ARTICLES

• How to Read Financial Statements
• Five Healthy Financial Management Tips
• How a webinar series spawned leads and fueled income
• 3 Budgeting Tactics for Reducing Losses Caused by COVID-19

CHAPTER Q&A

Q: As a past Treasurer, what should I prepare for the transition meeting?

A: As complicated as this may seem, the preparation for this meeting mostly involves the transfer of documents, records, and contacts. It is important to compile all finance-related notebooks, binders, transaction logs, files, records and electronic document folders to hand over in the transition. These documents may include:

• Calendars, timelines, budgeting deadlines, deadlines for applying for university funding and debit cards.
• Process for depositing and pulling money from accounts held by the chapter. The past officer should also go through this process step by step with the new officer for the first use of money.
• Templates for sponsorship letters and thank you notes to donors.
• Budgeting and financial documents from previous years.
• Assessment of profits, losses, and current assets such as supplies, inventory, materials, and resources.
• Login information for school and financial institution accounts.

Q. What does Accounts Payable entail?
A. It is important that chapters establish approval and authorization procedures for writing checks. The Treasurer/CFO/Financial Officer, who draws the checks, should not also have authority to approve expenditures based on their signature alone. These control procedures should address:

• What backup documentation (expense reports, bills etc.) is required?
• What approval is required for each type of expenditure and in each budget area?
• In what circumstances is more than one approval necessary? Usually there are three:
  1. over a certain dollar amount
  2. for items that were not budgeted
  3. when the variance from budget exceeds certain limits
• At what dollar amount are two signatures required on checks?
• How frequently will checks be drawn?

Q. When do we have to file with the IRS each year?
A. Tax filings are due the 15th day of the 5th month after your tax year ends. If you do not file the e-postcard/990-N/990-EZ for three years in a row, you will lose your tax-exempt status. Click here for a link to the IRS website, so you can verify the form you need to use and instructions to complete the forms.

Q. How can I check my chapter’s nonprofit status?
A. You can search the California Secretary of State’s website for your chapter name to see your status. Click on the Business tab and Search by Business. Be sure to search using both the acronym CAMFT and “California Association of Marriage and Family Therapists” written out.

Q. How long do I need to keep financial records?

• Accounts receivable spreadsheets and bank statements - Permanently
• Accounts payable spreadsheets and checks - Permanently
• Annual financial statements and audits - Permanently
• Tax returns - Permanently
• Payroll records - Permanently
• Organizational documents (charters, by laws, etc.) - Permanently
• Membership records - 3 complete years
• Supporting documentation (such as paid invoices & cash receipts) - 3 complete years
• Insurance policies - 3 complete years

Q. What are examples of how chapters can use their reserves?
A. YCAMFT has a newly revised Reserve policy which may be useful to review. If your chapter is holding reserves in an investment account, you should also have an investment policy. Click here to view CAMFT's Investment Policy.

Q. Can we have sponsors for our events?
A. Yes! If you would like an example of the disclaimer that CAMFT uses regarding sponsors, please email Michele Champion, Outreach Coordinator at mchampion@camft.org for more details.

Q. Help! Online scammers are targeting our chapter and posing as a board member over email to request money!
A. If any board member receives an out-of-the-ordinary request for money by email, please call the “sender” of the email to verify. Scammers often pose as chapter presidents and email the treasurer to request money be wired or sent via check. They often use a generic email address, one similar to the actual email address, or even mask their email to make it appear that it came from the president’s email address. Please do not hesitate to confirm with another method of communication if the request for payment is not expected or the language seems “off.” It is a best practice to establish approval and authorization procedures for writing checks.

CHECKLIST OF CHAPTER FINANCIAL DEADLINES

Chapters need to provide documentation to either CAMFT, the IRS, or their Insurance Carrier. Refer to the table below for IRS and Insurance deadlines. Refer to section III e) for CAMFT deadlines.

Q. 1099 vs Employee: How can I be sure to classify a worker correctly as either staff member, or independent contractor?
A. In April 2018, the California Supreme Court adopted the so-called ABC test for state wage-order claims in Dynamex Operations West v. Superior Court. Under the new analysis, all three of the following factors MUST BE MET for a worker to be properly classified as an independent contractor:

1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
2. The worker performs tasks that are outside of the usual course of the hiring entity's business.
3. The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

Q. Does California's stringent independent contractor test apply retroactively, or only to new miss classification claims?
A. The 9th U.S. Circuit Court of Appeals withdrew its recent decision on the matter and asked the California Supreme Court to weigh in. Miss classification claims are a frequent source of litigation because employees are entitled to a minimum wage, overtime pay and other benefits that independent contractors don't get. The California Supreme Court adopted a strict employee-friendly independent contractor standard in 2018, and earlier this year, the 9th Circuit held that the test applies retroactively.

strong>Many business groups were unhappy with the decision. Making the test retroactive may subject employers to liability for miss classifying workers as independent contractors even before the test was made law. In a July 22 order, however, the appeals court granted the employer's petition for a rehearing and said it would send the question about retro-activity to the state high court to decide.

Q. Does the ABC test apply only to wage-order claims in California?
A. Yes. Different tests may apply under other state laws.