income and expense for the service and administrative funds. expense for the service and administrative funds. Club board will ensure that all dues, fees and obligations to KI or it s districts will be Club board will ensure that all dues, fees and obligations to KI or it s districts will be paid promptly paid promptly
Annual dues to KI are payable by December 31 Annual dues to KI are payable by December 31 Annual dues to the Lieutenant Governor should be paid as soon as possible after Annual dues to the Lieutenant Governor should be paid as soon as possible after his/her budget is approved at the first DCM his/her budget is approved at the first DCM
INSURANCE Always Always ensure that your club has purchased Fidelity Insurance coverage ensure that your club has purchased Fidelity Insurance coverage Claims have been incurred Claims have been incurred 8 to 10 years ago 2 8 to 10 years ago 2 Last 18 months 3 Last 18 months 3
REGULAR OPERATIONS Board should approve the number of signing officers. For best results there should Board should approve the number of signing officers. For best results there should be 2 signers on be 2 signers on all all cheques cheques (protection for the club as well as the individual (protection for the club as well as the individual signers) signers) Each Each signer should review the supporting documentation and initial them for signer should review the supporting documentation and initial them for cancellation cancellation Use budgets for each account Use budgets for each account
Important to deposit all receipts quickly Important to deposit all receipts quickly Stay on top of dues receivable Stay on top of dues receivable several clubs provide for a maximum delinquency several clubs provide for a maximum delinquency period for collection after which the member becomes subject to having their period for collection after which the member becomes subject to having their membership terminated. (Arrangement for payments can be mutually agreed membership terminated. (Arrangement for payments can be mutually agreed upon) upon)
OPERATING ACCOUNT BUDGET Prior year activity adjusted for known changes Prior year activity adjusted for known changes Expenses tend to be static Expenses tend to be static Dues income can be predicted based on approved annual dues Dues income can be predicted based on approved annual dues Provide for inflationary increases Provide for inflationary increases
SERVICE FUND BUDGET Less predictable Less predictable Repeating project Repeating project use last year s numbers as a starting point use last year s numbers as a starting point Ensure all projects and estimated income are approved by Board Ensure all projects and estimated income are approved by Board Possible strategy for Service Project expenditures Possible strategy for Service Project expenditures
SERVICE ACCOUNT STRATEGY Spending on service projects for current year will be limited to the amount of service Spending on service projects for current year will be limited to the amount of service fundraisers in previous year fundraisers in previous year
VARIANCES FROM BUDGET NO need to recast the budgets NO need to recast the budgets Explain variances to Board meeting and get the action approved Explain variances to Board meeting and get the action approved
MONTHLY REPORTING Treasurer prepares monthly statements for Board (preferably with budget amounts) Treasurer prepares monthly statements for Board (preferably with budget amounts) After review Board approves After review Board approves Personal pet peeve Personal pet peeve budgets are carved in stone budgets are carved in stone WRONG WRONG Don t have to spend Don t have to spend New projects (not in budget) can be supported New projects (not in budget) can be supported
CLUB REPORTING Periodic financial reporting to club members Periodic financial reporting to club members Fiduciary duty to club satisfied Fiduciary duty to club satisfied Members may have valuable input which would generate improvements Members may have valuable input which would generate improvements
AUDIT By laws provide financial records will be examined annually by either (a) a qualified By laws provide financial records will be examined annually by either (a) a qualified accounting firm accounting firm not not affiliated with any club member or (b) a standing financial affiliated with any club member or (b) a standing financial review committee (2 or more members with financial or accounting experience review committee (2 or more members with financial or accounting experience excluding Board members) as provided in club policy excluding Board members) as provided in club policy Written report of examination shall be submitted to the Board. Written report of examination shall be submitted to the Board.
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