AFS - USA, Inc. is a not-for-profit corporation and as such is exempt from income tax pursuant to Section 501(c) 3 of the Internal Revenue Code. AFS-USA must demonstrate to the Internal Revenue Service that the organization maintains proper control over the use of all funds raised and held in its name. Furthermore, we must keep accurate and complete records in order to establish that our funds are used only for the purpose of achieving the tax exempt purposes of AFS-USA, Inc.
AFS-USA must adhere to regulations as promulgated within US Generally Accepted Accounting Principles (GAAP). The organization is audited each year by an independent accounting firm to ensure that the financial statements are in compliance with GAAP. It is critically important that AFS-USA receive a clean audit opinion which certifies that there are no material errors or misstatements in our financial statements.
Funds held in team bank accounts are to be used at the Team’s discretion and in accordance with the purposes and guidelines as outlined in this manual. It must be noted that all cash held in Team accounts is reported as an asset of AFS-USA on our audited financial statements. The President, the CFO and the Board of AFS-USA have the ultimate fiduciary responsibility to ensure that all assets are reflected accurately in our financial statements. This can only be accomplished in full partnership with Team Chairs and Treasurers.
In cases where there is a lack of compliance with any of the principles and guidelines outlined in this manual, we reserve the right to close local Team bank accounts and transfer the cash into an account, for the Team’s behalf, but under the management of Finance staff.
In order to receive a clean audit opinion and to receive contributions from individuals, foundations, corporations and the United States Government, certain requirements must be met within specifically established reporting periods.
Below are some of the key requirements with which we must comply:
- Every financial transaction must be supported by the proper documentation, which includes receipts for expenditures, back up for donations and other deposits, names of donors.
- Appropriate controls are in place to monitor expenditures. All spending should be approved by the relevant parties and in accordance with spending guidelines.
- Financial activities are to be reported timely during the calendar year. Any transaction specific to a particular year must be reconciled and reported to Field Finance staff in that same calendar period.
- All funds received as donations must be in the name of AFS-USA (NOT in the name of the Team or an individual). All donations must be disclosed to AFS-USA or they may be disqualified for tax exempt status.
- All bank accounts must be in the name of AFS-USA (NOT in the name of the Team or an individual) and must be linked to the Tax Identification number of AFS-USA.
- Each and every bank account that is used in connection with AFS-USA and its programs and participants MUST be disclosed to finance staff.