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Good Business Practices for Student Organization Leaders

Student organizations exist and have the ability to fund raise and solicit donations because they
are a fundamental part of the programmatic aspects of the Institute as a whole. Student
organizations that are recognized by MIT are given the autonomy and responsibility to spend
their funds as the organization sees fit (providing they do not break Institute policy, Federal or
State law.)

It should be noted, however, that all student organization funds are Institute funds, authorized for
particular student activities, and cannot be deposited in non-MIT accounts. This includes those
funds granted for use by the Institute to student organizations on an annual basis, funds that have
been raised by the respective student organizations as a result of individual fundraising efforts,
fees that may have been charged for membership, revenue received from running organized
events and through any other means. These funds are to be used by student organizations and
their students while at the Institute, and only for approved MIT educational and related purposes.
They are not to be used for non-MIT activities.

In addition to the information about accessing your accounts that the Student Activities Finance
Office has given you in today’s training, some tips for you as organizational leaders, are as
follows. We realize that some of this information may seem like common sense, however, we
believe it is very valuable information for you to share with your group’s officers.

1. Look at the organizational structure of your student organization and ensure that there are
checks and balances in your system, particularly around your organization’s finances – if
they are not there, create them! Systems where all the authority/responsibility are in the
hands of one or two people are not healthy for anybody, even if you trust those people
wholeheartedly! Remember those two people may not always be available.

2. Sit down as an organization and plan your semester/yearly budget. Determine what
expenses the group agrees are allowable and what can be at the discretion of the financial
signatories or treasurer. Make sure you have enough money to do what you, as an
organization, want to do. If you don’t, start fundraising! Fundraising should begin before
your events and never after.

3. Keep all financial records in a secure place. The president or chair should require regular
reporting and conduct random auditing of the system and/or sit down regularly with the
treasurer to go over how things are recorded and to ensure that the finances make sense.

4. While groups are currently allowed up to 6 financial signatories, treasurers should be
aware of all financial transactions done by any financial signatory. Treasurers should be
checking account balances and transactions regularly to ensure that they are accurate and
that all transactions have been done correctly. Some expenses may already be set for
automatically billing to your account (IP addresses, CAC charges, telephone charges,
etc.) and you want to make sure they are accurate and expected.

1 of 2 updated by SAFO 7/31/03

Students may NOT sign contracts on behalf of their group (and thereby. This could be construed as embezzlement of Institute funds. Never forge someone’s name simply because you can’t find them. Leave good records for your new treasurer! It would be helpful to introduce them to administrators and vendors that you commonly work with to help them establish working relationships. This compromises your own integrity as well as the integrity of your group. 2 of 2 updated by SAFO 7/31/03 . for future reference. It is against Institute policy for an organization to open a bank account with an independent bank using MIT’s name or tax ID number. if you are grocery shopping for your group’s BBQ and want to do your own food shopping at the same time. 12.g. MIT). The 2 Program Coordinators for Student Activities are available to advise and help students in their major event planning efforts. or because it is less time consuming. keep that paperwork separate for good record keeping. keep your personal transactions separate from your business transactions even if it seems easier (or cheaper) to do it at the same time. please allow two weeks or more for this process. Don’t say something is a “business dinner” and submit the receipt for reimbursement if it is not actually club/organization business. Whenever possible. This could get you into serious trouble later! 10. When you are stepping down as treasurer of your organization. These forms may be used when conducting student organization business only! 13. This protects both the organization as well as the individual from ever being called into question about a particular reimbursement. When purchasing supplies or materials for organizational use you should present the cashier or vendor with an MIT Tax Exempt Form (these are available on-line and in W20-549). MIT is a non-profit organization and as such is tax-exempt. be sure to reconcile your ticket sale revenue with the number of tickets sold. Please note that all contracts for events or programs on or off-campus should be processed through the Student Activities Office and require a Purchase Order (or in some cases Institute check) for payment. Never use your own SSN to open an outside account and do not ever deposit organization money into your own personal account.) 7. 9. spend some time with the incoming person and train him/her on the system. 8. Do not allow a financial signatory to sign off on his/her own reimbursement no matter how much you trust them. Also all donations intended for your student group should be made payable by check directly to your student group and never to an individual. and for accurate reporting when paying an individual for a service. 5. If you are selling tickets to an event. (e. rather. As treasurer. 6. Do not abuse the system no matter how tempting it may be! If your roommate is “short” this month. Do not pay a performer directly out of the ticket revenues. 11. don’t pay for his textbook and tell him he can pay the organization back. ring them up separately to keep the records clean.