Branches Need to Adhere to Fiduciary Responsibilities

Branches Need to Adhere to Fiduciary Responsibilities
By Jimmy Warden
NAPS Secretary/Treasurer

Over the past months, Ivan, Chuck and I have been attending numerous state conventions and training seminars. It was great to see so many attendees at these venues and hear everyone’s concerns.

One issue I wish to address, unfortunately, was discussed in my July column. The topic of concern is branch finances.

In my July column, I wrote about the requirement for branches to file IRS Form 1099 and its lawful use. While attending state conventions, I had a few members approach me stating they have concerns about their branch not conducting a yearly audit or reporting branch finances at meetings. This is a major concern!

Everyone must realize that membership dues belong to the members of that specific branch for the branch officers to use for specific branch functions. It is not a kitty for one to use at will for whatever reason. Every branch should have a constitution and bylaws that were voted on by members of that specific branch. A branch’s constitution and bylaws cannot conflict with the NAPS Constitution & Bylaws.

A branch constitution and bylaws must stipulate when branch meetings will be held—day(s) and month(s). At a branch meeting, as part of the regular order of business, the treasurer gives their report detailing:

  • the amount brought in since the previous meeting
  • the amount spent since the previous meeting
  • the current balance

The report does not need to have every expense listed individually, but expenses should be readily available should a member ask for that information at the meeting. It also is good practice to have the most recent copy of the bank statement(s).

The statement does not need to be copied and distributed, but should be readily available in comparison to the treasurer’s report. Questions may be asked. When the report is concluded, a motion is made, with a second, to accept the treasurer’s report.

The members attending the meeting then conduct a voice vote to accept or not accept the report. It then is written into the meeting minutes.

If a branch has a financial secretary, the same process occurs pertaining to the branch financials that include investments, etc. Branch members have the right to know the financials of their branch.

Another requirement that should be in the branch constitution and bylaws is every branch must conduct a financial audit at least once a year. The audit should be conducted by the treasurer and two members of the branch who are not on the branch executive board.

Some branches decide to use knowledgeable members from surrounding branches to help with their branch audit, which is acceptable. The results of the audit must be presented at the next branch meeting and shared with the members attending. A motion should be made, with a second, then a voice vote to accept or not accept the audit. These results must be added to the minutes of the meeting.

Branch officers took an oath: “I promise to protect all records, property and funds coming into my custody and to turn them over to my successor when he or she is elected; so help me God.” The misappropriation or embezzlement of branch funds can lead to criminal charges if reported to the proper authorities.

Many of our branches are aware of their fiduciary responsibilities and ensure they adhere to and follow the process. As I said at the beginning of this column, it’s unfortunate I had to write about this topic again. But it’s my responsibility to make our members aware so they don’t unknowingly get into trouble.

Branch presidents should conduct the yearly audit and treasurers and financial secretaries should give your report at every branch meeting. If any uncertainty exists, past NAPS President Brian Wagner offers great training on branch officer duties and responsibilities. He has facilitated this training with many branches and at area and regional training seminars, as well as Zoom meetings. Branch presidents: If you need to train your branch officers, reach out to Brian.

Let us be proactive and not reactive! It just may keep one out of trouble. And remember, increasing membership demonstrates leadership.