809.2
812.l
812.6 (new)
813.
813.l
813.2
Exhibit A - page 3
Distribution of Audit Report (continued) b. Members
A copy of the· annual report shall be sent to members of the Board, Past Presidents, governors and district secretaries, and, upon request to other Kiwanis members.
b. (1) Add. - In districted areas, unless a fiscal agent is appointed by the International Secretary, the district governor ...
Carrying Value (Renumber present 812.l to 812.2, etc.)
a. Donated investments are recorded at their fair market value at date of receipt. The initial fair market value will be considered the cost of the investments for purposes of computing lower of cost or market adjustments.
b. All inv~stments classified as a current asset shall be carried at lower of cost or market.
c. Investments shall be carried at cost and written down only when the market value has declined below cost and the decline
is deemed to be a permanent impairment.
Pooled Investments
If
investments for the various funds participate in a pool, gains or losses. and income will be allocated proportionately.The following are all "new" sections Accounts Receivable
Amount
Under the accrual basis· of accounting, income is recorded as when earned even if it has not yet been received.
Dues and Subscriptions a. Club
Accounts receivable for dues and subscriptions shall be recorded for active and non-service clubs but not for non-meeting clubs.
b. Adjustments
At each regular meeting of the Board, the Committee on Finance shall review the accounts receivable. Any adjustments shall be made in. accordance with Section 814. 2.
813.3
813.4
813.5
813.6
813.T
814.
814.1
814.2
Exhibit A - page 4
Supplies
A club or person must pay cash or by credit card for the purchase of supplies. If an order is received and the amount of payment
tendered equals 90% or more of the total amount due, or the difference is less than $10.00, the order will be processed and the club
or·person will be billed for the balance due.
Extension of Credit
a. A district may have credit extended for the purchase of supplies or other purposes. The credit limit for any district shall be $5,000 and for a period not to exceed 90 days.
b. Clubs or individuals are required to pay cash or by credit card for ~11 amounts payable to Kiwanis International.
Inter-Kiwanis Family Accounts
Accounts receivable and offsetting_ accounts payable may be
main.;ained· among Kiwanis, Key Club, Gire le K and the Foundation.
Such accounts shall be settled at least monthly, and interest shall ba charged on the average monthly balance at the average rate currently being paid on investments.
Direct Write-offs
Quarterly, any account receivable from clubs or individuals with a. balance of $2.49 or less and past due more than 90 days will be: written off.
Delinquent Clubs Re Convention
Approximately 60.days prior to the International Convention,
each club that is financially delinquent to Kiwanis International will be informed that its official delegates cannot be seated unless such delinquency is paid. The Certificate of Election of Delegates and Alternates sent to all clubs shall also carry this information.
Allowance for Uncollectible Accounts Amount
An allowance for uncollectible accounts shall be maintained in a reasonable amount.
Adjustments
a. Accounts receivable, if deemed uncollectible, shall be charged against the allowance.
b. A list of charge-offs of acco~nts receivable must be
~ubmitted to the Committee on Finance and to the Board.
815.
815. l
815.2
UAJ.J..J.J.J.J...1... J;°l,,
Inventories Carrying Value
Supplies, printed materials and other items shall be carried in inventory first in, firs~, out1 cost or market, whichever /.
is. lower. Generally, any item. 'in inventory which will take three years or more to sell will be carried at a nominal value.
Records
Perpetual inventory records shall be maintained and periodic·
physical inventories on selected items shall be taken to verify the items on hand. A complete physical inventory shall be taken at least annually.
815.3
·Purchase Systems816.
816.1
816.2
816.3
819.
819.1
a. The International Secretary shall develop a purchase order receipt· of goods and payments systems as described in Section
821.
b. Vendor- selection, when practical, shall be on a bid basis.
Building, Furniture and Equipment Capitalized Value
The capitalized value of the International Office furniture, fixtures and equipment will be cost. Donated fixed assets will be recorded at fair market value at the date of gift.
Only assets costing $500 or more will be capitalized·.
Depreciation
Capitalized fixed assets will be depreciated on a straight
line method over their estimated useful lives. For the International Office, depreciation will be over a SO-year estimated useful
life, and ·for furniture, fixtures or equipment, depreciation will be over the estimated useful life, generally 3 to 15 years.
Funded Depreciation
The.annual depreciation expense for fixed assets will be considered as an operating expense and will be paid in cash annually
from the unrestricted fund to the building reserve fund.
Other Assets
Accrued Receivables
Interest on investments and income on other assets shall be accrued during the period such interest or income is earned, although it will be collected at a future date.
819.2
819.3
819.~-
819.5
819.6
820 821.
821.1
821.2
821. 3
Exhibit A - page 6
Prepaid and Deferred Expenses
Prepaid and deferred expenses such as insurance premiums, taxes, etc. which are
$i,ooo
or more, may be capitalized and expensed over the period the expenses are incurred.Deposits
Utility, postal services and similar deposits of $250 or more shall be capitalized as an asset.
Advances
a. All monies paid for future travel or other expenses to or on behalf of Staff or others shall be recorded as an advance. Within 30 days after completion of travel, the individual shall either repay the advance or report the amount. on an approved expense report ..
b. Any request for a cash advance· must list the reasons for the advance and be approved by the employee's supervisor.
Such advances may include transportation costs and an allowance for hotels, meals and incidentals not to exceed the period of travel.
Deferred Compensation
Cash or inve.stments made for future payments due retired employees will be treated as deferred compensation.
Retiree Death Benefit
A self-insured insurance plan was set up for the benefit o~
the beneficiaries of certain former employees. The amount
of the fund and the deposits required annually must be reasonab.le in relation to the liability Kiwanis has assumed.
Liabilities Accounts Payable Amount
Accounts payable shall be recorded on an accrual basis.
Purchasing System
Using purchase orders, the International Secretary shall maintain a purchasing system which provides prope! cost, quantity,
quality and inte·rnal controls.
Receiving of Goods
The International Secr~tary shall maintain receiving procedures and reports to assure the quantity and quality of goods received
L . . . . - .J..1-.- - · .. --1-.,..~,..., "'"'..,..,4',o.,..-c:_ ..
Exhibit A - page 7
821.4 Payment and Invoices
822.
a. The Internation?l Secretary shall maintain a system to ensure that invoices are paid only for goods or services received, and, that such invoices conform- to the purchase orde.rs and receiving procedures and reports. for such goods or services as to cost, quantity and quality.
b. Payment o·f invoices shall. be by voucher checks, prepared only on the basis of adequate and approved documentation, i.e .. , purchase· order, receiving report and invoice. The check amount, payee and account charged must agree with the support documentation.
c. All properly approved invoices should be paid within fifteen days following receipt of goods and the approved documentation specificed in this Section 821, unless the invoice specifies another period of time when due.
Notes Payable
The amount of funds borrowed including capital lease obligations shall be recorded as notes payable. The Board must approve all borrowings befora such debt is incurred.
823. Accruals
I 824.
828.
828.1
Taxes, interest and other expenses incurred .monthly but payable over different periods of time will be recorded as expenses and. liabilities in the proper period.
Inter-fund Accounts
In fund accounting, each fund is a separate accounting entity with a self-balancing set of accounts for recording assets,
liabilities, fund balance, revenues and expenses. Amounts
due from or to other funds is a balancing account, and interest at average-_ rate· currently being- received .on investments will be charged or credited.
Deferred Income General
If income is received but is to be earned in a future period, such as dues, subscriptions, insurance premiums, life memberships, etc., the unearned amounts shall be credited to a deferred
income account and then taken into income as earned.
828.2
828.3
Exhibit A - page 8
Life Memberships
Income received for life memberships will be credited t9 deferred life memberships and amortized into_ income on a straight-line basis over a period of ten years. Cas~ received for deferred
life memberships will be included as operating funds and is not to be invested separately.
Convention, Registrations and Other Income
When income is received for Convention, registrations and other income, it will be credited to the deferred Convention income account and taken into income as Convention expenses are incurred. Cash received for such Convention income. will become part of the International Convention fund and any excess amounts should. be invested.
EXHIBIT #16
REPORT OF THE JOINT COMMITTEE MEETING OF THE SPECIAL COMMITTEE ON FINANCIAL PROCEDURES AND THE COMMITTEE ON YOUTH SERVICES
TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES APRIL 25, 1986
Date of Committee Meeting: April 25, 1986
Place of Committee Meeting: International Office
Present: Members - Anton J. Kaiser, Noris A. Lusche, and Gene R. Overholt Chairman - Frank J. DiNoto
Members - Morton 0. Alper, C. A. Dillon, John D. Morton, and Robert A. Wagner
Chairman - Raymond B. Allen
Trustees - Kurt K. Huber, M.D. and Robert G. Sinn
Staff - Speegle Berry, Donald Collins, Robert Scroggin, William Parker, Kathy Cadwell, James P. Tinsley, and Carolyn J. Seymour
Guest - Ken Masick, Wolf and Company
The Special Committee on Financial Procedures and the Committee on Sponsored Youth reviewed proposed procedures covering the finances of the sponsored youth organizations. These procedures are being presented to the Board for adoption.
Recommendation #1:
The Committees recommend the adoption of the procedures as presented in Exhibit A and that they be referred to the Board Committee on Administration - Constitution and Bylaws for insertion in Board Procedures.
I move that Recommendation #1 be adopted.
Respectfully submitted, Anton J. Kaiser
Noris A. Lusche Gene R. Overholt
Frank J. DiNoto, Chairman
Morton O. Alper C. A. Dillon John D. Morton Robert A. Wagner
Raymond B. Allen, Chairman
Exhibit A - page 1
880. SPONSORED YOUTH 881. Accounting System
881.1 Accrual Basi~
The sponsored youth organizations shall maintain separate books and records on an accrual basis in accordance with generally accepted accounting principles.
881.2 Accounting Pr~cedures
Unless exceptions are specified in Kiwanis International Board Procedures, youth organizations shall follow the accounting pro- cedures a_pplicable to Kiwanis International, and for accounting purposes, each organization shall be treated as a separate Kiwanis department.
881.3 Annual Audit
The annual auditor for t·he sponsored youth organizations shall be appointed by the Kiwanis International Board of Trustees.
882. Budget
882.1 Preparation of Budgets
Subject to the advice of the Sponsored Youth Administrator and the Kiwanis Board Counselor, the annual and convention budgets for the next administrative year shall be prepared by the sponsored youth organization's cotmnittee on finance. The appropriate International Office de~artments and Kiwanis Board cotmnittees also m~y be consulted.
882.2 Approval of Budgets
The annual and convention budgets must be.approved by the Bo~rd of Officers (Circle K) or Board of Trustees (Key Club) and have the
endorsement of the respective Administrator and Kiwanis Board Counselor.
The budgets are subject to review by the Kiwanis Board Cotmnittees on Finance and Sponsored Youth and to become effective, must be approved by the Kiwanis International Board.
882.3 Budget Changes
Any budget change shall be subject to the ~ame procedures as budget preparation and approval in Sections 882.l and 882.2.
882.4 Zero-based Budget
The annual budget shall be prepared using the "zero-based" method of budgeting.
4/25/86
Exhibit A - page 2
882.5 Balanced Budget ,
Generally; the budget as approved by the sponsored youth board should be balanced or have a surplus.
882.6 Expenses in Excess of Revenues
If specific reasons exist, up to 25% of the current fund balances of a sponsored youth organization may be budgeted as an expense for the next administrative year. A report explaining such reasons and why ·a ba.lanced budget is not possible must also be approved by the board of the sponsored youth organization, and such report must be submitted to Kiwanis International Board with the proposed budget.
883. Revenues
883.1 Receipt of Funds
The Administrator shall receive all funds payable to the spqnsored youth organization and transmit such funds for deposit to the Treasurer of Kiwanis International or his designee.
883.2 Dep6sitories
The Kiwanis International Board shall designate the depositories for the funds of the sponsored youth organizations.
884. Disbursements
4/25/86
Disbursements of sponsored youth funds shall be made by the treasurer of Kiwanis !nternational or his designee, in accordance with the approved budget and sponsored youth procedure (including Circle K, Section 601, and Key Club, Section 701) and subject to the approval of the Administrator or the Kiwanis Board Counselor.
Exhibit A - page 3
885. Finances 885.1 Subsidies
Kiwanis International shall subsidize the following costs for sponsored youth organizations, which shall be included as income and expense on the sponsored youth organization's financial statements:
a. The salaries of the employees of the sponsored youth organization departments and their related personnel employee benefit costs.
b. International Office building occupancy expenses, including furniture and equipment (sponsored youth departments).
c. Accounting costs to maintain financial records, excluding the audit costs.
d. Any amounts approved under Section 885.3.
885.2 Grants - Kiwanis International Foundation '
Any request for a grant to a sponsored youth organization from the Kiwanis International Foundation or any other organization must not exceed the amount specified in the approved sponsored youth organiza- tion's budget. Any request also mus~ be approved by the Kiwanis International Board. Payment of a grant made to a sponsored youth organization must not exceed the actual cost incurred·.
885.3 Other Costs
All other costs incurred by or on behalf of the operation of a sponsored youth organization shall be its responsibility, unless
such costs are assumed by specific action of the Kiwanis International Board.
885.4 Financial Statements
The financial statements of a sponsored youth organization shall reflect the costs applicable to the operation of such organization, and include subsidies and grants as income and the applicable costs as expense.
886. Fund· Balances (Reserves) 886.1 Purposes
4/25/86
The sponsored youth organizations shall be permitted to maintain fund balances (reserves) for the purpose of sustaining operations in future years. Surplus cash shall be invested at the direction of the Kiwanis International Board.
886.2
Exhibit A - page 4
Permitted Fund Balances
The maximum fund balances permitted for a sponsored youth organization shall be 50% of the annual dues of its members or $50,000, whichever is greater. Any additional fund balances shall be used to reduce the sponsored youth organization's dues and/or convention registration fees.
EXHIBIT #17 REPORT OF THE BOAPJ) COMMITTEE ON FINANCE
TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES
- -- - - - - - - - ---,- - - -
April 25-29, 1986
Dates of Committee Meetings: April 23, 24 & 26, 19'86 Place of Connnittee Meeting: International Office
Present: Members - Frank J. DiNoto, Kurt K. Huber, M.D., Anton J. Kaiser, Noris Lusche, Robert G. Sinn
Chairman - Gene R. Overholt
Staff - Donald Collins, Kathy Cadwell, Robert Scroggin
1986-87 BUDGET REVIEW
A subcommittee of the Board Committee on Finance met at the Kiwanis Inter- national Office in Indianapolis on April 1-2, 1986, to review the 1985/86 budget. This was done to provide a projected annual budget for 1985/86 which could be used in the preliminary analyzation of the 1986/87 budget. It was also decided at that time to provide a two-year projection budget for reference and analyzation .purposes. A special meeting of the Committee was held on April 23-24, i986, to prepare, with staff, the 1986/87 budget~ This budget will be presented to the Board at the June meeting in Houston.
LIABILITY INSURANCE
The method for determining the per member cost of liability insurance was discussed. Edwc1.rd Hecht of Donchin-Hecht, our insurance broker, will provide more information concerning next year's liability insurance premium by the June board meeting. Without knowing how much or even whether coverage will be
available, it is impossible to determine the per member cost at this time. This matter has been deferred to the June board meeting. Following is a cost break- down for 1985/86:
Members Covered:
Liability Insurance Estimated Claims 85/86 Handling Fee (15%)
Total self-funded Fixed Cost of Insurance Total Estimated Cost Member Medical Insurance KI Administrative Costs TOTAL
275,150 Cost
$126,000 18,900
$144,900 432,250
$577,150
========
$ 82,000 35,000
$694,150
Per Member
$ 2.10
$ .30
$ .12
$ 2.52
=======
-2-
A reserve for losses and claims handling fees has not been fully budgeted for 1985)86. Since claims can be expected, an accrued liablity should be budgeted.
The amount needed to meet the anticipated costs is $129,150.
Recommendation Ill
The Comtni ttee recornrriends that $129,150 be trans £erred from the insurance reserve fund balance to an accrued liability for insurance claims and handling costs.
I move that Recommendation Ill be adopted.
AUDITORS
The Committee discussed the appointment of auditors for the 1985/86 audit and recommends that Wolf & Co. be retained.
Recommendation #2
The Committee recommends the appointment of Wolf
&
Co. as auditors for the 1985/86 audit.I move Recommendation 112 be adopted.
LEGAL FEES
The Committee discussed legal fees and noted that they have exceeded the annual budget as of March 31, 1986 by $73,500.
Recommendation #3
The Committee recommends that $50,000 be transferred from the budgetary contingency (23-142-01) to account number (02-126-02) - Legal Fees.
I move Recommendation #3 be adopted.
MANAGEMENT LETTER
The Connnittee discussed a progress report concerning the Management Letter from Wolf & Co. It was noted that all items in the management letter are being worked on and satisfactory progress is being made to correct such items.
-3-
CAPITAL REQUEST
The Committee discussed a request for capital expenditures of $1900 from the MIS department for sheet feeders for the office automation equipment. The Commit- tee believes that the purchase of the equipment will be beneficial to the user departments.
Recommendation #4
The Connnittee recommends approval of the request for $1900.00 for sheet feeders for office automation equipment printers.
I move Recommendation #4 be adopted.
Respectfully, Frank J. DiNoto Kurt K. Huber, M.D.
Anton J. Kaiser Noris Lusche Robert G. Sinn
Gene R. Overholt, Chairman
EXHIBIT 4/:18 REPORT OF BOARD COMMITTEE ON YOUTH SERVICES
TO THE MEETING OF THE INTERNATIONAL BOARD OF TRUSTEES April 25-29, 1986
Date of Committee M·eeting: April 27, 1986
Place of Committee Meeting: International Office Present: Members Morton 0. Alper, D.D.S.
C. A. Dillon, Jr.
John D. Morton, Sr.
Robert A. Wagner Raymond B. Allen Chairman -
Staff Speegle Berry, George F · Lango th ou ,
c
aro yn 1 J . Seymour, James P. Tinsley, Jr.Absent: Member W. Donald Goodfellow, Q.C.
KEY CLUB
Approval of Kiwanis International FoLr~dation Grant Requests
The Committee reviewed the proposed grant requests that Key Club International desires to make to the Kiwanis International Foundation. These grants are tradi- tional items of support from the Kiwanis International Foundation and the Committee considers these requests to be appropriate.
Recommendation #1
The Committee recommends approval be granted for Key Club International to apply to the Kiwanis International Foundation for the following grants:
A. Valley Forge Leadership Seminar:
B. Regional Training Conferences:
C. Sponsorship Awards program:
I move that Recommendation 1 be adopted.
$15,600 12,600 2,100
$30,300
Approval of Proposed Changes to Key Club International Board Policies The Committee reviewed the proposed changes to the Key Club International Board Policies which were passed by the Key Club International Board at its February Board Meeting (See Exhibit A). The Committee considers the proposed changes to be acceptable, arid therefore makes the following recommendation:
Recommendation #2
The Committee recommends approval of the proposed changes to the Key Club International Board Policies, as shown in Exhibit A.
I move that Recommendation 2 be adopted.