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  • Setting up a pack bank account

    Hi,
    I am an adult volunteer in a small pack in SC. We were formed in November 2001, so I guess we are about one year old. We currently
    have 18 scouts total. (tiger cubs, bobcats, wolves).

    Anyway, when we got together last year (9 scouts) we had missed the popcorn sales. We really did not have any funds other than parent donations. We lived "hand to mouth".

    This year, our small band really got out there and sold that popcorn.
    We are going to have a "small fortune" to manage. I have been ask to set up a pack bank account.

    I have been to several banks. The accounts are about the same. The question concerns the Tax id number. No bank will set up an account without a tax id number.

    The bank(s) say I need the tax id number of the BSA. The local council
    says I should use the tax id number of the church that sponsors the pack.

    Have any of you been here before?

    I would appreciate any advice of this matter or ideas about pack bank accounts in general.

    Thanks

  • #2
    Thought that there was a BSA national number that was available for general usage, but difficult(!) to come by. Probably easiest to use your COs tax ID number; just don't use the tax exemptions available to complicate their lives.
    Whatever you do, don't use the SSN of your Treasurer; creates a perpetual pain to keep it updated
    Remember that you are building for the future; keep the books simple and straight, your Pack funds separate from anything else, and perhaps multiple signature authority on the big expenditures. Kinda nice if your CM can stay off the signature card; sends a good clear message to all concerned as well(This message has been edited by buffalo2)

    Comment


    • #3
      Concerning tax ID numbers, using the chartered organization's ID number is probably the correct answer. To tell the truth I don't know what we currently use in our troop. When we lived in Southern California we were directed by the council to use the council's number for everything. Go figure.

      It may be that your sponsoring local congregation or church may not have its own ID number, if it is part of a larger organization. For example, I have never inquired, but I suspect that local Roman Catholic parishes do not have their own numbers, but use the number of their diocese. If you are confronted with this kind of situation and the local church does not have the authority to provide than kind of information, then the council should be more cooperative.

      Can you provide some more information about the nature of your chartered organization?

      Comment


      • #4
        I'm sure I can get the church id. We are sponsered by a small Baptist church. Although I am not a member of this particular church, I am on the finance committee of another Baptist church in the area. I know they have a tax id.

        It just concerned me that people at two different banks believed that I should be using the BSA number. The banks did not say that they would not open the account, they simply questioned it.

        My problem is that our local council has one phone number. The same person answers that phone every day. This is the person that is telling me to use the church id.

        I was hoping to hear this info from an independent source.

        I have contacted several other troops in the area, but they have all existed for a long time. The pack accounts were already in place when the current leadership took over.
        Nobody seems to really know.

        I'm not trying to make this harder than it should be, but I want to do it right.

        Anyway, thanks for your replies.

        Comment


        • #5
          Don't expect folks outside of scouting to know how scouting is structured. Even a lot of long time volunteers don't understand that the unit belongs to the chartered organization not to the BSA. The program is the BSA's but not the unit. You should be using the church's ID#.

          Bob White

          Comment


          • #6
            When I was pack treasurer, accounts were established using the chartered organization's tax ID (church in our case). Any funds of the pack, troop, etc. are technically property of the chartering organization - should your pack fold, all pack property and funds revert to the chartering organization (Bob White, correct me here if I'm wrong).

            Two different directions to take in establishing the account:

            1. Establish the account with a church official as the primary signator. Have authorized users from the pack (either single signature required for checks or two, depending on how you wish to operate) Reason for a church official (church treasurer for example) as primary is that there is usually an infrequent turnover of people in this position - this way there is a consistent person to make changes to the account such as changing names of authorized users. This can be a disadvantage though, if this person is difficult to get in contact with.

            2. Establish the account with a pack official as the primary signator (this could be the treasurer), with additional authorized users as appropriate. The only disadvantage here is that if your primary signator leaves without making proper changes to the account, you might have trouble making the changes without him/her. Make sure that all names/users are kept current.

            Some other thoughts:
            - Who and how many sign checks needs to be tailored to your operation.
            - Treasurer maintains possession of the checkbook at all times.
            - Require receipts/documentation or approval as established by the committee for all disbursements.
            - Establish which disbursements can be made by the treasurer without prior approval and which type/$amount of disbursements require prior approval.
            - Have a treasurer's report and records available at all regular committee meetings.
            - Treasurer needs to keep thorough records; there is a fiduciary duty that comes with this position.
            - Audits are up to your organization. I recommend that at an annual audit be performed by another committee member as assigned or by someone outside the pack. (A local accountant may do this for no cost if you ask or the CO's treasurer) An audit should always be conducted when treasurers change.
            - While rules are needed, don't tie the hands of the treasurer or pack so tightly that getting anything accomplished requires an act of God.

            Hope this provides some assistance.

            Comment


            • #7
              Great tips Eagle74!

              Comment


              • #8
                All of the above is excellent advice. I particularly like the idea of having some senior signatory from the chartered organization on the account. I have run into the problem described by Eagle74 when we had a sudden and complete turnover in pack leadership. I had to track some people down to get signatures on the proper documents to satisfy the bank that the change in signatories was legitimate.

                Banks are important fiduciaries and have to follow the rules that are there to protect all depositors.

                Having dual signature control is an option, and one that I personally recommend. If you are going to do this, you need at least three names on the signature card. In other threads in this forum various posters have described problems with control of money. One common aspect of all these complaints was the fact that only one person was on the bank account, or there was no unit bank account at all.

                One thing that was not mentioned was having a receipt book available. When I was a pack treasurer, people would come up to me at pack meetings and hand me cash, not checks, for various things. I bought a receipt book that made copies just so I could keep track of what all the money was for.

                Comment


                • #9
                  Thank you all for your advice and comments.
                  I believe I am ready to proceed with this task.

                  Thanks again.

                  Comment


                  • #10
                    Also, especially for a pack, don't forget that you can set up an UDA (Unit Debit Account??) at your council office. Your pack can deposit money with council and then essentially use a debit card to purchase badges, books, etc. We only have two people who can write checks but we have about five or six who can use the UDA account.

                    Comment


                    • #11
                      All scout units should have a checking account, and many also have a savigns account. Usually there is at least one account at your local council service center and some councils keep two accounts (one for Scout Shop & Events and a seperate one for registration).

                      A Unit Treasurer should be aware of all of these accounts. It is important to keep both your banks & the council office informed on who are the authorized people to use those accounts.

                      A good guide for all units is the Unit Budget Plan, this is a flyer that usually comes to the unit once a year with your recharter packet.

                      On the matter of the Employer Identification Number. After the enactment of the Patriot Act, all banks MUST have a EIN number for the account. Where a bank official may ask you to go to the Scout Office, your local council's EIN number is NOT the one you need.

                      All scout units are chartered by their Chartering Organization and, in fact owned by them. Whether you are chartered by a church, labor union, or the local Lions Club they need to provide you with their EIN number for the purposes of opening a checking account. Some Chartering Organizations (the Mormon Church comes to mind) have specific policies that do not allow for their units to operate an independent checking account, so be sure to check with your Chartered Organization Representative for your unit on what to do about this.

                      Some units are chartered by groups like "Friends of Pack So & So" and those types of chartering organizations are not likely to posess their own EIN number. It is possible for a Pack or Troop to go directly to the IRS and get an EIN number. This is a quick and painless process. In fact, if you can get through the IRS on-line session, you are issued a EIN number immediately.

                      Visit: http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

                      For most units, that will be the end of it, but in later years if your Pack becomes one giant popcorn fundraising machine, and you get over $10,000 flowing through your checking account in a year, there may be some additional reporting that the Pack Treasurer must do if you go the route of getting your own EIN number for a unit.

                      Let me hasten to add that this process is only about getting an EIN number. This has nothing to do with becoming a Non-Profit organization. The steps to become an IRS 501 (c) 3 entity are far more difficult and very very few scout units have ever gone that route.

                      YIS,


                      Ed Henderson
                      Webmaster - SCOUTER.com
                      Board Member - U.S. Scouting Service Project @ usscouts.org

                      Comment


                      • #12
                        Help! My Cub Scout Pack is in this situation where we are chartered through the "Parents of ..." the local elementary school and we do not have an EIN. Once we have an EIN, I'm assuming that we will have to pay taxes (CA has a minimum tax payment of around $800) unless we file for non-profit status. Based on this assumption, we've been pursuing becoming a tax-exempt organization. I'd appreciate some guidance as to the best course of action and the pros/cons of going non-profit.

                        Some additional information: We meet at the elementary school and were told that it is illegal to use the PTA's tax id. We usually have about 80-90 scouts each year and have been approached by parents who want to make a financial donation to the Pack. Our dues will be $65 per scout next year ($45 for siblings). We also solicit donations for various activities from local businesses.

                        Comment


                        • #13
                          Welcome to the forums! While the laws may vary from state-to-state, I used to set up accounts when I organized professional meetings. The banks would allow me to set up a non-interest-bearing account that was merely used to collect and disburse funds for that particular meeting. No tax ID was required. I don't know if you have access to something like this or not but I didn't have to pay taxes or do much else other than fill out the bank's paperwork.

                          Another option might be to go to online banking. They may be more flexible than banks in your area.
                          Evmori, on these forums, is a banker. He might offer other options for you as well.
                          Good luck.

                          Edited part: I'm curious about your chartering organization. What's the difference between the PTO and the Parents of...? Does BSA allow chartering organizations that have no real legal status (i.e., a tax ID number)?(This message has been edited by packsaddle)

                          Comment


                          • #14
                            "We usually have about 80-90 scouts each year and have been approached by parents who want to make a financial donation to the Pack. Our dues will be $65 per scout next year ($45 for siblings). We also solicit donations for various activities from local businesses."

                            Odds are, all of the people and businesses who give your Pack donations will be expecting to be able to declare those donations on their tax return. Unless you are able to give them your ID # they can not use it as a charitable donation, and they will most likely be a bit upset at your organization.

                            As a corporation you MUST declare these donations as income and pay Federal income tax (state tax laws vary). Being a non-profit would help with this.

                            There are fees that your CO would have to pay, along with the paperwork, but, in my opinion, being a federally recognized not for profit is much better than being a for profit, or getting in trouble with the IRS.


                            "We meet at the elementary school and were told that it is illegal to use the PTA's tax id."

                            Of course it's illegal to use the PTA's tax ID. The PTA is not legaly connected to your Pack in any way at all. Your Pack is owned by the group - Parents of Pack #000. Heck, I shop at Jewel a couple times a week, does that make it legal for me to use their tax ID?
                            (This message has been edited by ScoutNut)

                            Comment


                            • #15
                              Thank you for the speedy replies. I neglected to mention that we originally thought we were chartered by the PTA until someone did some fact finding, so that is why we thought we could use the PTA's taxid. It doesn't seem to be an issue with the Council that our chartering org is not a real entity. We were told that we could not be chartered by a PTO/PTA because it is illegal (I'm guessing separation of church and state).

                              I have been surfing the internet and ran across the Cape Code council's website on which the following is stated:

                              "Also, units should not apply for their own independent tax exempt status. Article XI of (sic) the BSA Charter and Bylaws states that "Contributions shall be solicited in the name of the Boy Scouts of America only through or by the authority of the Corporation and shall be limited to the National Council or chartered local councils...." Also, the BSA Rules and Regulations vests in each council power to "control the raising and expenditure of all funds for local Scouting work in their jurisdiction.""

                              If I'm understanding the above, we may not be able to directly secure donations even as an independent non-profit due to the BSA bylaws?

                              Also, Mr. Ed Henderson mentioned on 8/10/07 that there are a few Packs or Troops that have become independent non-profits. Would anyone have an e-mail for these groups as I would like to pick their brain about the process and requirements?(This message has been edited by scoutmoon)(This message has been edited by scoutmoon)

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