Financial Policy

2.1 Definition and Scope

• Restricted funds are those revenues advanced to and accepted by ASEE with the stipulation that they be used exclusively for the accomplishment of specific objectives.Various government and privately sponsored programs and endowed and sponsored awards are included in this category.
• Restricted funds are unavailable for any use other than that for which they have been advanced.All direct and overhead expenses incurred by ASEE in fulfilling the purposes of these activities are reimbursed out of these funds.
• Upon fulfilling specified objectives, and pursuant to any stipulations in the original agreement with the sponsor, any remaining balance shall be returned to the sponsor, including the remaining balance of any interest earned on resident cash during the period of the funded program.If the return of a remaining balance and/or interest is not specified in the original agreement with a sponsor, those funds shall become part of the general assets of ASEE upon completion of the program objectives.
• The Executive Director has the authority and responsibility to ensure adequate cash capacity for restricted programs, projects, and awards.Should all reasonable and timely efforts to secure the required and agreed upon funds from the sponsor fail, the Executive Director can hold all related activity in abeyance until adequate funds are made available.

3.1Definition and Scope

• Unrestricted funds include all revenues that are not specifically restricted as to their use. Unrestricted funds include income from dues, publication sales, advertising sales, conference fees, mailing label sales, interest income from unrestricted funds, fees obtained in the execution of externally funded projects, and contributions.
• Overhead recovery received in connection with execution of grants, contracts, sponsored projects, programs and/or awards is pooled with unrestricted funds for the purpose of covering ASEE expenses.

3.2 Banking and Accounting Services System (BASS)

• The ASEE Board of Directors has established a headquarters-administered Banking and Accounting Services System (BASS) for all ASEE units.BASS Accounts hold ASEE funds designated for availability to specified ASEE units. Unlike the operating budget (discussed below) of ASEE, the year-end balances in BASS accounts are carried over to the subsequent fiscal year.
• The Board of Directors of the American Society for Engineering Education, a non-profit corporation, must file income tax returns which accurately represent the income, assets, and liabilities of ASEE. Therefore, for purposes of IRS and ASEE audits, and as a useful service to the membership, any funds earned by a unit of ASEE must be deposited in an appropriate BASS account, unless an explicit exemption is approved annually by the ASEE Board of Directors.
• Division dues income is deposited directly into the appropriate BASS account as it is received.
• Interest shall be credited to each BASS account at 90% of the rate earned by ASEE Money Market Fund during the quarter and shall be credited quarterly.The remaining 10% shall be used to defray administrative expenses.

3.3 Board-Designated Funds
The Board of Directors of ASEE may, at its discretion, designate the use of specific ASEE funds to pay expenses attributable to a particular activity for a specified period of time.Any such designated funds remaining at the end of that period of time, or at the end of that particular activity, which ever first occurs, shall revert to the general assets of ASEE.If any of the designated funds are restricted, then procedures of 12.4C shall be followed for those funds.

4.1 Organization and Responsibilities

• The ASEE Board of Directors authorizes the Executive Director, with the informed advice and consent of the Finance Committee, to manage the investments of ASEE within bounds of approved investment policy.
• The Finance Committee shall monitor the investment program and counsel appropriate courses of action.
• The Executive Director and Finance Committee shall always exercise the judgment, care, discretion and intelligence in the management of ASEE investments with due regard to the balance of potential income versus the potential risk to ASEE's financial well-being.

4.2 Short-Term Investments

• All funds not immediately needed for expenses and cash-flow maintenance during the fiscal year will be invested in short-term instruments such as Certificates of Deposit, Treasury Bills, and Commercial Paper.
• The short-term investment decisions will be the responsibility of the Executive Director in continuing consultation with the Finance Committee, the financial organizations involved, and, if needed, an investment counselor.

4.3 Long-term Investments

• Subsequent to the completion of the annual audit report of ASEE accounts,the Executive Director shall analyze, determine, and report to the Finance Committee what portion of the working fund, if any, can be utilized for the purchase of long-term investments.Recommendations will be made only after thorough analysis of the previous year's investment decisions and close examination of the projected budget for the current year.
• If any of the working fund can be invested, the Executive Director shall recommend a specific long-term investment for Finance Committee approval.
• Long-term equity investments, that will be considered if funds are available, may include Preferred and/or Common Stocks, Treasury Bonds, Mutual Funds, and Bonds.

4.4 Limits and Controls

• The Executive Director shall report on the performance of all ASEE investments to the ASEE Finance Committee.
• All investment actions taken by the Finance Committee shall be reported at the next subsequent meeting of the Executive Committee or the Board of Directors.
• The purpose for this policy is to protect ASEE from becoming insolvent and to provide growth in the financial base of the organization to support future activities

5.1 Equipment Assets
Any piece of equipment valued at $1,000 or more and having an expected lifetime of greater than one year shall be considered part of the capital assets of ASEE.

5.2 Depreciation of Capital Equipment
Capital Equipment shall be depreciated across its expected useful life-span according to generally accepted accounting practices, thereby matching the cost of an asset to the periods in which it is used.

6.1 Definition and Scope
ASEE shall maintain selected investment accounts, the sum of which shall constitute a reserve surplus fund.

6.2 Goal
It is a goal of the Board of Directors that ASEE reserves equal approximately30%
of the annual unrestricted operating budget.

7.1 Status of Dues Income

• All ASEE dues shall be received as unrestricted general funds.
• Division dues shall be credited to BASS accounts on a quarterly basis.

7.2 Dues Billing Cycle
Members shall normally be billed annually for ASEE dues.As set forth in ASEE Constitution, failure to remit dues within three months after the anniversary date shall place the member in arrears and cause the member to be dropped from the active member roster.

8.1 Publication Sales, Subscriptions, Advertising, and Mailing Labels
The Executive Director shall establish the selling price for all ASEE publications and for all advertising and mailing labels, including any appropriate discount schedule for quantity sales.

8.2 Conference, Workshop, and Seminar Fees

• Conference, workshop and seminar financial policies are the concern of the Finance Committee, subject to review by the Executive Committee and approval by the Board of Directors.The Executive Director is delegated the authority to set fee structures for all such activities to ensure that all direct and indirect expenses are recovered.
• Registration and all other fees related to the Annual Conference shall be set by the Board of Directors upon the recommendation of the Executive Director, approval of the Finance Committee, and advice of the Annual Conference Committee.

8.3 Revenue Sharing with Field Units
All services should be self-supporting, including indirect and overhead expenses.Agreements for the sharing of conference, workshop, and publication sales proceeds between ASEE and the field units involved must be approved in advance by the Finance Committee.

8.4 Investment Income
ASEE, under the management of the Executive Director and guidance of the Finance Committee, derives unrestricted income from investing excess cash.

8.5 Grants and Contracts

• ASEE may apply for and receive government, corporate, foundation, and private grants and contracts to carry out activities in relation to its tax exempt purposes.
• All grant or contract agreements between ASEE and external funding sources must include provisions for the recovery of direct and indirect expenses, unless otherwise authorized by the Board of Directors.

8.6 Charitable Contributions

• By virtue of its 501(c)(3) tax status, ASEE may receive tax deductible contributions.ASEE shall actively solicit contributions that can be accepted for specific purposes or can be applied as unrestricted funds for the use of continuing ASEE operations.
• Unless otherwise agreed in advance, when charitable contributions have been restricted to a particular purpose and that purpose has been satisfied, any and all fund balances become part of the general unrestricted funds of ASEE.
• All currently held contributions for which there are no enabling documents, or where the enabling documents are silent on disposition of funds at the conclusion of the supported activity, shall be regarded as having no stipulation on the use of any remaining balance and said balance shall become a part of the general funds of ASEE.

9.1 General Policy
An ASEE endowment can be established for any purpose (restrictive or non-restrictive) that is funded in perpetuity by the earnings of a restricted ASEE investment, with the corpus of the investment reserved for purposes specified in the endowment agreement.The corpus can be directed to other purposes only when the original intent of the endowment is no longer consistent with ASEE goals.The corpus funds from all endowments shall be held in a consolidated endowment fund, for efficient management purposes, with shares of that fund allocated pro-rata to the various endowments.

• Endowments are encouraged, but must be approved by the appropriate oversight committee (for example, Awards Policy Committee for endowed awards), Finance Committee and the Board of Directors.
• In the case of restricted use endowments, such as awards, the principle of the endowment must be adequate to return all direct and indirect expenses and must be equal to a minimum of twenty (20) times the anticipated annual expenses.A minimum of $40K is required to endow a national award.
• Endowments to support national awards may be created at a level of less than= $40K, but no awards shall be made from said endowment until the corpus has risen, due to re-investment of earnings, to $40K.
• National awards established prior to June 1991 without proper enabling documents and with less than $40K in the endowment corpus may be suspended until the corpus attains $40K or may be commingled to establish a single corpus with at least $40K.

9.2 The Corpus of an Endowment
The primary purpose of the corpus of an endowment is to generate sufficient income to execute the award or activity.Additionally, income from the corpus is used to cover the expense and administration of the award.ASEE awards or activity endowments established in perpetuity are subject to adjustments in award amounts or frequency or change in activity budgeting depending on the realized return on investment.

9.3 Endowment of National Awards
No capital sum shall be accepted by ASEE without the stipulation that jurisdiction over the selection and review of the nominees, the selection of the recipient, design and specification of mementos of recognition, and all rights of administration will rest with ASEE.

9.4 Direct Award Expenses and Administration Fees
Part of the income from the endowment for any award shall be used for fund management and ASEE administration.An administrative fee, determined by the Executive Director and approved by the Executive Committee, shall be contributed annually from the income of each award endowment toward these and other costs of running the awards program.

9.5 Limits and Controls

• In addition to an annual financial review, the nature and focus of all awards shall be reviewed on a ten-year cycle.
• In any year when adequate funds are not available from income, an award or activity can be held in abeyance by the Executive Committee of the ASEE Board of Directors.
• If the current award balance is less than the initial funding on October 1 of each year, ASEE will contribute half of the difference (current balance less initial funding) to the award. If the current award balance is greater than the initial funding on October 1, ASEE will recover expenses by using the formulae; 20% of (initial funding-(current balance-expenses).

10.1 Definition and Scope
An externally sponsored award or activity is one whose expenses, including overhead, are wholly or partially underwritten by funds supplied from external sources.

10.2 Sponsor Commitments

• Grantor commitment to a sponsored national award must be made for at least four years.
• The agreement with the grantor shall include provisions for a stipend of reasonable value, administrative expenses, and support of awardee travel expenses to the awards presentation at the Annual Conference.
• The preferred method of supporting recipient travel expenses is through a fixed grant for travel, rather than by a reimbursement of travel expenses to the awards presentation at the Annual Conference.

10.3 Limits and Controls

• The Board of Directors may discontinue, or the Executive Director may suspend any sponsored award or activity for which agreed-upon funds are not forthcoming in a timely manner.
• Award sponsors are billed at a time agreed between the donor and the Executive Director.

• The Board of Directors of ASEE and its designees have the sole legal right to authorize, direct, and discontinue any activity purporting to be that of ASEE and using its reputation or intangible assets.
• ASEE headquarters must be provided with specific information on all bank accounts involving activities carried on in its name or using any of its intangible assets.To obtain and retain all needed information on those activities, all such financial activity should flow through the ASEE accounting system. Any bank accounts maintained at locations other than headquarters must be specifically authorized each year by the Finance Committee of the Board of Directors. For Divisions, Sections, or Councils with income, expenses, or accounts not maintained at headquarters:
  • If payments are made to any entity in excess of $600 per year, it must be reported to headquarters by January 15 of each year, so ASEE can file IRS Form 1099 with the IRS and the individual for tax reporting purposes;
  • Honoraria (but not prizes or awards) should be approved by the Board (or its delegate) if any individual is to receive $5,000 or more, in any year;
  • Third party agreements with banks should be executed authorizing ASEE's Executive Director or his designee to be a signatory on any account;
  • In situations where a government contract is involved, or third party sponsorship is financially significant, ASEE should be in complete control of all receipts and disbursements for a project, convention or seminar sponsored by a Section, Division, or Council.
  • A reasonably detailed financial statement should be rendered within 30 days after the fiscal year end to enable ASEE to use the financial data for reporting to IRS, supplementing a quarterly summary of much of the same information;
  • A proposed budget for the next year should be submitted to headquarters showing expected expenditures, contracts, vendors and revenue sources;
  • A conflicts statement should be submitted disclosing any duality of financial interests of ASEE members with vendors or sponsors which have conflicts. Regardless of size considerations, any new contracts for goods, services or facilities creating a potential liability should be sent to ASEE inadvance of its execution so that a disclaimer of ASEE liability can be added as an addendum.Copies of all other executed contracts which purport to bind ASEE (or a Division, Section or Council) where ASEE may still have some corporate liability must be submitted to Headquarters for review and approval.

11.1 Zone Operating Budgets

• Zone annual operating budgets must be used for activities which promote the mission and vision of ASEE. Budgets may be used by the zone chairs to pay expenses associated with convening executive board meetings within their respective zones including expenses associated with member travel.
• Zone annual operating accounts shall not be used for personnel expenses of any kind without prior approval of the Vice President of Finance, or the expenses of any publication which is sold or in which advertising space is sold, or in any way which is imprudent or in violation of law, or of commonly accepted business and professional ethics.

11.2 Section Operating Budgets

The ASEE Board of Directors has established an annual allocation of funds to help support Section activities. The allocation is awarded each year on October 1, the beginning of the Society fiscal year. Each of the twelve geographic sections shall receive an annual allocation based on the formula: $550 plus $1.00 per full duespaying, individual section member. The membership count of each section will be determined by Headquarters as of March 31 of the previous fiscal year. Beyond the allocation from the Board of Directors, Sections are expected to be selfsustaining. Income may be generated by meeting registration fees, publication sales and/or contributions. In no case may a Section derive income by direct assessment of dues to its membership.

• The $550 portion of the annual allocation will be made to the Section Operating account and be available for use on October 1, the beginning of the ASEE fiscal year.
• Annual operating budgets must be used for activities which promote the mission and vision of ASEE.
• Annual operating accounts shall not be used for personnel expenses of any kind without prior approval of the Vice President of Finance, or for member travel or registration connected with the ASEE Annual Conference, or the expenses of any publication which is sold or in which advertising space is sold, or in any way which is imprudent or in violation of law, or of commonly accepted business and professional ethics.
• Any unused balance in an operating budget at the end of the fiscal year reverts to the general fund and may not be carried over into the subsequent fiscal year.
• Unless an error has been made by the ASEE headquarters staff in posting, funds and/or expense charges cannot be transferred between an operating budget and a BASS account.

11.3 Institutional Council/Division Operating Budgets

• On an annual basis Councils and Divisions may request that ASEE provide funds to cover specific operating expenses for the fiscal year.
• Annual operating budgets must be used for activities which promote the mission and vision of ASEE.
• Annual operating accounts shall not be used for personnel expenses of any kind without prior approval of the Vice President of Finance, or for member travel or registration connected with the ASEE Annual Conference,or the expenses of any publication which is sold or in which advertising space is sold, or in any way which is imprudent or in violation of law, or of commonly accepted business and professional ethics.
• The Board of Directors will act on Council and Division budget requests, and the Executive Director will notify each unit of its allocation.
• Any unused balance in an operating budget at the end of the fiscal year reverts to the general fund and may not be carried over into the subsequent fiscal year.
• Unless an error has been made by the ASEE headquarters staff in posting, funds and/or expense charges cannot be transferred between an operating budget and a BASS account.

11.4 Banking and Accounting Services System (BASS)

• Each field unit may request that ASEE establish a BASS account.The size, complexity and use of such a BASS account will vary according to the activities of the field unit.The BASS account can be used as a continuing fund for the purpose of developing new products and services for members.
• The Banking and Accounting Services System provides an interest bearing checking account service to Sections, Councils, and Divisions.Interest is credited quarterly at a rate of 90% of that earned by ASEE.
• The ASEE Business Office will credit all field unit income received and honor authorized check requests up to the amount of the remaining balance. BASS accounts cannot be overdrawn.
• Field units are financially responsible for all membership services they provide, including travel, newsletters, general administration, etc.Their activities should be outlined in their annual business plan and budget.During the annual budget cycle, field units may request operating budget support for activities which are beyond the unit's BASS account resources.
• To ensure that BASS account funds are used for purposes consistent with ASEE goals, the BASS account may be discontinued with the funds reverting to ASEE's General Fund.BASS Account funds may revert if it is determined either that the unit is not using the fund to develop membership services or if the funds are needed by ASEE to ensure its continued viability.

11.5 External Bank Accounts

• The authority for any ASEE unit to establish bank accounts resides with the Finance Committee.All funds received on behalf of ASEE, by any unit of ASEE, must be deposited in an account approved by the Finance Committee.
• Any ASEE unit wishing to use ASEE's IRS uniform employer identification number for any purpose must have the annual approval of the Finance Committee.
• No ASEE unit should apply for separate exemption from Federal income tax.If any unit is requested to do so by the Internal Revenue Service, the Executive Director should be notified at once.The Executive Director will communicate with the IRS and advise the unit of its status.
• By virtue of its incorporation, ASEE generally provides corporate rather than personal liability for failed or flawed transactions, or financial responsibility in the event of insolvency.However, failure to adhere to financial policy regarding such activities/responsibilities as external bank accounts, or tax exempt status, or use of the IRS uniform employer identification number, may result in personal liability of the responsible individual for any claims against ASEE.

11.6 Dues Income

• Pursuant to Article VIII, Section 4 of the ASEE By-Laws, Divisions and Constituent Committees may establish a dues structure for their members.All such dues are payable to Headquarters through the annual billing process and shall be credited to the Division/Constituent Committee BASS account.
• Any establishment or change in the dues for a Division or Constituent Committee must receive prior approval from the Board of Directors.
• Since Sections receive an annual membership-based allocation from the general funds of ASEE, they are prohibited from charging dues or assessing any fee for membership.

11.7 Non-Dues Income

• General Policy
  • To keep membership dues to an affordable level while simultaneously expanding services and capabilities, field units are encouraged to develop non-dues income streams through activities that are appropriate to the mission of ASEE, following the guidelines set forth in this section on Field Unit Finances (Financial Policy11)
  • The Board of Directors delegates to the Executive Director all
    responsibility for allocating overhead and indirect cost recovery and for monitoring all unrelated business income.The potential tax liability for unrelated business income (such as advertising revenue) requires close scrutiny in appropriately allocating indirect costs to government and non-government sources.
  • The Chairs of field units that sell advertising in their publications are responsible for an accurate allocation of publication costs between advertising and editorial expenses.This allocation must be reported annually to ASEE Headquarters in a form adequate to allow external audit.
• Income from ASEE Annual Conference ticketed events
  • Unless the ASEE Board of Directors otherwise authorizes in specific cases, all income from annual conference ticketed events is applied toward the relevant conference expense.Any surplus becomes part of the general operating funds of ASEE.
  • Where the ASEE Board of Directors authorizes an ASEE field unit to realize income from an annual conference ticketed event, this income shall be credited to the appropriate BASS account only after all related expenses have been deducted.
• Income from Field Unit Conferences
  • Field units are encouraged to realize a moderate net income from conferences, workshops, etc.Unless otherwise approved by the Finance Committee, income and expenses for these efforts must flow through the respective unit's BASS account both for accounting purposes and as a means to carry-over any surplus to maintain or increase the unit's member services.
• Mailing Labels Sales
  • ASEE may realize income from the sale of membership mailing labels and may regulate or deny the use of such lists for purposes unrelated to advancing engineering education.
  • Field units are prohibited from selling mailing lists of their members unless explicit approval is granted annually by the Board of Directors.
• Fund-Raising by Field Units
  • Because of the delicate nature of raising funds from external sources by field units of ASEE, the need for coordination is paramount.The Vice President for Finance shall be consulted in advance of any effort by an ASEE field unit to solicit external financial support on behalf of that unit.

16.1 General Policy

A. Conflict of interest is defined as any situation in which an individual's decisions, actions, or votes could materially affect that individual's financial, business, or professional interests.It is the responsibility of all ASEE staff, members, and officers to consider each item of business where they have a vote, action, responsibility, or decision authority to determine if a conflict of interest, or the appearance of such conflict of interest, may exist.Any such recognized potential conflict shall be made known immediately to the person in charge of the activity (or the next higher authority if that individual is in charge), who, after consultation with the Executive Director, will advise the member of the proper course of action and cause a notation of the action to be entered in the activity's record.

B. In the case of a director or other principle of the organization, a fulldisclosure of any actual or apparent conflict of interest will be made generally known, and the individual concerned will be recused from all involvement in the matter (which means that the individual will not be present when discussions of the subject are held, votes are cast, or business decisions are made).

16.2 Suppliers Holding Membership

Any individual member or representative or employee of an institutional member of ASEE who is a supplier or potential supplier of goods or services to ASEE is in a position of potential conflict of interest with respect to the provision of such goods or services.