Financial Planning Association New Jersey Chapter Financial Philosophy
Introduction and Background
Since inception in 2000, the FPANJ has experienced strong revenues and positive cash flows. Moreover, FPANJ Board’s policy is that most programs should be planned to be cash flow neutral, except for speaker costs and administrative overhead costs. Additionally, during the last eight years, the FPANJ board has adopted many policies relating to financial matters.
This document is intended to serve as a guide for future boards of the FPANJ to understand the financial policies and procedures which have been adopted in the past. Moreover, this document will serve as the basis for the FPANJ Board of Trustees to resolve issues when facing competing uses of resources and on how to manage and oversee the fiscal affairs of the FPANJ.
Vision Statement
Financial resources and budgeting exist to further the vision of the FPANJ and provide value to its members. They ensure the future viability of the FPANJ and will enable it to remain relevant and viable. The FPANJ Board will utilize a conservative budgeting strategy to maintain a position of financial strength today and for the future. . Financial strength will enable the FPANJ to continue to deliver member value during financially challenging times.
Accounting Method
The presentation of the financial statements of the FPANJ shall be done on the accrual basis of accounting. This policy was adopted by the Board of FPANJ when it was formed in 2000.
Contributions, meeting fees, grants and sponsorship income are recorded as revenue in the fiscal year for which they are designated. When such income or expense are received in a fiscal year other than the year in which it is intended to be applied, it will recorded as defered revenue or prepaid expense and reflected in the respective period when earned or incurred.
At times, during its fiscal year,it is acceptable for the FPANJ to maintain cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) limits. The FPANJ considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents.
Investments are recorded at market value. Unrealized gains and losses are included in the Statement of Activities and Change in Net Assets which are part of its annual financial statements presented to the Board.
Financial statements are prepared and posted monthly and presented to the Board on a quarterly basis by the Treasurer. The annual year end financial statement is presented by the Treasurer to the Board of Trustees for their approval.
FPANJ is exempt from federal income taxes under Section 501c (6) of the Internal Revenue Code. Accordingly no provision for income taxes is made in the financial statements. FPANJ is not a private foundation.
Transparency
Annual financial statements and Form 990 will be placed on the FPANJ website members’ section and made available for review by all members. Quarterly financial statements and budget reports as approved by the Board of Trustees will be available upon request from a member.
Yearly Budget
The Board of the FPANJ should seek to adopt an annual budget that has a positive cash flow or is “neutral” (revenue is equal to expenses). In all budgets, revenue projections should be conservative, while expense projections should take into account all possible expenses. In years where expenses (for whatever reason) exceed revenues, the Board of the FPANJ can pass a budget that is not cash flow positive with the understanding that the difference may be made up out of the chapter’s reserve funds. However, every attempt should be made to meet the majority of projected expenses, and the Board must be cautious in using reserve funds so as not to completely deplete the chapter’s emergency funds.
Excess Operating Funds and Use of Excess Funds
Excess Operating Funds are defined as the difference between actual annual revenues vs the actual annual operating expenses for any given year. Of these excess operating funds, a reserve shall be established with a minimum of one year of fixed operating budget costs and be segregated into a separate account and be administered per the “Investment of Reserves for Operating Funds”.
When the FPANJ has Excess Operating Funds, above the reserve amount, these Excess Operating Funds can be used to provide additional benefits to the members, such as, reducing the members’ cost of a specific program, donating to charity, hire speakers for programs, attempt a new program or have a program at a new venue, or do anything else that will improve the member experience and member value. Any expenditure of the Excess Operating Funds must be proposed on a regularly scheduled Board agenda and approved by a majority of the Board of the FPANJ.
Investment of Reserves for Operating Funds
The investment of the Excess Operating Funds may be in liquid, fixed income, investments. Limited risk should be taken. A certificate of deposit or other investment should not have a maturity in excess of one (1) year.
Conflict of Interest Policy
The directors, officers, committee chairs, and members of committees with board delegated powers of the FPANJ (“FPANJ Leaders”) must act at all times in the best interests of FPANJ and not for personal or third-party gain or financial enrichment. The Conflict of Interest Policy adopted by the Board (copy attached), which must be agreed to in writing by all FPANJ Leaders, is intended to supplement but not replace any applicable state and federal laws governing conflicts of interest applicable to nonprofit organizations.
General Policy on Reimbursable Expenses
This policy was previously approved by the Board of the FPANJ. All Board and Committee Members are volunteers and should not bill the Chapter for their time or the time of any of their staff (if spent on FPANJ matters). Certain specific out-of-pocket expenses will be reimbursed as per the approved policy. Any exceptions to this policy must be approved in advance by the President and/or the Chairperson.
Reimbursements
There shall be no reimbursement for supplies or copies or other expenses, except in extraordinary situations when approved in advance by the President and/or Chairperson.
Postage and Overnight Mail
All reasonable postage and overnight mail expenses will be reimbursed.
Long Distance Telephone Charges
Long distance telephone charges directly related to FPANJ business will be reimbursed when submitted and approved by the President and/or Chairperson. However, Board and Committee Members are urged to use cell phones to conduct FPANJ matters to eliminate long distance telephone charges. There will be no reimbursement for any cell phone related charges.
Automobile and Travel Expenses
Those Board members selected by the President or the Board to represent the Chapter at FPA leadership functions or Alliance Forum events will be reimbursed for their travel expenses, including airfare, one checked bag, airport parking charges, tolls, and transportation (taxicab and reasonable automobile rental), meals, food and hotel expenses, except that there shall be no reimbursement for personal automobile expenses for travel to an airport. All air travel will be coach class or similar fare classification. There will be no reimbursement for travel expenses to local FPANJ events, committee or Board meetings, the Retreat or the Symposium.
When traveling overnight, the cost for meals and food will be reimbursed on a per diem basis and shall be reasonable based on the costs of meals and food at the meeting location. Since different facilities throughout the country have far different costs for meals and food a fixed amount for meals and food will not be set. However if an expense for meals and food is considered excessive by the Chapter Executive based on the facility attended, then the Chapter Executive should address this with the Chapter Treasurer and Board Executive Committee. If excessive expense is for one of the Board Executive Committee members then that Committee member should recuse themselves in the evaluation of the excessive expense. Meals and food reimbursements for Chapter Executive should also be reviewed by the President, Chairperson and the Chapter Treasurer for reasonableness of the expense.
Other Meals and Food
Committees of the Board, including, but not limited to, the Symposiums, Golf, and Gala, all have separate budgets. All meal and food directly related for a Board or committee meeting to discuss/plan events and/or strategic efforts can be paid from the budget of the Committee (and/or the general budget, if a Board meeting), if such meal and food expense is reasonable and necessary to promote the business of the Committee.
Adopted by the FPANJ Board of Directors on December 8, 2015.