Basic Operating Procedures for 4-H Youth Development Councils
Financial guidelines relevant to the 4-H Youth Development Council include:
- Due to the relatively large size of its financial account, the 4-H Council should contract with a professional financial advisor to conduct a financial audit of the 4-H Council's financial records on an annual basis.
- The professional financial advisor can be hired to also file the relevant federal forms with the IRS and state forms with the appropriate State of Indiana government office on an annual basis:
- Federal IRS Form 990 by May 15 – required of ALL 4-H groups
- Business Entity Report with the Indiana Secretary of State (http://www.in.gov/ai/appfiles/sos-berf/)
- State Sales Tax Exemption Report with the Indiana Department of Revenue (if applicable) (https://www.in.gov/dor/tax-forms/nonprofit-tax-forms/)
- The treasurer should be bonded, since that officer handles money that belongs to the 4-H Youth Development Council. Generally, an inexpensive rider that will bond the treasurer can be added to the liability policy that covers the 4-H Youth Development Council.
- The 4-H Youth Development Council may wish to explore the option of becoming a nonprofit corporation, which helps to reduce individual liability and increases the financial accountability of the council. For information and forms to file for incorporation and nonprofit status, visit https://www.in.gov/sos/business/division-forms/business-forms/.
- When a 4-H Youth Development Council becomes incorporated, articles of incorporation and a permanent mailing address must be recorded with the Secretary of State's office. It is recommended that this address be either the county Extension office or a post office box that can be used year after year.
- Amendments to the Articles of Incorporation are made with the Secretary of State, and submitted along with a filing fee (http://www.in.gov/sos/business/2426.htm).
- Any amendments must align with the five standard provisions required of groups in the Purdue Group Federal Tax Exemption Number.
- The 4-H Youth Development Council should give careful consideration to how it invests its funds. Interest that is earned can be used to help underwrite the annual budget. A reliable local bank representative or a professional financial advisor should be consulted for advice on investing funds. One option is to ask the bank that handles the council's checking account if it will move unneeded funds into a trust account to earn a higher rate of interest. This eliminates the problem of when and where to invest 4-H Youth Development Council funds.