Section 5: Budget, Finance & Resource Development

A major function of the 4-H Council is to secure resources (financial and other) to conduct high quality and educational programs. The funds raised by the Council are handled by the 4-H Council treasurer with assistance and support from the budget and finance committee.

Almost all 4-H Council’s in Nebraska fall under the financial umbrella of the Nebraska 4-H Foundation. Only a Council that has applied for and operates as its own 501c3 organization, would not fall under this umbrella but would be responsible to the IRS on its own in the same ways. All 4-H Councils must follow the rules of being accountable with 4-H funds.

Accountability with 4-H Funds

4-H is a publicly owned program, supported by tax funds, with a name and logo (the 4-H Clover) protected by federal law. Therefore, funds donated to 4-H or to programs and activities under the name of 4-H must receive the same accountability as required in the handling of public or tax funds. It is required that 4-H Councils maintain their own checking account. The 4-H Council Treasurer is responsible for expending funds as authorized by the 4-H Council. The 4-H Council Treasurer may work with UNL Extension office staff on the 4-H Council bookkeeping.

Minimum requirements for handling 4-H funds include:

  • Money is held in a financial institution in a checking account
  • Documentation of all receipts and disbursements
  • Internal control procedures that protect the funds and those who handle the funds.
  • Regular reports of the status of all 4-H funds.
  • Adherence to the IRS rules as either a subordinate of the 4-H Foundation or as a 501c3 organization.


  • UNL Extension employees and 4-H Council members should be sensitive to the confidentiality of financial information which they deal with in carrying out the duties of their positions.
  • Every effort should be made to avoid a potential conflict of interest issues.

Recommended Procedures Regarding Cash

Cash is a liquid asset and must be handled diligently. Excess and unnecessary cash puts the 4-H Council and its members in questionable situations. Cash increases the risk of loss, fraud, and embezzlement.

Cash Receipts

Objectives of Cash Receipt Procedures

  • To assure that all cash due to the 4-H Council is received.
  • To assure that the proper entries have been made on the pertinent accounting records.
  • To assure that all cash receipts were appropriately deposited or otherwise safeguarded.

Required Conditions for Cash Receipts

  1. Cash-receiving activities are centralized in as few hands as possible.
  2. Cash receipts are supported by other records. All money (cash, checks, etc.) received is documented on a receipts form. One suggested method would be the use of a pre-numbered, receipt book. This receipt form should provide:
    1. name,
    2. date,
    3. item or activity,
    4. amount received (with sales tax identified where applicable), and
    5. method of payment.
    If a transaction is voided, this should be noted by writing VOID across the original and carbons of the receipt form with the reason for voiding the transaction. If individual receipts are not used, a log should document the same information required on the receipt form.
  3. People receiving cash have no access to accounting records. Incoming money is controlled by people other than those having access to cash or the accounting records.
  4. The first person receiving any money should document the source and amount of money received.
  5. All checks are made or endorsed payable to the 4-H Council.
  6. All cash receipts are deposited intact or otherwise safeguarded until deposited. Large sums of cash should be counted and verified by two persons.
  7. When depositing funds a duplicate deposit slip should be maintained as an organizational record. Each check deposited should be listed separately on the deposit slip. If payments are combined on a log such as during registration, the log should be attached to the office file copy of the deposit slip. If there is some other form of supporting documentation it can be attached to the deposit slip.
  8. All receipts should be deposited into this single checking account a minimum of once per week, preferably within two business days of receipt for large deposits. The actual number of deposits made per week will be a function of the amount and level of activity of the particular 4-H Council.
  9. Cash should only be issued for one of two reasons: (1) When the primary function is to sell goods or services on behalf of the 4-H Council. (2) When the 4-H Council is hosting or sponsoring an event that requires making change for the cash transactions of the event. Cash cannot be used to reimburse staff or member expenditures, pay invoices or provide a refund (i.e. prepaid registrations).
  10. The 4-H Council can authorize the use of cash for only one reason: a Change Fund for use at activities/fundraisers, including a food stand. Change Funds are used to make change for cash business transactions. Petty cash funds are not allowed. To minimize the handling of cash, the 4-H Council should consider approval of these funds only when necessary. If approved, the funds must be managed in accordance with the procedures and guidelines in this handbook.

Cash Disbursements

Objectives of Disbursements/Expenditures Procedures

  • Assure that disbursements are justified, are properly supported by evidence and that value has been received.
  • Assure that disbursements were made only with proper authorization.
  • Assure that the proper entries were made on the pertinent accounting records.

Required Conditions for Cash Disbursements

  1. All disbursements are made by check.
  2. All checks are signed with two original authorized signatures (signature stamp not acceptable).
  3. No pre-signed checks are allowed.
  4. No checks are made payable to cash.
  5. All checks are pre-numbered. No counter checks are permitted.
  6. All disbursements are properly substantiated. Supporting documents include evidence of purchase, receipt and approval.
  7. All such supporting documents are canceled in a manner that assures they cannot be reused.
  8. The use of charge accounts is discouraged. If used, charge accounts should be authorized by the Council for a specific period of time. Itemized invoices are required from vendors.
  9. Those authorized to sign checks are to be bonded, particularly if annual receipts total more than $25,000. Cash receipts and disbursements journals must be maintained to record financial transactions. Transactions will normally consist of expenditures (checks written) and receipts (checks and cash deposited into a checking account). All receipts and disbursements must be processed through the checking account. Never pay a vendor directly out of cash received!
  10. Whenever possible, program expenses should be paid directly from the 4-H Council account. Employees and volunteers who pay expenses with personal funds should submit proper documentation prior to reimbursement. Employees should also recognize that this reimbursement must be appropriate and authorized. As such, personal reimbursements are not guaranteed.
  11. No checks should be disbursed until acceptable documentation is presented to authenticate the claim. The claim should be signed or initialed by the individual authorized to approve the payment and indicate approval date, program, and business purpose. The invoice should be marked to identify the check number, date paid and amount. All documentation including cleared checks and electronic copies, deposit slips and transaction authorizations should be maintained for a minimum of seven years plus the current year.
  12. The 4-H Council must comply with IRS guidelines. The current IRS guidelines require that a 1099 be prepared for certain payments totaling $600 or more to any entity or individual.
  13. The 4-H Council must comply with IRS guidelines. Small tax-exempt organizations, such as 4-H Councils, Clubs and affiliated 4-H organizations, which previously were not required to file IRS returns because they earned less than $25,000 are required to file an annual electronic notice called an e-Postcard

If the 4-H Council, Club or affiliated 4-H organizations raises:

  1. More than $25,000 – they are still required to file Form 990, Return of Organization Exempt From Income Tax or Form 990-EZ, Short Form Return of Organization Exempt from Income tax.
  2. Less than $25,000 but more than $0 – they are required to file Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required to File Form 990 or 990-EZ.
  3. $0 – but plan to raise funds in the future and wish to retain inclusion under the Nebraska 4-H Foundation Group Exemption Number – they are required to file Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required Form 990 or 990-EZ.
  4. $0 – and have no plans to raise funds – they are not required to file.

Auditing the Financial Records

Annually, the financial records of the 4-H Council should be reviewed by someone removed from the actual operations. A CPA, an officer of the bank or a financial review committee may be used. Always conduct a financial review when transferring responsibility from one person to another for the protection of both parties.

The purpose of a financial review is to check procedures as defined by the 4-H Council Handbook and the accuracy of the account. It is not a check for fraud, although fraud will be reported if found. Account records should be clear so a financial review committee or anyone can understand the financial transactions.

The financial review committee should submit to the Council a written report, signed by the committee, on the condition of the financial records.


Often the workings of the 4-H Councils depend on the funds available; therefore a Treasurer’s report should be submitted to the Council monthly or at each meeting if meetings are not held each month. At a minimum the report should include all receipts and disbursements, beginning and ending balances, and should be signed by the Treasurer.

An annual financial report should be prepared at the close of the fiscal year. This report should include:

  1. Beginning account balance
  2. All receipts and expenditures for the period
  3. Bank justification
  4. Bank statement balance
  5. Deposits made, but not on the statement (add to balance)
  6. Outstanding checks (deduct from balance)
  7. Bank balance adjusted for outstanding deposits or checks
  8. Report on all investments including accumulated interest

Computer programs can aid in financial record keeping but are not a substitute for sound budgeting and financial management.


All 4-H Council records must be kept in a safe place for at least five years. Those handling 4-H funds need to be sensitive to the confidentiality of financial information. For example, while records of all donor contributions must be kept, respect the donor’s wishes when it comes to publicity surrounding donations.

A computer accounting program can be very useful in keeping financial records. Computer generated reports must receive the same safeguards and scrutiny as any others.

Budget Preparation & Control

The 4-H Council is expected to prepare an annual budget for planning purposes. The budget is a statement of the expected financial condition of the Council for the coming year. If is only an estimate, but should reflect a reasonable projection of the 4-H Council’s financial activity for the year. The line items of the budget should support the main goals that the Council wants to accomplish during the year. The Finance and Budget Committee develops the budget in keeping with the purpose, philosophy and long-term goals of the organization, sets appropriate objectives and identifies steps to achieve them.

Since the 4-H Council is considered a nonprofit organization Councils should plan to raise and spend approximately the same amount of money each year. The annual budget will help determine these anticipated expenses for the year and determine if it needs to raise money to meet those expenses. Generally, money raised during the course of the fiscal year should be spent that same year unless it is for a long term goal.

Since the budget establishes future expectations largely on past performance and present resources, it is provisional in nature. Unexpected circumstances such as changes in donors or expenses may affect the budget. This means that the budget must be flexible enough to reflect change without losing effectiveness in dealing with controllable events.

Specific functions of a finance and budget committee are to prepare:

  • Prepare a budget for the year to be approved by the entire Council.
  • Report on the financial condition and financial results of the operations of the Council.
  • Prepare an annual financial review.

Download Budget Example (Coming Soon!)

Fund Balance Policy

4-H Councils are required to manage their treasury responsibly. All funds must be used to support the 4-H program and educational activities of its members. The Council is not allowed to accumulate excessively large fund balances unless there is a specific project and activity that has been identified by the Council and a spending plan has been approved by the Council.

In Nebraska, 4-H Councils are allowed to have 1 ½ years of operating expenses in the treasury. Operating expenses relate to the actual expenses necessary to maintain the work of the council. Expenses that are in/out are not actual operating expenses (such as premium sales) and should not be considered in the amount of money that can be on hand. Anything over this 1 ½ years of actual operating expenses held in a council account has to have a spending plan approved and on file.

Resource Development/Fund Raising

Money for conducting the 4-H program comes from both private and public sources. Public (tax) dollars come from federal, state and Extension sources. Extension tax funds cannot be used for ribbons, medals, certificates, cash premiums, trips, scholarships, camp facilities or camp personnel; private dollars must be used for these purposes.

4-H Councils finance themselves with private dollars generated by donations or fundraising projects. Organizations or individuals should not ask or expect 4-H groups to sell items to benefit a specific product or individual, therefore taking advantage of the 4-H name.

Refer to the Nebraska 4-H Policy Handbook Section 12.6 Fund Raising for additional guidelines.

Donor List

Recognizing all types of donors is an import part of good community relations; keep a list of the names and addresses of all 4-H donors. Use this list to properly recognize those who support the 4-H program, this list should include names, addresses, type of donation, amount and date. Donations come in many forms in-kind contributions, such as meeting room space, place in a business to hold car washes or bake sales, public service announcements, newspaper articles; financial donations such as money for trophies, scholarships, pins; and volunteer time and expertise donations, such as help auditing Council books. All of these donations help 4-H throughout the year.

Guidelines on Equipment

Councils must keep an inventory of all equipment purchased by the Council which includes item, cost, date of purchase and storage location over $100. An inventory review can be conducted by the Council on a yearly basis.

In the event that a 4-H council owns property, contact the State 4-H Program Leader.

Debit Cards/Credit Cards

Debit Cards and Credit Cards are not allowed, there is too much risk because purchases can happen without dual approval. We suggest that if a purchase needs to occur at an establishment that will not accept checks, that someone pays personally for the expense and request reimbursement from the 4-H Council. That way we ensure there are dual signatures and the purchase is legit.