Unit Financial Liabilities to a Member?

[RADIOMAN015]

Here's a question:

You get authorized to buy something for your unit, that exceeds what is in your unit's bank account balance.   Can the unit set up the invoice to do a partial payment, and carry the rest as an accounts payable, and than pay off the member a bit every month as unit funds become available

RM

[lordmonar]

No.

Your unit cannot speak for the corporation in that sense.

The unit financial committee cannot commit more funds then it has in the wing banker.

They should go to wing and see if any wing funds can be used to make the purchase.

[Ed Bos]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

[Eclipse]

No.

[EMT-83]

If you can't afford it, you don't need it.

[PHall]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

[cap235629]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Seriously?

Hey I am going to get some pizza, everyone chip in.

NO, we have to request the funds through Wing Banker!

You are reading way to much into the Wing Banker Program.

How about this.

We need to purchase a new TV for the cadets to watch training videos on.  The TV costs $300.  The squadron passes the hat and the Finance Committee chair deposits the money in the bank and requests a check to purchase the TV.  All deposits and checks are tracked through Wing Banker.

Where is the problem exactly???

[lordmonar]

Well....properly in all cases.....you would donate the money to CAP and get a receipt for any personal funds you give to CAP.

Sure you can go out and buy anything and then get Wing Banker to pay for it afterwards.

In this case you can't because CAP will be paying for half and you would be paying the other half....and expecting CAP to pay you back from unit funds that don't exist.  That is the part that you can't do.


Now you can always donate your half to CAP.....get a receipt. 

[MSG Mac]

These are just some of the minor problems with the WB program.

[Eclipse]

^ That's unacceptblae and not typical.  My wing processes WBP checks within a week, holidays or other personnel issues notwithstanding.

In a lot of cases the delay is because of Units that take forever to process paperwork, or wait until meetings for wet signatures.

[Ed Bos]

There is nothing in the Wing Banker program that prohibits an individual from donating either money or equipment to CAP. There is also nothing that prohibits several people joining together to donate funds or equipment to CAP.

Ergo, if the members of a squadron decide their unit needs a new projector, they can purchase one and then donate it to CAP.

That has less to do with Wing Banker, or the 173-1, more to do with donations and the 173-4.

[Patterson]

One simple way around Wing Banker (as in not using it at all) is to have a wife or husband or patent chair a "friends of Squadron xx" booster club.

Let every single financial matter go through that group. It is like the system before WB, and is legal as long as the Members themselves don't serve on the booster club. 

We create a zero balance budget at the Squadron, and complete all the required paperwork as per Finance Regulations, but not a single penny is ever deposited into the "units" wing banker account.

For CYA purposes, make sure a simple one page incorporation statement is created by your booster club and the people listed as running it are not CAP!!

Your Squadron needs a new television, send a written letter to your booster club asking for a television (make sure everything you do is in writing as verbal conversations can be contested by Wing Commanders if they do not like you!!). Then your booster club buys a television, gives it to the Squadron with a letter stating "no receipt required, donation will not be used for tax purposes".

To be honest Wing Banker does not benefit the average Member or Squadron, just the opposite!  It is impracticle to expect a member to front the responsibility to pay for materials and equipment then wait for reimbursement.  It does not matter if reimbursement takes five days or five weeks.  The only advantage of Wing Banker is to the Corporation so that they may recieve better accounting/fiscal responsibility ratings and get better rates on investments and operating lines of credit if needed. 

Also, if running a "coffee fund", always place a sign on the donation can that says "please donate to the Friends of Squadron xx Booster Club". Then you can legally charge for coffee!

[Ned]

The only advantage of Wing Banker is to the Corporation so that they may recieve better accounting/fiscal responsibility ratings and get better rates on investments and operating lines of credit if needed. 

Really?  Is that the only advantage?

Well, since failure to be able to adequately account for the taxpayer funds provided by Congress to the CAP would mean the end of the funding and CAP itself, I suppose I will just have to struggle through the requirments to account for corporate funds.  (Which, BTW, are pretty much the same requirements used by every other non-profit that receives significant federal funding.)

Personally, I think of as (roughly) 20,000,000 good reasons to have Wing Banker.

BTW, the land of Booster Clubs is not all that rosy.  Donations made to such clubs are normally not tax-deductable and filing that "one page incorporation statement" you describe creates a whole host of problems.  Corporations have to file tax returns, have regular meetings with minutes, etc.  Failure to file required tax returns or comply with corporate laws ususally results in personal liability for corporate officers and directors for significant fines even if the corporation would not have owed any taxes in the first place.  And of course, the IRS has been know to get fairly nasty with corporations, directors, and officers for unpaid taxes and/or false claims of "deductability", etc.

Your Squadron needs a new television, send a written letter to your booster club asking for a television (make sure everything you do is in writing as verbal conversations can be contested by Wing Commanders if they do not like you!!). Then your booster club buys a television, gives it to the Squadron with a letter stating "no receipt required, donation will not be used for tax purposes".

Umm, not quite.  As generous and kind as that donation of a television would be, no donation of property over $250 can become CAP property until and unless it is accepted by the Wing Commander (as a CAP corporate officer), an official receipt is issued, and gets put on the unit's official inventory so it can be safeguarded and accounted for like all other corporate property.  See CAPR 173-4 for additional guidance.

[Eclipse]

The mental hoops people will go through just to avoid imaginary problems never ceases to amaze me.

[a2capt]

Wing Banker isn't anything different than a bank, except that it makes the Corporation happy. It's still deposited in a bank, it's still the unit's funds. If someone has absolute solid proof, with all the documents to support it from both sides, that Group, Wing, Region or National invaded someones account and just took the money, without any supporting reason then cough it up. Otherwise it's all he-said-she-said imagination.

[Spaceman3750]

My unit recently ordered squadron T-shirts. We had the company give us an estimate and put in a check request written to that company for the amount quoted. With a minimal amount of foresight we avoided having a member front $500.

[Eclipse]

My unit recently ordered squadron T-shirts. We had the company give us an estimate and put in a check request written to that company for the amount quoted. With a minimal amount of foresight we avoided having a member front $500.

Wait.

Are you suggesting a little planning and maybe, oh... management is a viable solution vs. brute forcing everything at the last minute?

No way.  Much better to do everything in the least resistant way possible and then complain when things don't go as expected.

[NIN]

Wait.

Are you suggesting a little planning and maybe, oh... management is a viable solution vs. brute forcing everything at the last minute?

No way.  Much better to do everything in the least resistant way possible and then complain when things don't go as expected.

Funny how that works.

WBP came in during my last tour as a squadron commander.  Everybody complained mightily, but we never had a problem with it as long as we planned in advance.

And that was the thing: the people who had the biggest issue with WBP seemed to be the ones who planned about to their fingertips.

[Fubar]

If my squadron put it's funds in a bank, we'd earn interest. Do we earn interest with the WBP? Or does the wing earn interest on all the squadron's balances (which might be a decent amount).

[SarDragon]

Typically, the olde squadron accounts were business/organizational accounts, which did/do not earn interest. I'm sure the WBP accounts are similar. As a 501(c)3, interest bearing accounts complicate things in the IRS arena, requiring much more reporting. I went through similar issues as a treasurer in a 501(c)4, and the paperwork got so cumbersome that we switched accounts to bus/org.

[JeffDG]

Typically, the olde squadron accounts were business/organizational accounts, which did/do not earn interest. I'm sure the WBP accounts are similar. As a 501(c)3, interest bearing accounts complicate things in the IRS arena, requiring much more reporting. I went through similar issues as a treasurer in a 501(c)4, and the paperwork got so cumbersome that we switched accounts to bus/org.

Yeah, and a bank account will pay much less than 1% on anything you have in it these days!

[davidsinn]

Typically, the olde squadron accounts were business/organizational accounts, which did/do not earn interest. I'm sure the WBP accounts are similar. As a 501(c)3, interest bearing accounts complicate things in the IRS arena, requiring much more reporting. I went through similar issues as a treasurer in a 501(c)4, and the paperwork got so cumbersome that we switched accounts to bus/org.

Yeah, and a bank account will pay much less than 1% on anything you have in it these days!

My savings account earns .25%. On the plus side mortgages are in the 4% range...

[Eclipse]

Units are still free to have CD's and other long term deposits.

With that said, no unit, absent a long-term capital plan like their own building, should be sitting on enough cash to make the interest conversation more than academic.  I've seen units sitting on 5 figures where the money passed through multiple commanders unspent.

Units with no recurring expenses, etc.

[FW]

If my squadron put it's funds in a bank, we'd earn interest. Do we earn interest with the WBP? Or does the wing earn interest on all the squadron's balances (which might be a decent amount).

Maybe. Usually, the 3 or 4 cents per month most squadrons would earn usually end up being used by the wing to offset mailing expenses. Today, it is a "non starter" for compaints about the WBP. 

A few squadrons have major investments.  These few units are treated like wings and, have their own audit requirements to deal with. Unreinvested income from these investments still go to the WBP.

[Ed Bos]

Typically, the olde squadron accounts were business/organizational accounts, which did/do not earn interest. I'm sure the WBP accounts are similar. As a 501(c)3, interest bearing accounts complicate things in the IRS arena, requiring much more reporting. I went through similar issues as a treasurer in a 501(c)4, and the paperwork got so cumbersome that we switched accounts to bus/org.

This isn't the case for CAP. Having worked with the Wing Financial Analysts, as well as viewed the IRS Form 990 that CAP files, earning interest on an account is a non-issue. We already have all the mechanisms in place to track interest earned.

And for those at home who are confused, non-profit does not equate to non-money-making. There are lots of ways to legitimately fundraise and earn capital that all echelons should be pursuing in order to further our missions.

[jimmydeanno]

Units are still free to have CD's and other long term deposits.

With that said, no unit, absent a long-term capital plan like their own building, should be sitting on enough cash to make the interest conversation more than academic.  I've seen units sitting on 5 figures where the money passed through multiple commanders unspent.

Units with no recurring expenses, etc.

Why not?  It would be nice to be able to run a unit off the interest that it got off investments.  In fact, it seems like a pretty good goal.  Imagine if CAP, inc. Had thought about building an endowment fund over the last 70 years...we probably wouldn't have to worry about laying off employees, cutting operations when congress doesn't pay us, etc.  It'd almost be like we were a legitimate non-profit...

[Eclipse]

You missed my point - money in the bank, with no plan or intention to ever spend it, is useless.  Note the word ever.

An endowment fund that no one will ever spend, is actually wasteful, and could be argued it's insulting to the donors.

A unit sitting on $10-20K that has no recurring expenses, and no plan, no scholarships, etc. is pointless, and that money should
be divested where it can be used.  But then you'd have people whining about "wing took our money".

In my specific example, one unit eventually lost its charter because of low membership.  It would have been much better off had it spent the
money on recruiting, or equipment, or activities, or whatever.  But instead it sat in the bank for years because the unit CCs liked to
see a round number in the account - the same misguided way they think empty shirts enhance their rosters.

This is kind of the inverse of the commanders who are actually proud of not having any issued equipment because "then we don't have
to worry about the annual inventory..."

[Lmarty]

One simple way around Wing Banker (as in not using it at all) is to have a wife or husband or patent chair a "friends of Squadron xx" booster club.

Let every single financial matter go through that group. It is like the system before WB, and is legal as long as the Members themselves don't serve on the booster club. 

We create a zero balance budget at the Squadron, and complete all the required paperwork as per Finance Regulations, but not a single penny is ever deposited into the "units" wing banker account.

For CYA purposes, make sure a simple one page incorporation statement is created by your booster club and the people listed as running it are not CAP!!

Your Squadron needs a new television, send a written letter to your booster club asking for a television (make sure everything you do is in writing as verbal conversations can be contested by Wing Commanders if they do not like you!!). Then your booster club buys a television, gives it to the Squadron with a letter stating "no receipt required, donation will not be used for tax purposes".

To be honest Wing Banker does not benefit the average Member or Squadron, just the opposite!  It is impracticle to expect a member to front the responsibility to pay for materials and equipment then wait for reimbursement.  It does not matter if reimbursement takes five days or five weeks.  The only advantage of Wing Banker is to the Corporation so that they may recieve better accounting/fiscal responsibility ratings and get better rates on investments and operating lines of credit if needed. 

Also, if running a "coffee fund", always place a sign on the donation can that says "please donate to the Friends of Squadron xx Booster Club". Then you can legally charge for coffee!

After having a previous Wing Chief of Staff tell our Squadron, that he could not approve request for reimbursement till after making sure Wing Commander did not need funds, I helped start up a booster club.  The hardest part was getting Non-profit status from IRS.  After moving to a Leadership position in Squadron, resigned from booster club, and now booster club feels their only expense is the annual awards banquet and all fundraising is for that purpose.

[Eclipse]

After having a previous Wing Chief of Staff tell our Squadron, that he could not approve request for reimbursement till after making sure Wing Commander did not need funds, I helped start up a booster club.  The hardest part was getting Non-profit status from IRS.  After moving to a Leadership position in Squadron, resigned from booster club, and now booster club feels their only expense is the annual awards banquet and all fundraising is for that purpose.

Assuming these were unit funds, the Wing CS doesn't have the power or authority to make that call.  An IG should have been able to end that conversation quickly.

[ZigZag911]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Why not?  Since when can't a unit accept contributions, as long as these are processed according to regs?

[lordmonar]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Why not?  Since when can't a unit accept contributions, as long as these are processed according to regs?

In theory all monies collect would have to be deposited first into the squadron account...then a request for purchase/funds made through the squadron financial committee.

[RADIOMAN015]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Why not?  Since when can't a unit accept contributions, as long as these are processed according to regs?

In theory all monies collect would have to be deposited first into the squadron account...then a request for purchase/funds made through the squadron financial committee.

Well that's not correct either.  IF the members are contributing monies for a specific purchase of equipment, activity etc, than those funds need to be identified as contribution restricted for that specific piece of equipment/activity.  It is possible that it may take awhile to accumulate enough monies to make the purchase.   I would guess that the finance committee would have to make a note in the minutes about this and a separate account ID would have to be set up including notifying of the wing banker administrator.

RM
 

[Spaceman3750]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Why not?  Since when can't a unit accept contributions, as long as these are processed according to regs?

In theory all monies collect would have to be deposited first into the squadron account...then a request for purchase/funds made through the squadron financial committee.

Well that's not correct either.  IF the members are contributing monies for a specific purchase of equipment, activity etc, than those funds need to be identified as contribution restricted for that specific piece of equipment/activity.  It is possible that it may take awhile to accumulate enough monies to make the purchase.   I would guess that the finance committee would have to make a note in the minutes about this and a separate account ID would have to be set up including notifying of the wing banker administrator.

RM

As Ned pointed out in another thread, restricted donation terms must be agreed to by both parties, and only a corporate officer may do that.

Since only the squadron can spend squadron money, I'm missing the point of why you would go through that trouble.

[RADIOMAN015]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Why not?  Since when can't a unit accept contributions, as long as these are processed according to regs?

In theory all monies collect would have to be deposited first into the squadron account...then a request for purchase/funds made through the squadron financial committee.

Well that's not correct either.  IF the members are contributing monies for a specific purchase of equipment, activity etc, than those funds need to be identified as contribution restricted for that specific piece of equipment/activity.  It is possible that it may take awhile to accumulate enough monies to make the purchase.   I would guess that the finance committee would have to make a note in the minutes about this and a separate account ID would have to be set up including notifying of the wing banker administrator.

RM

As Ned pointed out in another thread, restricted donation terms must be agreed to by both parties, and only a corporate officer may do that.

Since only the squadron can spend squadron money, I'm missing the point of why you would go through that trouble.

I don't think it would be difficult for a squadron to get appropriate approval to do some fund raising for a specific project.    Also I see no reason why the squadron financial committee can't designate funds for a specific project purchase, and the correct way is for these funds to be set aside in the account system as designated (if CAP Inc doesn't want to allow this at the unit level than we do have some real problems that need to be addressed).   The squadron may have funds available to fund part of a special project but may have to get contributions/donations for the other part.   

It stands to reason that if you collect money for a specific purchase that the money should be 'fenced' in the accounting system as received to ensure proper utilization.  It may take months to accumulate enough funds to make that specific purchase.
RM

   

[Eclipse]

Great idea.

Then when something important comes up, or there's a new commander with a different plan, the restricted funds can collect dust.

[RADIOMAN015]

Great idea.

Then when something important comes up, or there's a new commander with a different plan, the restricted funds can collect dust.

I think higher headquarters would be setting a time limit/period on this designation for a specific asset purchase or operations activity.   NO Commander has ANY say on a restricted contribution made for a specific purpose that was agreed to prior.   IF that purpose can't be met, than the right thing to do (perhaps even a legal requirement) is refund the money to the contributors OR ask for permission to use it elsewhere.   Personally, for unit recurring Operations/Maintenance costs, maybe a donation in kind (e.g. paper products) is appropriate, I'm not sure we need to be seeking monetary donations for this.  The squadron members should be responsible for funding this and know what it is costing to operate the unit (even if members are donating "in kind" off the books). 

Of course many non profits (including CAP Inc), want just non designated contributions/donations, since it gives them the maximum flexibility.  Personally, I think IF you can restrict your contribution/donation you should do that to ensure it meets the reason why you contributed.  I would think most large donors would be contributing for a specific purpose.     It's interesting to see that there's a separate GL account for squadron dues, which is unrestricted and can be utilized for anything.  I still like the idea of squadrons' having the right to restrict/designate funds, even if they were collected via the members dues process.
RM   
         

[ol'fido]

1.If a unit finance committee approves a purchase of an item that they have sufficient funds for(at the time of the approval) and then when the time comes for the actual purchase, they find that the price has gone up or there were unforseen associated expenses there are to me three approaches. a) If the amount is minimal such as <$100, senior member may choose to go ahead and pay the additional amount out of pocket and either eat the cost himself or deduct it from his taxes as a donation. b)The unit can delay the purchase until further funds are available and the additional expense is approved. c) See if the vendor would be willing to take the original amount and deduct the donation from his taxes.

I know I have spent quite a lot of money over the years on items that could legitimately be deducted from taxes as donations or reimbursed by the unit as neccessary expenses, but I just spent the money and went on. I can't afford to do that when the price starts getting up there though.

2. I don't think that WBP was designed to prevent a unit from passing the hat to go but a couple of pizzas or ice cream for the cadets after a meeting. We don't keep petty cash funds at the units, but a one time collection of funds to buy fast food with everbody splitting the change if any is not what gets units or individuals in trouble.

3. Designated contributions should be handled in such a way as the funds should not be transfered to the unit until all the paper work is done, approvals are in hand, and the spirit of the contribution has been met to the contributor's satisfaction.

[Eclipse]

Great idea.

Then when something important comes up, or there's a new commander with a different plan, the restricted funds can collect dust.

I think higher headquarters would be setting a time limit/period on this designation for a specific asset purchase or operations activity.   NO Commander has ANY say on a restricted contribution made for a specific purpose that was agreed to prior.   IF that purpose can't be met, than the right thing to do (perhaps even a legal requirement) is refund the money to the contributors OR ask for permission to use it elsewhere.   Personally, for unit recurring Operations/Maintenance costs, maybe a donation in kind (e.g. paper products) is appropriate, I'm not sure we need to be seeking monetary donations for this.  The squadron members should be responsible for funding this and know what it is costing to operate the unit (even if members are donating "in kind" off the books). 

No the right thing to do is not assume the entirety of the universe is conspiring to steal your unit's funds, deposit the money and then use it
as needed.  Restricting funds are an unnecessary burden on the finance committee.

Refunding a donation is the worst idea since selling bread without the option for individual pieces.

Any members who incur expenses worth whining about without prior approval by the finance committee deserve to not get reimbursed if it turns out
there are no funds for the purpose.  Those who do get prior approval are not having issues getting reimbursed at any rate above the normal
inertia of squadron FMs.

A commander spending money (or not spending it), in a way yo don't agree with does not equal malfeasance or FWA.

This is another phantom problem.

[RADIOMAN015]

Great idea.

Then when something important comes up, or there's a new commander with a different plan, the restricted funds can collect dust.

I think higher headquarters would be setting a time limit/period on this designation for a specific asset purchase or operations activity.   NO Commander has ANY say on a restricted contribution made for a specific purpose that was agreed to prior.   IF that purpose can't be met, than the right thing to do (perhaps even a legal requirement) is refund the money to the contributors OR ask for permission to use it elsewhere.   Personally, for unit recurring Operations/Maintenance costs, maybe a donation in kind (e.g. paper products) is appropriate, I'm not sure we need to be seeking monetary donations for this.  The squadron members should be responsible for funding this and know what it is costing to operate the unit (even if members are donating "in kind" off the books). 

No the right thing to do is not assume the entirety of the universe is conspiring to steal your unit's funds, deposit the money and then use it
as needed.  Restricting funds are an unnecessary burden on the finance committee.

Refunding a donation is the worst idea since selling bread without the option for individual pieces.

Any members who incur expenses worth whining about without prior approval by the finance committee deserve to not get reimbursed if it turns out
there are no funds for the purpose.  Those who do get prior approval are not having issues getting reimbursed at any rate above the normal
inertia of squadron FMs.

A commander spending money (or not spending it), in a way yo don't agree with does not equal malfeasance or FWA.

This is another phantom problem.

Well CAP has a fund raising regulation and a chart of accounts that allows contribution to be placed in a restricted category.  I would think there's a legal reason why this is set up the way it is.

I wouldn't want to be the adult leader who decides to play a bait & switch game with fund raising not used for the specific purpose mentioned for getting donations/members' contributions.  My guess is that with CAP's emphasis on integrity and stewardship of finance resources, they probably wouldn't be members anymore.  Also it might be a violation of state law in the state they are in & may even result in some IRS interest. 

IF a member makes a mistake in their enthusiasm to support their squadron by buying something involving multiple invoices and is willing to accept reimbursement over a period of time & the leadership are in agreement with this as an asset to the squadron, he/she should be reimbursed.   I don't think we should punish good people.

I think it's fantasy to think that one individual in a unit (commander) is going to do what he/she wants with all the squadron funds  There is a finance committee, and the membership can talk to them about their concerns.  I would also think that an adult senior squadron member could attend the meeting as an observer.  So there are some controls.

BTW Leaders have to inspire volunteer, if any of them play games, in the end they loose, since the membership can inflict damage just by becoming passive members and pulling back participation. Bet there's some former commanders right on this website that have experienced that :angel:
RM     

         

[ZigZag911]

Another option is to pass the hat around the squadron & get the money before the purchase is made.

Not an option under Wing Banker.

Why not?  Since when can't a unit accept contributions, as long as these are processed according to regs?

In theory all monies collect would have to be deposited first into the squadron account...then a request for purchase/funds made through the squadron financial committee.

Yes...then they'd have the funds on hand to purchase the desired item.

Or did I misunderstand??