Sigma Kappa Sorority . Vice President of Finance Handbook page 2 Sigma Kappa Sorority . Vice President of Finance Handbook . page 3 Sigma Kappa Sorority . Vice President of Finance Handbook page 4 Sigma Kappa Sorority Vice President of Finance Handbook page 5 Sigma Kappa Sorority Vice President of Finance Handbook page 6 REWORD Sigma Kappa Sorority Vice President of Finance Handbook page 7 FOREWORD "The purpose of Sigma Kappa Sorority is to provide women lifelong opportunities and support for social, intellectual, and spiritual development by bringing women together to positively impact our communities." Article II, Section 1 Sigma Kappa Sorority Bylaws This purpose builds on the values of our organization: friendship, loyalty, service and personal growth, all bound by a promise. National council affirms that Sigma Kappa collectively can only grow through the prosperity of each individual chapter. Such prosperity must begin with sound and lasting leadership. Each chapter officer is provided a handbook designed to give her the information needed to perform the duties of her office and assist the chapter in achieving the Sigma Kappa Standards of Excellence. Serving as a collegiate chapter officer exemplifies Sigma Kappa's purpose and values. C 2018 Sigma Kappa Sorority TABLE OF CONTENTS The Vice President of Finance 4 Resources for the Vice President of Finance 5 People Resources 5 Working with Other Officers 7 File Organization 9 Document Retention 9 Financial Record Keeping 9 Where All the Money Goes 11 Fees paid to the National Organization 11 Fees paid for Property Management and Chapter Operation 12 Chapter Budget 13 Receipts (Income or Revenue) 13 Disbursements 14 Helpful Budgeting Tips 15 Accounting Procedures 16 Delinquent Accounts 17 Tracking Member Payments 19 Individual Member Financial Records 19 Monthly Financial Reports 19 Collecting from Members 20 Automatic Financial Suspension 20 Financial Expulsion 21 Reviewing the Chapter's Financial Health 22 Role in New Member Education 23 Fundraising 24 The 35% Rule 24 Supporting the Sigma Kappa Foundation 25 Sigma Kappa Sorority Vice President of Finance Handbook page 9 Internal Revenue Service 26 Tax Forms All Chapters are required to Prepare Locally 26 State Income Taxes 27 THE VICE PRESIDENT OF FINANCE The vice president of finance (VPF) is elected by the collegiate chapter and is responsible for the collegiate chapter's financial stability. She is a member of the executive council and is responsible to the president of the chapter. She educates members on financial responsibilities and communicates the financial standing to the chapter members. In light of these responsibilities, the VPF must do the following: Ensure Financial Policy Compliance: Read, comprehend and follow the Handbook for the Vice President of Finance. Be knowledgeable about all policies and procedures in the National Policy Handbook and the chapter Code of Conduct. Sign contracts: Only the president and VPF may legally sign contracts for the chapter. Any contracts should be reviewed by the ABS prior to being signed. Complete and submit the Sigma Kappa Foundation Contribution Form after philanthropic events. Meet all deadlines and file all reports on time. Work closely with the financial advisor (FINA). The VPF must not use the chapter's money for any purpose other than chapter business. The VPF should contact the chapter advisory board supervisor (ABS) immediately if asked to present the chapter's budget or financial information to the collegiate Panhellenic council or university for inspection. Manage Chapter Funds: Maintain the Billhighway account for the chapter. Write checks to vendors, make payments using Send Money to national headquarters (NHQ) or the National Housing Corporation (NHC) and manage prepaid card transactions and balances utilizing Billhighway. Set a specific time each week to pay bills, schedule member fee billing and reimbursements in Billhighway, prepare reports and monitor the budget. Sigma Kappa Sorority Vice President of Finance Handbook page 10 Prepare a financial report for each formal chapter meeting. Billhighway has several standard reports available that may be utilized. Collect, deposit and record funds not processed through Billhighway. For example, if the campus requests a college/university account for copies, room reservations, catering orders, etc. Notify chapter finance specialist at NHQ of any such account and the account activity each month. Prepare and Monitor the Annual Budget: Prepare the chapter budget and submit to national headquarters (NHQ), after approved by a chapter vote, no later than the date indicated on the budget template. Review and revise the budget periodically, especially after recruitment. Each time the chapter budget is revised and approved by the chapter, resubmit it to NHQ. Work closely with officers in communicating budgets and accounting procedures. Oversee officer budgets and expenditures. Track Member Balances: Each year, educate the chapter about financial matters, including the schedule of charges, dues payments, penalties for non-payment, and policies for automatic financial suspension (AFS), and financial expulsion. Work with members to set up payment plans as necessary. This refers to payment plans that are created prior to a member being in arrears (30 or more days past due). Once a member is in arrears, the AFS process must start. Participate in Promise for New Members meetings to educate new members on financial responsibilities. Review member outstanding balances regularly to ensure chapter fees and invoices are being paid in a timely manner. Enforce AFS and financial expulsion by following the procedure outlined in the VPF annual supplies (found on the members only side of the Sigma Kappa website). Maintain confidentiality and maturity when handling members' personal financial information. Serve as a contributing member of the executive council: Review and update the financial section of the Code of Conduct with the financial advisor. Maintain and keep all financial files current. Hold regular office hours for answering member questions and meeting with officers to discuss expenses and budget adjustments as necessary. Assist in training the next VPF and financial assistant (if applicable). May serve as a member of the corporation board/facilities committee. Sigma Kappa Sorority Vice President of Finance Handbook page 11 Resources for the Vice President of Finance In addition to this handbook, the VPF must have certain resources and materials to properly do her job. They are as follows: 1. VPF annual supplies for the year 2. National Policy Handbook 3. The chapter's Code of Conduct People Resources Financial Advisor The VPF should work closely with the financial advisor and keep her informed of problem areas. It is important to develop a relationship with the financial advisor since she is an integral part in keeping the chapter fiscally responsible. Discuss any problems and work together to solve difficult issues such as contracts, collections, budgeting, etc. Communicate with the financial advisor weekly via phone, video chat or email. The financial advisor must approve all check requests, Billhighway prepaid card load requests and transfer requests in Billhighway. Please note: the financial advisor will NOT receive an email when a transfer request is made in Billhighway so please notify her that one was created and is waiting her approval. Notify her of the days and times of your office hours. The advisor needs to approve all correspondence going to members. Copy her on all email correspondence. Make sure NHQ has the advisor's name, address, phone number and email address, submitted via Dove Hub. If you do not have an advisor, your chapter's ABS, your district's collegiate finance coordinator and NHQ finance team members are available for assistance. NHQ Finance Team Members The finance team is comprised of a director of finance, chapter finance specialist, accounts receivable assistant and an accounts payable assistant. Contact information is found on the Sigma Kappa website. The finance staff at NHQ is responsible for: Sending monthly financial statements to the chapter VPF, financial advisor and ABS. However, these statements are always available through the reports section on Billhighway. The staff is an excellent resource when questions regarding financial reports arise. Electronically sending Internal Revenue Service (IRS) forms 990, 990EZ, 990T or 990N for collegiate chapters and state tax forms where applicable. These are typically sent to the chapter during the fall term. Ensures collegiate chapters are in compliance with Sigma Kappa national policy and IRS guidelines. Sigma Kappa Sorority Vice President of Finance Handbook page 12 Collegiate Finance Coordinator The collegiate finance coordinator is a national volunteer who provides support to the financial advisor and VPF to ensure that all collegiate chapters are in good financial standing with the national organization. The collegiate finance coordinator is responsible for: Working with NHQ finance team to help bridge communication between collegiate chapters and headquarters staff. Assisting in the training of incoming VPFs and financial advisors. Educating chapters on how to develop and maintain budgets. Providing support and education on outstanding business and AFS practices. Approving AFS and financial expulsion for chapter members. Sigma Kappa Sorority . Vice President of Finance Handbook page 13 WORKING WITH OTHER OFFICERS The VPF works closely with many collegiate chapter officers, her advisor, and other chapter members. The relationship and communication between the respective members is described below Chapter President The president should be kept informed of the chapter's financial status, particularly of members who are in arrears. If it becomes necessary to put a member on AFS, the chapter president should be informed. Vice President of Communication The vice president of communication (VPC) needs to know who is in arrears and on AFS. This should be noted in the chapter meeting minutes each week. Members on AFS are not eligible to vote. The VPC needs an update weekly of the financial status of all members. Vice President of New Member Education Work with the vice president of new member education (VPNME) to educate the new members on their financial responsibilities during their first meeting. The VPF should work with the VPNME to get new member fees and badge fees billed through Billhighway. Additionally, the VPF should send regular updates to the VPNME regarding fees that must be paid before New Member Ceremony and Initiation. After the funds are paid by the new members, it is the VPF's responsibility to issue a chapter check or make a payment using Send Money through Billhighway. Social Chairman The chapter president and VPF are the only two chapter members who are authorized to sign contracts on behalf of the chapter. The social chairman should be made aware that only the chapter president and the VPF can sign contracts as the social chairman will often have contracts requiring signatures. The social chairman may work with individuals or companies who may not be incorporated (such as DJs, bands, bartenders, caterers, etc.). As VPF, confirm that the social chairman obtains an IRS W-9 form for all vendors meeting the 1099 reporting requirements. As the VPF you will need to submit taxes once a year that will involve 1099 submission. Work with your FINA and collegiate finance coordinator if you have questions about this process. Note: If $600 or more is paid for rent or services, by check, during the calendar year to any one provider, a 1099-MISC must be filed utilizing the W-9 information. If the Billhighway purchasing card was utilized, neither the 1099-MISC Sigma Kappa Sorority Vice President of Finance Handbook page 14 or the W-9 is needed for that specific payment. All other payments made not using the Billhighway purchasing card will require both the 1099-MISC and the W-9 forms. Filing these 1099-MISC forms is the responsibility of the VPF at the local level. Other Officers and Chairmen Budgets should be set at the beginning of each term for all officers or chairmen requiring expenses. Hold periodic meetings with these officers to make necessary adjustments to the budget. Educate all officers and chairmen of the proper procedure for making purchases (i.e. using Authorization for Expenditure and Check Request form, signing contracts, etc.). Regular office hours are the best time to accomplish these tasks. Note: any revision to the chapter budget should be reviewed by the financial advisor and must be approved by the chapter and sent to national headquarters and the appropriate national officers. Please note the distribution list that appears on the top of the Annual Budget Template. The Chapter All members should be kept informed of the chapter's financial status. At all formal meetings, a financial report is given, which should include reading the names of any member in arrears. The VPC should note members in arrears and on AFS in the minutes. The VPF should inform chapter members of her office hours. Members should contact her if they have questions or need to establish alternative payment plans prior to being in arrears. Financial difficulties must be discussed prior to the date bills are due. Corporation Board/Facilities Committee If the VPF is a member of the corporation board/facilities committee, she should attend all meetings, understand her role as the liaison between the chapter and the board, and report applicable information to the chapter. In the absence of a local board, communicate directly with the housing coordinator or corporation liaison assigned to the chapter by the National Housing Corporation. Their contact information can be found on the chapter's Dove Hub roster of advisors. It is the responsibility of the VPF to reach out to the corporation board to determine which members are in arrears with the corporation board and to begin AFS procedures. National Headquarters Chapters utilize the Billhighway accounting services offered by NHQ and need to ensure the following occur: Respond promptly when a member of the staff contacts the VPF. Ensure all financial transactions occur in Billhighway. The chapter should not have any bank accounts that are not held through Billhighway. Sigma Kappa Sorority Vice President of Finance Handbook page 15 When the transition of the position occurs, ensure the new VPF contact information is added in Dove Hub and updated in Billhighway. Ask questions when information is not clear. Leadership Consultants and National Visitors Sigma Kappa's leadership consultants are a wonderful resource for the chapter. They have visited numerous chapters around the country and have many suggestions and insights. Be advised that the chapter is obligated to pay the room and food expenses for the visiting leadership consultants, or any national visitor that may visit. In the case of financial hardship, the chapter may petition for a waiver of all or part of these expenses prior to the visit. FILE ORGANIZATION The VPF needs to keep her files organized in a file cabinet or in clearly labeled file boxes, and stored in a dry, secure area. They should be easily accessible to the VPF and financial advisor. A flash drive dedicated specifically for digital chapter finance information should also be kept with the hard copy files. The document retention policy can be found in the National Policy Handbook and should be referenced as needed. The VPF files (electronic or hard copy) should contain the following folders: 1. Folders for each member and new member. Label each folder with the member's name and the school year. The contents of each folder should include: a. The member's financial responsibility form that was signed by her and her parent(s)/guardian(s) as a new member. b. A copy of any applicable payment plans. C. If the member is (or was) on AFS, all paperwork pertaining to AFS. d. Petition for financial expulsion, if member was expelled for financial reasons. e. A copy of all finance related correspondence with the member. 2. Folder for copies of all tax forms filed with the IRS. 3. Folder for copies of all tax forms filed with the state revenue department. Sigma Kappa Sorority Vice President of Finance Handbook page 16 4. Monthly financial reports sent by NHQ. 5. Folders for past years' monthly financial reports. 6. Folders for vendor invoices. 7. Folders including copies of previously submitted chapter supply order forms. When placing an order, keep a copy for your file and send the original to NHQ. 8. Folder for current chapter budget and schedule of charges. 9. Folder for past chapter budgets and schedule of charges. 10. Folder for the officer/chairman budget statements. Document Retention The VPF generates, maintains, and files a great deal of important information. The VPF should have a filing cabinet and/or electronic files for these records to ensure their safekeeping. If a flash drive is used to store financial information, a backup flash drive should be stored in the filing cabinet as well. Document retention should be performed yearly. The Sorority document retention policy is part of National Policy Handbook and is located on the members only side of the Sigma Kappa website. Financial Record Keeping Once the chapter budget is approved, records must be kept of the chapter's daily/monthly business. The VPF must use Billhighway to track all chapter finances. The following is a brief list of the steps the VPF takes for financial record keeping. 1. Prepare the member billing guide and budget for the year. 2. Prepare member invoices in Billhighway. The invoice is a prepared listing of the amounts due from each member or new member of the chapter. 3. Dues for the term should be billed on the first monthly invoice. Establish a payment schedule for the chapter. All members must be given the same payment options. All money owed to the chapter should be collected before the end of the term. 4. Print checks and use prepaid cards to pay bills to outside vendors and Sigma Kappa Foundation. Schedule payments using Send Money to pay Sigma Kappa Sorority and Sigma Kappa National Housing Corporation. 5. Supply NHQ with all information for filing federal taxes by the end of the fiscal year. a. After the federal tax forms, and state forms if applicable, are prepared by NHQ during the fall term, they will be forwarded to the VPF for her signature. She must sign and return immediately, following the included instructions. Sigma Kappa Sorority Vice President of Finance Handbook page 17 WHERE ALL THE MONEY GOES Fees Paid to the National Organization A calendar indicating fees that are payable to the national organization is located in the VPF annual supplies on the members only side of the Sigma Kappa website. An Sigma Kappa Sorority . Vice President of Finance Handbook page 18 explanation of each of the fees is below: New Member fee is paid once per new member and is due to NHQ within one week of the new member ceremony. The chapter can add an additional amount to be retained by the chapter to cover new member expenses such as Promise books, etc. New Member fees may be collected by check only prior to entering the new member in Dove Hub. Once the chapter enters a new member or potential new member in Dove Hub, the chapter will be liable for that individual's new member fee. National Collegiate Dues are paid annually to the national organization by all initiated collegiate members and new members that are held over for a term. National collegiate dues are based on the number of members on the chapter roster at NHQ as of September 30 each year. The new member fee and national collegiate dues help cover the following national expenses: Leadership consultant program National officer expenses Office space Legal fees Postage and printing Equipment and equipment maintenance Salaries for NHQ employees Updating and producing supplies, handbooks, and other publications Initiation fee is paid only once and MUST be paid to the national organization two weeks PRIOR to Initiation. The chapter can add an additional amount to be retained by the chapter to cover Initiation expenses such as flowers, Initiation banquet, room rental, etc. Liability insurance/risk management assessment is an amount established to cover the national liability insurance premium and costs for risk management programming. Each member should be assessed this fee to ensure she is aware that she is personally responsible for the protection of the chapter and Sigma Kappa Sorority. Advisory board liability insurance is billed to each chapter to provide insurance for the advisory board serving the chapter. Property insurance is billed directly to chapters that do not have a local corporation board/property committee. These assessments are separate from the liability insurance and must be paid separately. Property insurance covers chapter items in storage or located in a suite, lodge, or residence hall. Items such as ritual equipment and awards are also covered. Accounting fee is based on a percentage charged to cover processing fees from Billhighway. This is in addition to the Billhighway Maintenance Fee. Chapters are charged 4.6% on all revenue paid for by the member using a credit/debit card Sigma Kappa Sorority Vice President of Finance Handbook page 19 and 1.6% for any revenue paid for by the member using a check. Tax preparation fee is an amount charged for federal and state tax preparation fees based on the type of federal return required. Communication fee is charged to develop and maintain online programs, publications, and services that are used to communicate to the membership. PNM tracker fee is paid each year by chapters to cover the costs for the potential new member tracker program (Select-A-Sis. Chapter donations and philanthropic contributions. All Sigma Kappa chapters are expected to support the Sigma Kappa Foundation. The Collegiate Chapter Contribution Form is to be submitted with the chapter's contributions following each event. Fees Paid for Property Management and Chapter Operation Housing/furnishing fee is the member's investment in the future of the chapter. The amount is established by the local corporation board or facilities committee, if one exists. It is a flat fee, which should be paid during the first year of membership. The minimums for this fee are established in the National Policy Handbook. This money is not used as operating money for the house corporation. It is strictly a savings account for the purchase of housing, furnishings or redecoration. Every chapter must have a housing/furnishing fee whether they have a house or not. Experience has proven that no chapter is able to predict what it may need in the way of funds for furnishing a chapter room, participating in a Panhellenic house, buying or renting land, and buying or building a house. The chapter must be ready to meet this challenge. This fee is non-refundable, even if the woman withdraws, and is a one-time assessment. Parlor fee is paid by all members and new members not living in the sorority house (there are special situations where all members, live-in and live-out, may be assessed this fee). The amount is to be determined by each corporation board/facilities committee or chapter in absence of a corporation board/facilities committee. This fee is paid to the local corporation board or the National Housing Corporation (NHC), for the use of the chapter house, lodge, suite or meeting room. Chapter rent is the amount paid from the chapter budget for its proportionate share for the use of the property (if applicable). Room and board is the fee charged to those members and new members living in the chapter house. This fee is set by the local corporation board or property committee to cover the operating expenses of the chapter house. Chapter dues are fees set by the chapter. They are used for the operating expenses and activities of the chapter. It is recommended that dues include as many expected expenses for the member as possible to avoid additional assessments throughout the year. Included should be: chapter formal, Sigma Kappa Sorority Vice President of Finance Handbook page 20 Founders' Day, Greek Week, T-shirts, recruitment clothing, etc. Consideration should be given to what the other sororities on campus are charging. Sigma Kappa wants to be neither the least nor most expensive. Efforts should be made to keep Sigma Kappa in the upper-middle range. CHAPTER BUDGET A budget is a series of financial goals. Goals are meant to be reviewed, assessed and revised from time to time. The budget reflects the money expected to be received and the money planned to be disbursed. If membership numbers change, the budget should be changed. The budget is the chapter's financial plan for the fiscal year. The chapter's fiscal year end is May: the budget is the time period June 1 through May 31. In early spring, ask each officer/chairman to furnish a detailed estimate of the money she will need (or would like to have) for her office for the coming school year. This is very helpful in estimating the chapter expenditures. Be certain the officer/chairman realizes that it is not a guarantee that the amount she lists will be allocated to her. Also, review the monthly financial reports from the previous year to determine items that may need to be budgeted. The budget should be under constant review as this is a living document. As membership numbers fluctuate, it should be revised. The recruitment results and the actual number of new members, along with the actual number of members returning, may vary from the budget and should be adjusted accordingly. If revisions are necessary, send revised copies to those individuals indicated on the budget template after the budget has been approved by a chapter vote. Receipts (Income or Revenue) The VPF should utilize the automated Excel budget template that is available on the members only side of the Sigma Kappa website when creating the chapter budget. This file allows the VPF to enter figures and will automatically calculate totals. 1. Determine the number of members who will be returning to school in the fall. Work with the vice president of membership (VPM) and the VPM advisor to estimate the number of new members that will be taken during recruitment, both fall and spring. Estimate the number of members either graduating midyear or who will be taking an approved leave of absence, including members studying abroad, student teaching and with internships. A conservative estimate of the number of members and new members is recommended. Sigma Kappa Sorority Vice President of Finance Handbook page 21 2. Work with the member billing guide to develop the receipts (revenue), which will be generated by the chapter members and new members. An accurate schedule of charges will make the budget process much easier. 3. Amounts computed on the schedule of charges are carried through to the budget. 4. List traditional philanthropic fundraising events held each year in the Receipts column and the corresponding expenditure in the contributions-expense column. Fundraising efforts must be used only for specific philanthropic purposes. No funds from fundraising may be used to offset chapter operating expenses. Please be sure to follow the 35% rule guidelines that are emailed to you in the fall term by NHQ. For more information about the 35% rule, see page 25 of this handbook and/or access the Fundraising Cap letter in VPF supplies. 5. To budget for member dues, calculate the number of members who will graduate at mid-year and make the appropriate adjustment. Members on a leave of absence or who are away from campus for study abroad or internships may be exempt from member dues, if voted by the chapter. However, these members are responsible for national fees (i.e. national collegiate dues, national liability insurance, etc.) a. Multiply the number of members returning by the dues per member, per billing period, by the number of billing periods dues are collected. b. Multiply the number of expected new members by the total new member fee. C. Multiply the number of expected new members by amount of new member dues per billing period times the number of billing periods. d. Multiply the number of projected initiates by the Initiation fee. It is suggested that the percentage of budgeted initiates reflect the percentage from the previous year. e. Multiply the number of members and expected new members by any regularly set assessments (national collegiate dues, new member fee, liability insurance fee, accounting fee, Panhellenic dues, etc.) 6. The number of new members should be the same for new member dues, new member fees, and parlor fees when calculated. You may use a lower number for Initiation fees based on historical retention of new members and holdover members. Disbursements 1. To calculate expenses, first figure out what is due to the national organization: a. New member fee - national fee multiplied by the number of new members expected plus holdover new members. Sigma Kappa Sorority Vice President of Finance Handbook page 22 b. Initiation fee - national fee multiplied by the number expected to be initiated in the fall and spring. C. National collegiate dues - national fee multiplied by the number of members (not new members) returning in the fall. Remember, each woman pays either a new member fee or national collegiate dues in the fall, not both. d. Communication fee - national fee multiplied by the number of members and new members in the spring. e. Liability insurance to NHQ multiplied by the number of members and new members. f. Advisory board liability insurance is a fee each chapter pays for their advisory board. g. Accounting fee is a fee for the chapter based on actual accounting fee for tax return preparation. 2. Figure your fixed local expenses: a. Panhellenic dues multiplied by the number of members and new members. b. Rent for the chapter room, suite, lodge, etc., if collected by the chapter. C. Property insurance. 3. Calculate other local expenses, based on last year's actual costs. a. Convention expenses to send one chapter advisor and two collegiate delegates. A recommended amount to budget is included in the budget template. Some of the expenses for the first collegiate delegate and advisor may be paid for by the national organization. Any convention allowances are determined by national council and will be communicated in convention registration materials. b. RLC expenses (including all travel costs) to send one chapter advisor and 12 chapter officers. A recommended amount is included in the budget template. C. Recruitment expenses. This amount should not exceed the local cap as voted on by the College Panhellenic, if one exists. d. New member and Initiation expenses including Bid Day and banquet expenses. e. Philanthropy contributions to national and local projects. f. Postage and supplies. g. Campus activities - homecoming, Greek Week, songfests, spring fling, etc. h. Flowers/gifts. i. Chapter officer/chairmen expenses. j. Social expenses - mixers, formals, date parties, etc. k. Misc. expected expenses - composite photo, Founders' Day, Parents' Weekend, etc. I. Gift to Sigma Kappa Foundation- If the chapter has a surplus of funds at the fiscal year end, the chapter must retain enough money for fall recruitment expenses. Once the chapter has determined it has retained adequate funds Sigma Kappa Sorority Vice President of Finance Handbook page 23 for fall recruitment expenses, the chapter may make a donation to the Foundation with any excess funds left after accounting for fall recruitment. 4. If the expenses exceed the receipts, dues must be raised or expenses lowered. The budget for the year must be presented to the chapter for a vote prior to its due date to NHQ indicated on the budget template. The VPF and her advisor must be prepared to justify the calculations and allocations, especially if an increase in dues is recommended. Submit the budget once it has been approved by the chapter. The chapter's budget is reviewed by NHQ and then input into Billhighway as the VPF and FINA do not have access to do this. Each officer/chairman must be given a form with her budget allocation to track the money she spends during the year. The VPF should review this sheet with each officer monthly, using the year-to-date amounts compared to the budget from the monthly reports. This will keep everyone aware of what has been spent and help them stay within the chapter budget. In addition, the VPF should keep individual account records for each officer/ chairman budget and reconcile them monthly. See sample on the members only side of the Sigma Kappa website. Helpful Budgeting Tips If the chapter ended the prior year with a deficit (not enough money to cover expenses), review expenditures and revise the chapter budget. The chapter will need to decide to raise dues or cut spending. If programs or social events during the past year did not go as well as expected, the VPF may be able to work with the appropriate officer to cut those expenses for the next year. Programs that are not well attended are not worth the time or the money expended. Remember, receipts MUST equal expenses on the budget. For questions on how to prepare a budget or use of the budget template, contact the financial advisor, collegiate finance coordinator or NHQ. A fine is levied for chapters failing to submit a budget to NHQ and it is considered outstanding business. Submitting a balanced budget is also a requirement for Standards of Excellence (SOE). Sigma Kappa Sorority Vice President of Finance Handbook page 24 ACCOUNTING PROCEDURES Additional Assessments Additional assessments of members are discouraged. Strive to live within the chapter budget for all activities. Assessments for social functions, t-shirts, etc. should be included in dues. If it is necessary to place individual orders for things like pictures, apparel, favors, etc., the order must be paid in advance by the member or new member. The VPF should either create an invoice in Billhighway for these orders, or she will need to enter a deposit to be mailed in to Billhighway. If a deposit will be mailed in, a deposit slip (found on the Billhighway website) must be sent in with the checks in order to ensure the payments are properly recorded by Billhighway Deposits Do not accept cash as payment for dues or fees, etc. All members and new members should utilize their Billhighway accounts to submit payments. This ensures proper credit for the payment. If for some reason the VPF does need to mail checks in to Billhighway for un-billed payments, the VPF must record the deposit manually in Billhighway and print a deposit slip to be sent in with the checks. For further assistance, please contact Billhighway's customer support at (866)245-5499 or by email at sksupport@billhighway.com. Everyone loves Venmo, and for good reason. The PayPal-owned app provides a frictionless way for friends to pay one another without ever touching cash. And if one of your pals "forgets" to pay what they owe, you don't have to resort to the awkward (and old-fashioned) step of asking for the money- the app's "request" button will do the job for you. However, Venmo lacks security, consumer protections, and customer service. It is especially important to know that the funds do not transfer instantly even though the application sends you a message saying the amount has been added to your account. MJ Insurance, the insurance provider for the Sorority, requires the use of dual controls for our corporations. When asked about Venmo they stated, "Dual controls do not exist in our opinion and the opportunity for fraud is apparent, even by their own admission." This means that MJ Insurance is not able to insure Venmo or any of it's transactions based on their company policies. While we understand the convenience that Venmo provides to the chapter, Sigma Kappa is unable to support use of this application at this time. Paying Bills Sigma Kappa Sorority Vice President of Finance Handbook page 25 Use an Authorization for Expenditure and Check Request Form (see sample on the members only side of the Sigma Kappa website) when reimbursing members. Expenditures by officers, chairmen and members must be approved by the VPF prior to any item being purchased. This form must be completed by the member requesting a check and approved by the officer whose budget will be charged. Using this form will allow the VPF to print checks once a week. Keep a supply of the forms available for member access. No reimbursement is to be made without a receipt for the purchase. Monies due to the corporation board/facilities committee must be paid in full by the first of each month. These may include room and board, housing and furnishing fees and parlor fees. Pay all bills promptly! The financial advisor must approve check requests in Billhighway before the checks may be printed. In the absence of a financial advisor, the ABS also has the ability to approve checks in Billhighway. All checks must be issued and printed utilizing Billhighway. Do not manually write a check on chapter check stock. Billhighway will not allow the VPF to print a check if there are insufficient funds to cover that check. It is the responsibility of the VPF to know what funds are available and ensure necessary funds are available to pay bills on-time. Do not pay a new member fee, Initiation fee or badge order to NHQ unless the new member has paid the full amount due to the chapter. Delinquent Accounts Pay all national obligations promptly. The chapter will be invoiced each month for national fees. Penalties are levied for late payments. If further delinquency continues, the national vice president for finance and director of finance will determine the appropriate plan of action. Billhighway Prepaid Cards A chapter's Billhighway Prepaid Card is a payment card that can be loaded with funds from the chapter's Billhighway account. The card can be used at most merchants where MasterCard Network Cards are accepted. The Billhighway Prepaid Card is not a credit card or debit card as it allows you to spend only the amount of money you add to the card. It cannot be used to withdraw cash at ATMs. Who can order a Billhighway Prepaid card? President Vice president of new member education Vice president of membership Sigma Kappa Sorority Vice President of Finance Handbook page 26 The VPF is not eligible for a prepaid card as she manages the chapter's Billhighway. How can the above officers order a Billhighway Prepaid card? 1. Login to Billhighway 2. Go to Cash Out > Prepaid Card > Order Card. 3. Enter your name (this will be the name that appears on your prepaid card). 4. Enter your valid date of birth (DOB) - your DOB is used for identity verification ONLY. 5. Enter your address (this is where the card will be delivered). Only physical (non- P.O. Box or campus box) addresses are accepted. 6. Click Submit. Once a card is ordered, it will arrive at the address provided within 7 - 10 business days. Upon receiving the card, the officer will need to activate it by calling the toll free number provided in the mailer. There is a $6.00 fee to the chapter's general checking account when a card order is fulfilled. Coding Billhighway Prepaid Card transactions Following all purchases with the prepaid card, the chapter officer should code the transactions on Billhighway. We recommend coding these transactions weekly. Coding the transactions ensures that all areas of the budget are current and up to date. To code the transactions, complete the following steps. 1. Go to Cash Out > Billhighway Prepaid Card > Code Card Transactions 2. Select the purchase/transaction that you would like to code by clicking the check box on the far left. You can select ALL transactions if they are all to be coded at the same time. 3. Choose the appropriate budget expense category for the transaction(s) selected. 4. Choose the appropriate vendor for the transaction(s) selected. If the appropriate vendor is not listed, click the Add Vendor link to add the vendor. When you return to the Code Card Transactions page, the newly added vendor will appear for your selection. 5. Click Submit. Your prepaid card transactions will be posted immediately to the selected budget category/Chart of Account, which you can view by going to Reports > Online Inquiries > Budget Variance Report. Things to Remember about Billhighway Prepaid Cards Only the cardholder should be using the prepaid card. If other officers need to make purchases, one of the cardholders may accompany them, but they should not pass their card to any other officer, chapter member, advisor, NHQ staff member or national volunteer. The billing address for the Billhighway purchasing card is the chapter's Sigma Kappa Sorority Vice President of Finance Handbook page 27 address listed in Dove Hub. Receipts from all purchases made by the cardholder should be submitted to the chapter vice president of finance. The financial advisor or ABS must approve all prepaid card load requests in Billhighway before the funds will be available on the card. Sigma Kappa Sorority . Vice President of Finance Handbook page 28 TRACKING MEMBER PAYMENTS Individual Member Financial Records Individual member financial records should be recorded and updated in Billhighway. Each member's information will be automatically transferred into Billhighway within 48 hours of entry in Dove Hub. It is crucial that the VPF and the VPNME work together to ensure that new member information is entered accurately and timely in Dove Hub so the new member Billhighway accounts can be created accurately and so the chapter can bill the necessary fees as soon as possible. Use the individual member records to prepare monthly billing invoices. If kept up to date, a quick look at the individual member record will indicate if a member is paid or in arrears. The VPF must know this information for each meeting and read the names of members in arrears at meetings. Members 30 days in arrears should immediately be put on AFS by following the process for financial suspension and may not vote or attend any social functions. Fees for late payments and fines should be added to the monthly charges and entered separately from dues on the member record. Billhighway will also assess an automatic late fee of 3% or $1, whichever is greater, directly to a member's account who is 30 days past due. This is in addition to any late fees assessed by the chapter. Payment plans for members are permitted. The guidelines should be outlined in the chapter's Code of Conduct and voted on appropriately. Monthly Financial Reports NHQ will electronically send a monthly financial report to all chapters. Items to check as soon as the monthly report is received include: Balance Sheet - this report details assets, liabilities, and chapter equity. Income Statement - this report details all income and expenses. This report will help you determine whether a general ledger account is under or over budget. This will be useful to keep officers on track. Member Aging - this report details any/all members who owe the chapter money. This report will be helpful to bring to chapter meetings for a quick glance of who owes money. Budget Variance report- this report compares the amount budgeted to the actual amount available in the chapter budget, as well as the amount available in each budget account. Sigma Kappa Sorority Vice President of Finance Handbook page 29 Correcting for Non-Sufficient Fund (NSF) Checks A non-sufficient fund (NSF) check is a check that the bank returns to the originator marked: insufficient funds. If the chapter receives NSF checks, they should be returned to the chapter member who wrote the check immediately for payment. Billhighway charges a NSF check fee that is passed on to the originator. Many chapters assess additional fines (at least $25 is recommended) in addition to what Billhighway charges. If the chapter does choose to add an additional fee, make sure this policy is clearly stated in the chapter Code of Conduct. Collecting from Members The chapter cannot be responsible for covering expenses of members who do not meet their financial obligations. In order to collect these expenses, the VPF must maintain the following: 1. A Financial Responsibility Form signed by each new member and her parent/guardian. The VPNME usually distributes and collects these forms during Promise for New Members meetings. Be proactive! Work with the VPNME to ensure that each form is appropriately signed and filed in a safe place. This form must be completed prior to Initiation. This will be the VPF's contract to use in the event of any necessary legal collection action. This form needs to be retained for five years, or longer, if the member owes money. 2. Each new member/member must receive a detailed statement of what she owes. 3. All chapter members and new members must be made aware of your chapter's procedures in the collection of all bills. 4. Consider including this procedure in the chapter's Code of Conduct (CoC). After 30 Days: Automatic Financial Suspension When a member is 30 days in arrears (their debt is 30 days past due), national policy requires that the member must be immediately suspended, documentation completed, and the member's badge and membership certificate secured. Refer to the VPF annual supplies for a flow chart review of the AFS procedure. This national policy outlines the steps necessary to accomplish the process in a professional and fair manner to both the member and the Sorority. 1. The VPF is responsible for notifying the chapter president, executive council, and the financial advisor when a member is 30 days in arrears. The chapter should base their 30 days in arrears off their billing cycle as noted in their COC, which may or may not be the same as Billhighway's due date. Sigma Kappa Sorority Vice President of Finance Handbook page 30 2. The VPF notifies the member in writing that she is on AFS and that she is to attend a meeting with the VPF, financial advisor, and/or ABS, to discuss her indebtedness and how it will be paid. The notification from the VPF should be sent via email with read receipts on or sent as a dated hard copy letter with return receipt request. This meeting is not part of a standards council proceeding. 3. During the meeting, a time limit is set for the debt to be cleared. It is recommended that the debt be cleared, at the latest, by the end of the current school term. At the meeting, the Notification of Automatic Financial Suspension form, including the AFS Payment Plan Form, must be completed and signed by the member, the VPF, and the financial advisor. This form is on the members only side of the Sigma Kappa website. Copies of the notification must be sent to all individuals noted on the form. Remember, AFS is not a standards council issue. The AFS form serves as the documentation. During such a suspension: The member is responsible for all bills and fees, both local and national, incurred during the time of suspension. The member must attend all mandatory events. The member cannot hold office and cannot attend any social functions during her suspension. A member on AFS may not withdraw her membership until her debts are paid in full. If the member does not clear the financial indebtedness by the set date, financial expulsion proceedings must be initiated. The ABS or financial advisor shall hold the member's badge and membership certificate until the indebtedness is cleared. Reinstatement: Reinstatement of a member occurs automatically upon payment of all outstanding bills. Her badge and membership certificate are then returned. At this time, the VPF must complete the Notification of Removal from Financial Suspension, page two of the original AFS form. Financial Expulsion A member is expelled for financial reasons if she fails to meet her AFS payment plan. The VPF will submit a Financial Petition for Special Dispensation as outlined in the National Policy Handbook. The form is located in the annual supplies for the VPF. The member will be expelled upon approval of the petition by national council. No chapter vote is required if all the AFS forms and documentation have been signed by the member. If the member has not signed the form or the form cannot be located, then the VPF will need to bring the matter to the chapter for a vote of expulsion. Financially Sigma Kappa Sorority Vice President of Finance Handbook page 31 expelled members of Sigma Kappa may not be reinstated while they are in college. Collection Proceedings When a member fails to meet the set date for repayment of debt, official collection procedures should be initiated. Refer to the annual supplies for a flow chart of the collection procedure. The VPF should contact Billhighway directly to initiate collections proceedings. Billhighway will not start collections without receiving the Collections Form, which is available in Billhighway. The chapter will be automatically charged a collections fee by Billhighway when the collections process is started. In all situations, the VPF must have a signed Financial Responsibility Form and proper documentation (copies of bills, certified return receipt letters informing the member of the indebtedness, AFS form, promissory note, meeting minutes, etc.) to prove that the member was duly informed and has not fulfilled her financial responsibilities. 1. Send a collection notice letter to the member and her parents/guardians. This letter states that she has failed to meet the deadline to clear her debt and that further action is necessary to collect. This letter informs the member and her parents that if the money is not received within 10 days, the debt will be turned over to a collection agency. A sample letter is included in the VPF annual supplies. Copy the chapter president and the financial advisor. 2. If the payment has not been received after the 10 day due date noted in the letter, the VPF and the financial advisor (or ABS, if applicable) should contact Billhighway to begin collections, small claims court, or the university/college. REVIEWING THE CHAPTER'S FINANCIAL HEALTH The checks and balances in the financial area ensure proper record keeping and sound financial practices. The following information should be available to the financial advisor and/or the ABS, the director of finance, the national vice president for finance, and the leadership consultants or other staff who may visit the chapter. They will need this information in order to have a better understanding of the chapter's financial health. As the VPF, utilize these questions as a checklist to determine the progress and the areas that need attention. A periodic review will help the chapter stay on track and ensure the chapter's financial health. Sigma Kappa Sorority Vice President of Finance Handbook page 32 Are members receiving monthly invoices? Is Billhighway being utilized? Have monthly reports been received and reviewed? Are all members current in their payments? Are all new member fees, Initiation fees and badge fees collected prior to chapter payment to NHQ? Are national liability insurance, national fees and other recurring bills paid in a timely and consistent manner? Are all monies due to the corporation board paid on time? If there are members in arrears and the chapter does not have enough funds to meet all its financial responsibilities, the corporation board/facilities committee and national obligations must be paid first. Are AFS/financial expulsion/collections procedures are being followed? Are signed financial responsibility letters on file for each new member prior to Initiation? A collection agency will require this documentation should a member default on her financial obligations. Review the current budget status: Check the income against the budget amounts. Check the disbursements against the budget amounts. How is the chapter doing? Do adjustments need to be made? Are the year-to-date receipts greater than the year-to-date expenses? Is the chapter effectively utilizing and managing their Billhighway prepaid cards? ROLE IN NEW MEMBER EDUCATION New member education is the period during which the new members learn the responsibilities of membership in Sigma Kappa. The VPF and financial advisor are responsible for educating the new members on the importance of financial responsibility and encouraging them to pay their bills in a timely manner. It is very important that each new member has the benefit of this explanation during the first meeting in the Promise for New Members program. The following information should Sigma Kappa Sorority Vice President of Finance Handbook page 33 be covered during that time: Explain chapter finances. Be sure to explain the fees (new member, Initiation, badge, dues, housing/furnishing fee, etc.) the new member must pay during the first year of membership. Refer to "Where All the Money Goes" for further explanation of fees. This is also an appropriate time to explain again that all members of Sigma Kappa must live in the house/suite/lodge/residence hall floor when the chapter owns or rents housing and space is available. Convey the importance of an individual member's financial responsibility to the successful operation of the chapter. Review financial policies in the chapter Code of Conduct and the National Policy Handbook. Share that parents/guardians will be notified by letter or e-mail of the above information. Make certain to include an explanation of the housing/furnishing fee and the chapter's policy of determining who will be living on the sorority premises. Parents/guardians of new members should be sent the Financial Responsibility Form and financial information no more than two weeks after the New Member Ceremony. This written consent to the financial obligations assumed by the new member must be signed and returned to the chapter before the new member can be initiated. This form and related materials are available on the members only side of the Sigma Kappa website. In addition, the VPF needs to work with the VPNME to determine which new members have met the financial requirements prior to Initiation. A pre-Initiation review meeting should be held with the VPS, VPNME, VPF, and the advisor to the VPNME. This meeting is an opportunity to verify that each new member has met the qualifications for Initiation. New members should not be present during the pre-Initiation review. This review should be completed before the start of Inspiration Days. If a new member has not met the financial, scholastic, or educational requirements to be initiated, her initiation may be delayed or terminated. If her initiation is delayed to a following term, she is considered a "holdover" new member. FUNDRAISING Fundraising cannot be used to supplement or cover chapter expenses of any kind. This policy must be adhered to strictly. We cannot use fundraising for chapter expenses Sigma Kappa Sorority Vice President of Finance Handbook page 34 because it could affect our tax-exempt status as defined in federal law. Fundraisers are to be used for philanthropic endeavors only. All questions pertaining to fundraising should be directed to the Sigma Kappa Foundation. All fundraising results must be reported to the state and federal governments. Approval from the state authorities may be required for fundraising activities including raffles (some states consider this gambling). All funds donated as a result of fundraising must be turned over to a charity as a charitable contribution. The 35% Rule As non-profit organizations, 501 (c)(7), alumnae and collegiate chapters are held to the 35% rule. This means that the proceeds from any fundraisers PLUS all other non- member income, (such as dividends and interest for alumnae chapters), may not exceed 35% of the total gross receipts of the chapter. Donations to a chapter from individual alumnae or alumnae chapters are considered member income and are not subject to the 35% rule. 35% Rule Example Alpha Alpha chapter has budgeted $30,000 in total estimated receipts for the year as reported by the VPF on the annual budget. (These receipts represent ALL MONIES received by the chapter including member dues, fees, and any other income such as contributions from a fundraiser or national campaign event.) The chapter has already collected and donated $576 to the local Alzheimer's Association for the chapter's participation in the Walk to End Alzheimer's. Alpha Alpha then hosts a golf tournament that raises $8,000. The tournament costs $2,000 for the chapter to host (advertising, greens fee, prizes, other expenses), which has been budgeted and paid for with the VPPS budget. 1. Under the 35% rule, Alpha Alpha cannot raise/collect more than $10,500 (35% of the $30,000) from non-member income. All monies received from the golf tournament, national campaign, and/or other non-member income, such as donations from parents or t-shirt sales, cannot exceed $10,500 for the year. 2. Of the $8,000 raised during the tournament, $235 was donated by Sigma Kappa alumnae. Because this amount is not subjected to the 35% rule, it may be deducted from the $8,000 for the purposes of tracking non-member income. Thus, the amount raised by the tournament from non-members is $7,765. 3. All fundraising proceeds must be donated to the Sigma Kappa Foundation or another 501(c)(3) organization. Alpha Alpha will donate $8,000 in proceeds from the golf tournament to the Sigma Kappa Foundation. 4. Alpha Alpha will still be able to raise $2,159 for charitable purposes for the remainder of the year. Sigma Kappa Sorority Vice President of Finance Handbook page 35 $10,500 (35% of $30,000 total estimated receipts) -$7,765 (income from the golf tournament less alumnae donations) -$576 (income from the Walk to End Alzheimer's) $2,159 (remaining amount that the chapter may fundraise or collect from non- members for the remainder of the year) Supporting the Sigma Kappa Foundation Sigma Kappa Sorority supports the Sigma Kappa Foundation national Ultra Violet campaign and Walk to End Alzheimer's as official fundraising events for collegiate and alumnae chapters. The Sigma Kappa Foundation relies upon the financial support of collegiate and alumnae chapters, individual members and nonmembers for the continued success of its many educational and charitable programs. The Sigma Kappa Foundation Contribution Form is to be submitted anytime a fundraiser is held SO that all contributions to the Sigma Kappa Foundation are reported. This form is found in the annual supplies. This form must be submitted to the Foundation within 30 days of the event. Specifics of the fundraising policy include: 1. All fundraisers of alumnae and collegiate chapters must be approved by the respective national officers as indicated on the approval form. This form is found in the annual supplies for the vice president of philanthropic service (VPPS). 2. NHQ will review each collegiate chapter's budget in the spring for the amount the chapter can raise within the 35% rule. Each chapter's VPPS, president, VPF, ABS, and the appropriate national officer will receive from NHQ the notice and is expected to adhere to the percentage. The Fundraising Cap letter is also found in VPF supplies. Anytime there are changes in the projected receipts (i.e. changes in membership totals) the maximum amount the chapter can raise will need to be adjusted accordingly. 3. When a fundraiser is expected to exceed 35%, it is referred to the national vice president for finance by the ABS and/or CFC or collegiate district director (CDD). 4. When participating in Walk to End Alzheimer's, 100% of the donations shall be forwarded to the local Alzheimer's Association chapter. Checks shall be made payable to the local Alzheimer's Association chapter. A record of these contributions should be monitored and included in the VPPS annual report to ensure that proper credit is given both to the chapter and to the national organization by the national Alzheimer's Association. 5. Financial donations received during an Ultra Violet event should be made payable to the Sigma Kappa Foundation. 6. Tax Deduction Guidelines a. Cash, service, and product contributions to collegiate and alumnae chapters are not tax-deductible to the donor. Collegiate and alumnae chapters as adjuncts of the Sorority are not defined as charitable organizations by the Internal Revenue Service. Sigma Kappa Sorority Vice President of Finance Handbook page 36 b. Gifts made directly to the Sigma Kappa Foundation are tax-deductible. The Foundation will issue a receipt to the donor for their tax records. If the sponsor indicates which collegiate chapter or alumnae chapter solicited the gift, the Foundation will credit that chapter with raising the donated funds. C. Gifts made directly to local chapters are not tax-deductible. Communications to raise such gifts must state in the same size font as the rest of the receipt/letter that the gift is not tax-deductible as a charitable contribution. The statement must be in a separate paragraph. Local chapters may issue receipts or thank you letters stating the amount of the gifts. If you have further questions about fundraising, please refer to the Handbook for the Vice President of Philanthropic Service, the Ultra Violet Campaign Manual or contact the Sigma Kappa Foundation. TAX REQUIREMENTS Form 990 Each chapter that brings in more than $200,000 a year in gross receipts is required by federal law to report all financial activity on the Form 990. This annual tax return is completed by NHQ for all chapters. Please make sure that Billhighway is utilized and there are no additional bank accounts to ensure these returns are accurate. 990EZ Each chapter that brings in more than $50,000, but less than $200,000, a year in gross receipts is required by federal law to report all financial activity on the Form 990EZ. This annual tax return is completed by NHQ for all chapters. Please make sure that Billhighway is utilized and there are no additional bank accounts to ensure these returns are accurate. Once completed by NHQ, the Form 990EZ copies will be sent electronically to the VPF for signature. Please sign and return promptly as instructed. With the deadline for tax forms due by October 15th each year, the VPF will get the tax forms from NHQ in early fall and will need to sign them and send back very quickly. A separate form (Form 990T) must also be filed if the chapter has received income from sources other than members (i.e. interest income, gifts from non-members, etc.) of $1,000 or more. The due date is the same as the Form 990EZ. Sigma Kappa Sorority Vice President of Finance Handbook page 37 Form 990N Chapters that bring in less than $50,000 a year in gross receipts are required to file electronic form 990N. This annual tax return is completed by NHQ and upon completion the chapter will receive an electronic confirmation. This confirmation should be retained in the chapter files. The IRS charges a fine plus interest per day, for each day the tax return is late. This fine is paid by the chapter if the forms are not returned to NHQ by the date listed. Submitting a 990 and signing the form on time is a Standards of Excellence requirement. Tax Forms all Chapters are required to Prepare Locally Form W-9 - Request for Taxpayer Identification Number Prior to providing services, this form is to be completed by ALL vendors the chapter will pay $600 or more, by check, during the calendar year (January 1 - December 31) for rent or services (DJ, band, bartender, photographer, etc.). Please note, if the chapter is paying the vendor using the Billhighway prepaid card, you do not need the vendor to complete the W-9. This applies to both individuals and unincorporated businesses. A copy of the form is included in the VPF annual supplies for the year and may be duplicated as needed. The W-9 form is used to determine if a Form 1099 must be filed and to obtain the information needed to file a Form 1099-Misc as described in detail in the following section. This completed form is to be kept with all VPF materials and not submitted to the IRS or NHQ. If a vendor refuses to supply a W-9, the vendor may be subject to withholding tax to be deducted from the payment. Please refer to IRS regulations for further instruction. It is recommended that the VPF explain the requirements to any officer planning events that require using vendors. Form 1099-Miscellaneous Income This is a federal tax form that may be obtained online at www.irs.gov, from the local IRS office or from most office supply stores. A 1099 is to be completed by January 31 for each unincorporated vendor that the chapter paid $600 or more, by check, to during the previous calendar year for any services provided or rent. The VPF must distribute the 1099 (Copy A) along with the Form 1096 (see below) to the IRS by January 31 to avoid IRS penalties. (The IRS website address for forms is http://www.irs.gov/formspubs). Copy B and Copy 2 must be sent to the vendor by January 31 to avoid IRS penalties. Copy 1 will be submitted with the state tax filings (where applicable) and Copy C is for the chapter's records. These forms are two to a Sigma Kappa Sorority Vice President of Finance Handbook page 38 page. If only one form is used, submit the whole page. Do not fold these pages when submitting them to the IRS. For further instructions, see the instruction guide available from the IRS. If the VPF is unsure as to whether or not someone should receive a 1099, please contact the financial advisor, collegiate finance coordinator, or director of chapter finance for guidance. Form 1096 - Annual Summary and Transmittal of U.S. Information Returns This is a federal tax form that may be obtained from the local IRS office (free from 1-800-TAX-FORM) or from most office supply stores (for a minimal expense). The 1096 form is used as a cover page for the 1099s that are sent to the IRS. Complete one form to enclose with the 1099s. Do not fold this page. Important: Make copies of everything for the chapter files before mailing items to the IRS. The IRS may ask questions regarding these forms long after the current VPF is no longer in office. If the chapter receives questions from the IRS, contact the CFC for additional assistance. State Income Taxes In the event that your chapter is required to submit a state tax form, the form will be completed and sent with the federal tax return. The VPF is responsible for signing the forms and returning them to NHQ for submission. In most cases, this is just for information only, and only requires the same information provided on federal forms. Sigma Kappa Sorority Vice President of Finance Handbook page 39 SIGMA KAPPA Live with Heart 695 Pro-Med Lane, Ste 300 Carmel, IN 46032-5323 317-872-3275 f: 317-872-0716 e: info@sigmakappa.org www.sigmakappa.org Sigma Kappa Sorority Vice President of Finance Handbook page 40