FINANCES

FINANCE POLICY

Approved by Board of Directors
February 18, 2026

PHILOSOPHY

The purpose of financial management in the operation of all AAOM activities is to fulfill the organization’s mission in the most effective and efficient manner and to remain accountable to stakeholders, including members, donors, partners, funders, and the community. In order to accomplish this, AAOM commits to providing accurate and complete financial data for internal and external use by the Executive Director and the Board of Directors.

AUTHORITY

The Board of Directors is ultimately responsible for the financial management of all activities. The Treasurer is authorized to act on the Board’s behalf on financial matters when action is required in advance of a meeting of the Board of Directors.

  • The Executive Director is responsible for the day-to-day financial management of the organization. The Board authorizes the Executive Director to hire and supervise staff and independent consultants, pay bills, receive funds, and maintain bank accounts.

  • The Executive Director is authorized to approve unbudgeted expenses up to $2,500.

  • The Treasurer is authorized to approve unbudgeted expenses up to $5,000.

  • Unbudgeted expenses for amounts greater than $5,000 shall require the approval of the Executive Committee.

  • The Executive Director is authorized to enter into contracts for activities that have been approved by the Board as a part of budgets or plans.

  • The Executive Director is authorized to manage expenses within the parameters of the overall approved budget and/or the approved budget of individual projects or programs, reporting to the Finance Committee on variances and the reason for these variances.

  • The Board of Directors must approve any use of the board designated cash reserve fund.

  • Submit within two months of expenditure an expense report that includes with it receipts for all transactions to be reimbursed. Per diem and mileage calculations will be based on the published U.S. government rates.

RESPONSIBILITIES

The Executive Director shall, in conjunction with an outside accountant:

  • Account for donor restricted and board designated funds separately from general operating funds, and clearly define the restrictions applicable to these funds.

  • Report the financial results of AAOM operations according to the schedule established by the Finance Committee, but at least quarterly.

  • Pay all obligations and file required reports in a timely manner.

  • Make no contractual commitment for bank loans, corporate credit cards, or for real estate leases or purchases without specific approval of the Board.

  • Record fixed assets with purchase prices greater than $500 as capital assets in accounting records.

  • Depreciation of capital assets will not exceed five years for furniture and equipment or three years for computer and other technology equipment.

  • Limit vendor credit accounts to prudent and necessary levels.

  • Obtain competitive bids for items or services costing in excess of $5,000 per unit. Selection will be based on cost, service, and other elements of the contract.

The Board of Directors shall:

  • Review financial reports at each board meeting.

  • Provide adequate training to members to enable each member to fulfill his or her financial oversight role.

  • Require prior authorization of the Executive Committee before committing to and/or making any financial transactions.

FINANCIAL TRANSACTIONS WITH INSIDERS

With the exception of per diem for travel related expenses, no advances of funds to employees, officers, or directors are authorized. Direct and necessary expenses including transportation and lodging for meetings and other activities related to carrying out responsibilities shall be reimbursed.

In no case shall the organization borrow funds from any employee, officer, or director of the organization without specific authorization from the Board of Directors.

BUDGET

In order to ensure that planned activities minimize the risk of financial jeopardy and are consistent with board-approved priorities, long-range organization goals, and specific five-year objectives, the Executive Director shall:

  • Submit operating and capital budgets to the Finance Committee in time for reasonable approval by the Board prior to each fiscal year.

  • Use responsible assumptions and projections as background, with the general goal of an unrestricted surplus.

  • The board authorizes the Executive Director to manage the organization in accordance with the approved annual operating budget. Unbudgeted programmatic or operational changes that may have a significant impact on the annual budget ($10,000 or more) must be reviewed by the Board between budget cycles and may lead to a budget revision. The Board, with input from the Treasurer, will determine whether or not the budget should be revised mid-year.

IRS FORM 990

  • The external accounting firm will prepare the IRS Form 990.

  • The Executive Director will ensure that filing of tax returns and any government-ordered payments or other filings are undertaken in a timely and accurate manner.

  • The Executive Director will sign and certify that the IRS Form 990 is accurate and complete.

  • The Treasurer is authorized to review and approve the IRS Form 990 annual tax filing prior to submission, and the full board will receive a copy of the IRS Form 990 within 30 days of its submission.

  • Consistent with the requirements of §6104(d) of the Internal Revenue Code, copies of the organization’s Form 990 will be made available, upon request, in a timely manner, to any individuals who request it.

GIFT ACCEPTANCE

AAOM will accept stock or other negotiable instruments as a vehicle for donors to transfer assets to the organization. Transfer and recording the value of the asset shall be done in a consistent manner and in compliance with accounting standards. The Executive Director shall sell any stock given to the organization immediately upon receipt by the organization.

AAOM shall accept contributions of goods or services other than cash that are related to the programs and operations of AAOM. Any other contributions of non-cash items must be reviewed and approved by the Board of Directors before acceptance.

ASSET PROTECTION

In order to ensure that the assets of AAOM are adequately protected and maintained, the Executive Director shall:

  • Insure against theft and casualty losses to the organization and against liability losses to Board members, staff, or the organization itself to levels indicated in consultation with suitable professional resources.

  • Plan and carry out suitable protection and maintenance of property, building, and equipment.

  • Avoid actions that would expose the organization, its board, or its staff to claims of liability.

  • Protect intellectual property, information, and files from unauthorized access, tampering, loss, or significant damage.

  • Receive, process, and disburse funds under controls that are sufficient to maintain basic segregation of duties to protect bank accounts, income receipts, and payments.

INSURANCE

AAOM will purchase necessary policies to insure the organization against risk. Types of insurance to be purchased should include:

General liability (personal and property damage and punitive damage)

Nonprofit Officers’ and Directors’ Liability (also knows as association professional liability)

Annual Meeting Cancellation

In all cases, AAOM will be insured at the highest-possible levels.

Additional types of insurance needed to protect the organization must be approved by the board.