Chartered Affiliates Financial Reporting Obligations

In 2019, the House of Delegates unanimously voted to accept a policy requiring chartered affiliates to triennially verify their state and federal non-for-profit status. The information on this page will help you comply with this policy.

Reporting Groups

Chartered affiliates have been divided into three reporting groups. The first group will verify their status in the first quarter of 2022, the second group in 2023 and the third group in 2024. The process will start over with group 1 in 2025.

Group 1 Group 2 Group 3
Verification Due Q1 of 2022 Verification Due Q1 of 2023 Verification Due Q1 of 2024
Massachusetts Society Arkansas Society Indiana Society
Connecticut Society Delaware Society Kansas Society
North Dakota Society Mississippi Society Wyoming Society
North Carolina Society Washington Society New Hampshire/Vermont Society
Oregon Society New Jersey Society Colorado Society
Maine Society West Virginia Society Florida Society
Pennsylvania Society Illinois Society Georgia Society
Missouri Society Minnesota Society Hawaii Society
Ohio Society Nevada Society Idaho Society
DC/Maryland Society Iowa Society Kentucky Society
Montana Society Rhode Island Society Michigan Society
South Dakota Society Tennessee Society South Carolina Society
Alaska Society New York Society Utah Society
Alabama Society Louisiana Society Virginia Society
New Mexico Society Arizona Society Wisconsin Society
Texas Society Nebraska Society Oklahoma Society
California Society Puerto Rico Society  

Good Financial Practices

The House of Delegates Chartered Affiliates Committee has created the written guide and video series below to establish best practices for managing affiliate finances.

Download the guide

Enable cookies to see embeded content.

Enable cookies to see embeded content.

Enable cookies to see embeded content.

Need help?

The House of Delegates Chartered Affiliates Committee (CAC) is available to answer any questions you may have about this policy via email.

Send email to the CAC

The Financial Reporting Policy

The policy below is also included in the Chartered Affiliates Handbook, which is posted under Tools on the State Resources Page.

Policy HD016 — Chartered Affiliates’ Financial Reporting Obligations

Developed: January 2019

Adopted: July 2019

Reviewed:

Revised: October 2019

Purpose: Define the Chartered Affiliates’ financial reporting obligations.

Policy Statement: Chartered Affiliates have a fiduciary responsibility to their membership and the Association in general. The responsibilities and reporting mechanisms that each affiliate must provide to remain in compliance are outlined. The Chartered Affiliates Committee, in collaboration with the Executive Office, is responsible for collection and monitoring the information provided by each affiliate.

References: AARC Bylaws, October 2017. Article XII, Section 1.a. and American Association for Respiratory Care Policy Statement CA.002.

Responsibilities:

  • AARC Executive Office / Management — Assist in collection of financial reporting information.
  • AARC Executive Board — Adhere to and observe the AARC Bylaws related to Chartered Affiliates Committee responsibilities.
  • AARC House Officers — Adhere to and observe the AARC Bylaws related to Chartered Affiliates Committee responsibilities.
  • AARC House of Delegates Membership — Adhere to and observe the AARC Bylaws related to Chartered Affiliates Committee responsibilities.

Specific Policy Information:

  1. A chartered affiliate must triennially verify to the Chartered Affiliate Committee of their state and federal not-for-profit status. This will be done by submitting an independent certified public accountant (CPA) or an independent auditor’s report electronically to the AARC Executive Office. This written document does not need to include financial information.
    1. A chartered affiliate must maintain on file proof of state not-for-profit status such as a letter or other document from the state department of treasury.
    2. A chartered affiliate must maintain on file proof of federal not-for-profit status such as a letter or other document from the Department of the Treasury, Internal Revenue Service. The letter must include:
      1. Employer Identification Number,
      2. The type of not-for-profit status that the affiliate is recognized as exempt, i.e section 501(c)(3) or 501(c)(6) of the Internal Revenue Code.
      3. Proof of annual Form 990 or 990-EZ filing.
  2. A chartered affiliate must triennially verify to the Chartered Affiliate Committee that the affiliate treasurer and other checking account signatories are bonded. This will be done by submitting an independent certified public accountant (CPA) or an independent auditor’s report electronically to the AARC Executive Office. This written document does not need to include financial information.
  3. A chartered affiliate must maintain on file a copy of the policy cover letter or other provider information indicating an active policy.
  4. A chartered affiliate must triennially verify and provide written documentation to the Chartered Affiliate Committee that a financial audit, financial review or financial compilation was completed by an independent certified public accountant (CPA) or an independent auditor.
    1. This will be done by submitting an independent certified public accountant (CPA) or an independent auditor’s report electronically to the AARC Executive Office. This written document does not need to include financial information.
  5. The written documentation is the independent CPA or auditor’s report stating the affiliate’s accounting records fairly represent their financial position.
  6. The Chartered Affiliate Committee will review the financial verification checklist and independent certified public accountant (CPA) or an independent auditor’s report submitted by an affiliate and provide a report to the Audit Subcommittee and House.
  7. The Chartered Affiliate Committee will establish a schedule of when each affiliate will submit the financial checklist report.
  8. If an affiliate that does not submit a report or the report is inadequate, the committee will notify the affiliate that they are not in compliance with the Chartered Affiliate Financial Reporting policy.
    1. Notice will be sent to the affiliate president, treasurer and delegates.
    2. The notice will inform the affiliate they have 6 months to submit the necessary financial verification documentation or a corrective action plan. The corrective action plan may be implemented in collaboration with the Chartered Affiliate Committee.
    3. The Chartered Affiliate Committee will provide a report to the Audit Subcommittee and House Officers that the delinquent affiliate is complying with the corrective action plan.
  9. Failure to comply with this policy for two (2) consecutive reporting years, the Chartered Affiliates Committee may recommend
    1. an affiliate being denied a seat at a House meeting;
    2. revenue sharing being placed on hold; or
    3. rescinding of an affiliate’s charter.

Definitions used in this policy:

  • A 501(c)(3) organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. They are commonly referred to as charitable organizations that are operated for charitable, educational, religious, literary, or scientific purposes and includes membership associations. Lobbying and political activities are significantly restricted.
  • A 501(c)(6) organizations are operated to promote a common business interest. A membership organization is an example. They are allowed a wide range of lobbying. The main stipulation is that they are required to disclose to membership the percent of their annual dues that is lobbying.
  • Not-for-profit describes a type of organization that does not earn profits for its officers or directors. All the money earned by or donated to a not-for-profit organization is used in pursuing the organization’s mission and operation.
  • Bonding adds assurance to a donor, member or vendor that their money is safe with the affiliate. Regardless of affiliate structure, bonding the treasurer protects your affiliates money and investments. There is a variety of bonding patterns but common is individual or group. Costs of bonding vary widely, depending on the number of individuals involved and the amount of money handled, but the cost is reasonable relative to the protection such as policy provides. Insurance providers are sources to assist with determining bonding needs.
  • Certified public accountant is a designation that distinguishes licensed accounting professionals. These professionals offer financial statement audits and other attestation services to help inform investors about the financial health of organizations according to generally accepted accounting principles (GAAP).
  • The independent auditor or CPA refers to the fact that the individual is not an employee, member or related to an officer or director of the affiliate.
  • An audit is an outside, certified public accountant’s professional opinion on the accuracy of an organization’s year-end financial statements.
  • A financial review is conducted by an independent CPA to state whether they are aware of any material modifications that should be made to the financial statements for them to be in conformity with GAAP. The independent CPA does not express an opinion as to whether your financial statements are in accordance with GAAP. A review is substantially narrower in scope than an audit. For reporting purposes, the review is not considered an audit.
  • A compilation is intended for use by outside parties who may appreciate the business’s association with an independent CPA without requiring a level of assurance on the accuracy of financial statements. The independent CPA does not obtain any assurance for a compilation because the independent CPA is not required to verify the accuracy or completeness of the information provided or otherwise gather evidence for the purposes of expressing an audit opinion or a review conclusion.
AARC 75th Anniversary logo

Celebrating Our Past
Building Our Future