Good Fiscal Governance and Avoiding ( or if that doesn ’ t work , preparing for ) an IRS Audit
Checklist of records to be maintained
1 . Articles of Incorporation ( copy of an approved original can be obtained from the Pennsylvania Corporation Bureau )
2 . Legal advertising of the filing of the Articles of Incorporation
3 . IRS Tax Identification Number Notice and copy of original Form SS-4 Application for a EIN
4 . IRS Tax Exemption Letter ( a copy or replacement can be obtained from the IRS )
5 . Constitution and Bylaws showing dates of approval by the society or district
6 . Resolutions showing who has authority to sign checks or make electronic payments or transfers and for how much
7 . Policies and procedures ( Employee Handbook , organizational procedures )
8 . Employee files ( resume , original application , salary history , vacation and sick days , accumulated if allowed and those taken )
9 . Vendor / Independent Contractor files with evidence supporting their independent contractor status — this is needed for both tax and workers compensation insurance purposes
10 . Retirement plan , investment advisor and bank records related to the plan
11 . Board Meeting Minutes ( should show which board members were present and if any abstained because of a conflict of interest )
12 . Board Conflict of Interest Statements ( executed )
13 . List of Board Members ( past and present )
14 . Financial Statements if prepared . Even if there are no audited statements , annual financial statements should be given to the district or local ’ s members . This could just be a listing of total receipts ( membership dues , etc .) and major expense categories , net income or loss and balance on hand in the bank account . If the district or local society owns depreciable property , the bookkeeping is likely to require the assistance of an outside accountant and require more detail for the tax returns and reports to members .
15 . Leases 16 . Debt ( loans , mortgages , line of credit , etc .) 17 . Deeds 18 . Significant Contracts ( service , purchase , sale , etc .) 19 . Grant Agreements 20 . Bank and Investment Statements
21 . Insurance Policies ( liability , property , fidelity , workers compensation )
22 . Tax Returns 23 . Invoices 24 . Receipts ( deposits ) 25 . Membership applications
26 . Membership lists , with office and home addresses , email , fax and even spouses ’ names if they are routinely included in the district or local ’ s social activities
27 . Newsletters , if any
While originals of deeds , significant contracts and other important documents should be kept , a copy of the signed documents ( tax returns should be first signed and then copied ) will suffice for audit and other purposes . The above items should be scanned and saved on a CD-ROM or DVD with a backup put in a safe place such as safety deposit box . Staples , OfficeMax , Kinkos and other vendors offer scanning services if the district or local society does not own a scanner equal to the task .
A copy of the parliamentary authority referenced in the Bylaws such as Sturgis or Roberts ’ Rules of Order should be available for the district or local ’ s parliamentarian .
44 November / December 2010 • Pennsylvania Dental Journal