Proposed Bylaws Amendment
The following change in the bylaws was approved by the LWV Chicago Board at its February 9, 2021 meeting.
Article IX Financial Administration, Sec 2. Financial Review.
Proposed bylaw amendment:
After a fiscal year end, but before the annual financial report is made available to the members, the President shall arrange to have a financial management review of the League’s books and records by one or more members who are not members of the Board of Directors. The Board of Directors shall establish the general terms of such review, subject to any variations which might be needed in a particular year to address unique situations.
This amendment replaces the following:
The books of the organization shall be reviewed within ninety days after the end of the fiscal year by an independent licensed professional. Whenever there is a change in the Treasurer, an audit shall be done. A report of all reviews and audits shall be sent to the membership.
Reasons for recommending the change:
LWV Chicago’s income is less than $50,000 in general. Audited financial statements are required for nonprofit organizations with budgets in excess of several hundred thousand.
As a C3 organization with income less than $50,000, LWV Chicago is able to file an online postcard tax return.
A professional audit does not, in general, provide security that money will not be misspent or misappropriated, contrary to popular belief.
Using licensed professionals can be expensive.
Budgeting for the service can be difficult in that the audit service takes place after the current treasurer leaves. In some instances the budget has put the expense in the preceding fiscal year, not the year the expense is incurred.
If a treasurer leaves before the end of their term, it becomes an unexpected expense for that year because the bylaw requires an audit whenever the treasurer changes.
A review committee with guidelines for reporting on the financial health of the organization will be better able to analyze expenses and make recommendations for changes since they will be familiar with the organization’s activities.