Expenditures Examples of expenses that are permissible, including those from the president’s discretionary accounts, should be clearly communicated in Expenditures that the foundation’s policies. For any allowable expense, a brief description should generally be of how these types of expenses are for the benefit of the foundation or addressed in the campus should be provided. foundations’ policies: Business meeting Foundations must clearly document the approval process for expenses. hospitality Foundations should consider establishing a threshold amount when expenses require the approval of the board or a committee of the board. Country club membership dues Records must be maintained to document the business purpose or (some portion may benefit to the campus for each expense. Documentation for food and be taxable) other expenses for meetings, luncheons, dinners, conferences, and fundraising events should include original detailed receipts and invoices, Donations the names of attendees, the business or campus related purpose, and a Employee bonuses copy of the flyer or agenda for the event. In addition, detailed receipts and invoices must be maintained to support all expenses on the monthly Employee credit card statements. activities Scholarships Foundations should periodically review award criteria with donor – Entertainment agreements to ensure scholarships are appropriately awarded. Finance and late CPA Management Letter - As part of the audit of the financial statements, charges foundations should require their independent auditors to provide a management letter outlining any recommendations for improvements and the foundations Flowers should prepare a corrective action plan with a timeline to complete the Gifts corrective action. Personal expenses Required Reporting Foundations should file all required reports in a timely – (never allowed or manner including Forms 990, 1099, W-2, and 941 (Internal Revenue Service), taxable) CHAR500 (New York State Attorney General), and any other required reports. The foundation also needs to ensure certain taxable benefits such as personal Relocation expenses use of an automobile are properly accounted for and recorded. Social and sporting events including Charitable Gift Annuity (CGA) Compliance Foundations that are writing CGAs – tickets must register with the NYS Insurance Department as required by Section 1110 of NYS Insurance Department code and must also meet the annual filing Spousal or dependent requirements. travel Travel
Expenditures that should generally be addressed in the foundations’ policies: Business meeting hospitality Country club membership dues (some portion may be taxable) Donations Employee bonuses Employee activities Entertainment Finance and late charges Flowers Gifts Personal expenses (never allowed or taxable) Relocation expenses Social and sporting events including tickets Spousal or dependent travel Travel Expenditures Examples of expenses that are permissible, including those from the president’s discretionary accounts, should be clearly communicated in the foundation’s policies. For any allowable expense, a brief description of how these types of expenses are for the benefit of the foundation or campus should be provided. Foundations must clearly document the approval process for expenses. Foundations should consider establishing a threshold amount when expenses require the approval of the board or a committee of the board. Records must be maintained to document the business purpose or benefit to the campus for each expense. Documentation for food and other expenses for meetings, luncheons, dinners, conferences, and fundraising events should include original detailed receipts and invoices, the names of attendees, the business or campus related purpose, and a copy of the flyer or agenda for the event. In addition, detailed receipts and invoices must be maintained to support all expenses on the monthly credit card statements. Scholarships – Foundations should periodically review award criteria with donor agreements to ensure scholarships are appropriately awarded. CPA Management Letter - As part of the audit of the financial statements, foundations should require their independent auditors to provide a management letter outlining any recommendations for improvements and the foundations should prepare a corrective action plan with a timeline to complete the corrective action. Required Reporting – Foundations should file all required reports in a timely manner including Forms 990, 1099, W-2, and 941 (Internal Revenue Service), CHAR500 (New York State Attorney General), and any other required reports. The foundation also needs to ensure certain taxable benefits such as personal use of an automobile are properly accounted for and recorded. Charitable Gift Annuity (CGA) Compliance – Foundations that are writing CGAs must register with the NYS Insurance Department as required by Section 1110 of NYS Insurance Department code and must also meet the annual filing requirements.
Audit-Guidance_Campus-related-Foundations.docx