Policy 2030 Financial Operating Policy

Transcription

1 MARINE TECHNOLOGY SOCIETY Policy 2030 Approved 9/18/17

2 TABLE OF CONTENTS TABLE OF CONTENTS PURPOSE EXEMPT STATUS APPLICABILITY FISCAL YEAR METHOD OF ACCOUNTING BUDGET FINANCIAL REPORTS FINANCIAL REVIEW CATEGORIES OF FUNDS Operating Funds - Headquarters Operating Funds - Section, Student Section and Committee Funds Near-Term Contingency Reserve Fund Long-Term Reserve Fund RESPONSIBILITY OF FUNDS SPECIAL EVENT FEES AND DISBURSEMENTS MEMBERSHIP FEES AND REBATES CAPITAL ASSETS INSURANCE... 4 APPENDIX A ~ BUDGET FORMS... 5 APPENDIX B ~ HEADQUARTERS, SECTIONS AND COMMITTEE OPERATING FUND USES... 8 B.2 REVENUES... 8 B.3 EXPENDITURES... 8 B.3.1 Membership Expenditures... 8 B.3.2 Conference, Symposia, Workshop Expenditure... 8 B.3.3 Volunteer Expenditures... 0 B.3.4 Intellectual Property Expenditures

3 B.3.5 Equipment Expenditures... 0 B.3.6 Special Emerging Projects... 0 APPENDIX C ~ SECTION/COMMITTEE REQUEST FOR SPECIAL PROJECT FUNDING... 1 APPENDIX D ~ GUIDELINES FOR FUNDING ALLOCATION FOR COMMITTEE AND SECTION PROGRAMS... 3 D.2 SCOPE... 3 D.3 ETHICAL STANDARDS... 3 D.4 PROGRAM FUNDING ALLOCATION: BUDGET FORM AND BUDGET EVALUATION... 3 D.5 PROGRAM FUNDING ALLOCATION: SPECIAL PROJECT FUNDING... 4 APPENDIX E ~ CONFERENCE, WORKSHOP, SPECIAL EVENT REGISTRATION FEES... 5 APPENDIX F~ PROCEEDS FROM WORKSHOPS, CONFERENCES AND SECTION MEETINGS... 6 F.2 DISBURSEMENT OF FUNDS FROM LOCAL SECTION MEETINGS... 6 F.3 DISBURSEMENT OF FUNDS FROM OTHER MTS-AFFILIATED CONFERENCES, WORKSHOPS AND SYMPOSIA OTHER THAN OCEAN CONFERENCES... 6 APPENDIX G ~ TRAVEL AND OTHER EXPENSE REIMBURSEMENT... 7 G.2 PURPOSE... 7 G.3 GENERAL TRAVEL REQUIREMENTS... 8 G.3.2 Necessity of Travel... 8 G.3.3 Personal and Spousal Travel Expenses... 8 G.3.4 Travel Arrangements... 8 G.3.5 Expense Report... 8 G.3.6 Receipts... 0 G.4 AIR TRAVEL... 0 G.4.2 Saturday Stays... 0 G.4.3 Frequent Flyer Miles and Compensation for Denied Boarding... 1 G.4.4 Use of Personal Frequent Flyer Miles for MTS-related Air Travel... 1 G.5 LODGING... 1 G.6 OUT-OF-TOWN MEALS... 1 G.7 GROUND TRANSPORTATION... 1 G.7.1 Courtesy Cars... 1 G.7.2 Airport Shuttle or Bus

4 G.7.3 Taxis, Uber or other Vehicle Services... 2 G.7.4 Rental Cars... 2 G.8 NON-REIMBURSABLE EXPENDITURES... 2 G.9 BOARD OF DIRECTORS... 3 G.9.1 Airfare... 3 G.9.2 Lodging... 3 G.9.3 Meals... 3 G.9.4 MTS Sponsored Board Dinners... 3 G.9.5 Incidentals... 4 G.9.6 Rental Car... 4 G.9.7 Ground Transportation... 4 G.9.8 Mileage... 4 G.9.9 Conference Registration... 4 G.9.10 OCEANS Offshore... 4 G.9.11 Shared Interest... 5 G.10 EXECUTIVE DIRECTOR AND OTHER MTS EMPLOYEES... 5 G.10.1 Personal Cars... 5 G.10.2 Parking/Tolls... 5 G.10.3 Entertainment and Business Meetings... 6 G.10.4 Other Expenses... 6 APPENDIX H ~ REBATE TO SECTIONS AND COMMITTEE FOR MEMBERSHIP... 7 APPENDIX I ~ RESERVE FUNDS... 8 I.2 DEFINITIONS AND GOALS... 8 I.3 NEAR-TERM RESERVE... 8 I.4 LONG-TERM RESERVE... 9 I.5 ACCOUNTING FOR RESERVES... 9 I.6 FUNDING OF RESERVES... 9 I.7 USE OF BOARD DESIGNATED RESERVES...10 I.8 NEAR-TERM RESERVES SPENDING AUTHORITY...10 I.9 LONG-TERM RESERVES SPENDING AUTHORITY

5 I.10 REPORTING AND MONITORING...11 I.11 RELATIONSHIP TO OTHER POLICIES...11 I.12 REVIEW OF POLICY...11 APPENDIX J ~ INVESTMENT POLICY, OBJECTIVES AND GUIDELINES...12 J.3 INVESTMENT STRATEGY...12 J.4 ASSET ALLOCATION...13 J.5 REBALANCING...13 J.6 ANNUAL SPENDING RATE...13 J.8 ADDITIONS TO THE RESERVES...13 J.9 DIVERSIFICATION REQUIREMENTS...13 J.10 RESPONSIBILITY MATRIX...13 J.11 PORTFOLIO CONSTRAINTS...14 APPENDIX K ~ FINANCIAL REPORTING SCHEDULE...16 APPENDIX L ~ RISK and WEALTH MANAGEMENT COMMITTEE...17 L.1 PURPOSE...17 L.2 COMMITTEE MEMBERSHIP...17 L.3 ORGANIZATION...17 L.4 AUTHORITY AND RESPONSIBILITIES

6 1 PURPOSE The purpose of this policy is to provide information and guidance consistent with the Marine Technology Society (MTS) Articles of Incorporation, Bylaws, and Internal Revenue Service regulations concerning the administration of MTS finances. MTS is a unified entity comprised of local sections and professional committees. MTS is made up of volunteer members. Its activities are governed by a Board of Directors, and are conducted by standing and ad-hoc committees, local sections and professional committees. A paid staff carries out administrative and managerial functions. Compliance with IRS regulations is mandatory for MTS to maintain its tax-exempt status. Overall responsibility for the financial affairs of MTS rests with the Board of Directors, as does management oversight responsibility. Accordingly, the information and guidance in this policy prescribes procedures for general recurring activities and events. 2 EXEMPT STATUS MTS is chartered under the provisions of the Not-For-Profit Corporation Statutes in the State of New York. It is operated exclusively for scientific and educational purposes as defined in Section 501 (c)(3) of the Internal Revenue Code which provides the basis for MTS s federal income tax exempt status. In accordance with both the New York State Law and the Internal Revenue Service code, no part of the earnings of MTS shall be to the benefit of any private individual or elected MTS officials with the exception of bona fide payments for services to staff employees of MTS. No MTS funds may be used to participate in any political campaign on behalf of or in opposition to any candidate for public office. 3 APPLICABILITY The applies to all financial accounts and funds that are associated with MTS activities. There is only one MTS recognized by the Internal Revenue Service. Accordingly, all accounts, including MTS Headquarters, Sections and Committees constitute funds of MTS. This statement of financial operating policy shall be reviewed annually by the Board of Directors to insure compliance by responsible officers and for modification as may be appropriate in the interest of MTS. ~ 0 ~

7 Accountability may be maintained as separate accounts administered by MTS Headquarters, Sections and/or Committees. Each component has budgetary management of their individual accounts, with the Board of Directors maintaining oversight responsibility of budgets and financial activities. However, since all funds are fiscally unified, transfers or loans from one account to another may be accomplished upon the direction of the Executive Director, under the auspice of the Treasurer and Vice President of Finance (VP Finance). 4 FISCAL YEAR The MTS fiscal year is 1 July through 30 June. 5 METHOD OF ACCOUNTING The financial records of MTS are kept on an accrual basis, in accordance with U.S. Generally Accepted Accounting Principles (US GAAP). Section and Committee books may be kept on either a cash or accrual basis. Conference books are maintained on a cash basis. 6 BUDGET A draft copy of the annual operating budget, prepared jointly by the VP Finance and the Executive Director shall be submitted to the Board of Directors in accordance with the Finance Reporting Schedule found in Appendix K. Under all circumstances, a section and/or professional committee budget must be submitted for the following fiscal year for approval by the Board of Directors. The budget must adhere to the guidelines found in Appendix D ~ Guidelines for Funding Allocation for Committee and Section Programs and be submitted on the forms found in Appendix A. A draft copy of the section and/or professional committee annual operating budget shall be submitted to the Executive Director at MTS headquarters no later than 1 January. Sections and Committees that do not submit a budget by the deadline shall not be eligible to budget for newly created projects for the coming fiscal year, although requests for Special Projects may still be made (see Appendix C). The approved budget goes into effect on July 1 of that year. Authorization to spend money is contingent upon a budget being approved by the Board of Directors. If the Board of Directors does not act on the budget prior to the beginning of the fiscal year, the President shall prescribe an interim obligation authority to the VP Finance until approval of the budget by the Board of Directors. ~ 1 ~

8 The level of this interim authority shall not exceed the expenditure rate of the immediate preceding year. 7 FINANCIAL REPORTS MTS Headquarters staff will prepare the following reports at the end of each quarter for review by the Executive Director. The reports are to be sent to the Budget and Finance Committee and the President no later than the dates indicated on the Financial Reporting Schedule found in Appendix K. Balance Sheet Status reports for investments Revenue and Expense Statement Comparison to Budget Report These reports shall be maintained on file. The most recent financial status shall be provided by the Executive Director to members of the Board of Directors at each scheduled meeting. An annual report consisting of the Balance Sheet and a Year-End Revenue and Expense Statement will be published in an official MTS publication. Each Section and Committee shall provide to the Executive Director an end of year financial status report of revenues and expenses that describes the financial affairs of the group. Appropriate forms will be provided by staff to facilitate the report submission. These forms will be submitted to MTS s accounting firm. Copies of these reports will be made available to the Board of Directors. 8 FINANCIAL REVIEW An annual review will be completed within four months of the end of the fiscal year by a certified public accountant. The review shall be provided to the VP Finance and the Board of Directors. 9 CATEGORIES OF FUNDS There are four approved categories of funds which may be established and identified in reports, annual reviews, audits and accounting. 9.1 Operating Funds - Headquarters These funds are maintained in MTS Headquarters bank account(s) and are used to execute the approved annual budget of MTS. Individual commitments and/or disbursements of these funds up to $15, may be authorized by the Executive Director. Expenditures over $15, or partial payments for obligations > $15, must be authorized and signed by the Executive Director and one of the following: President, VP Finance, or President Elect. ~ 2 ~

9 Obligations and liabilities over $15, must be vetted through and authorized by the Board of Directors. 9.2 Operating Funds - Section, Student Section and Committee Funds These funds are maintained by the responsible entity (Section, Committee, etc.) in a separate and properly designated MTS bank account and used to execute the respective group's activities as sanctioned by the Bylaws and are considered an extension of the "Operating Funds" of MTS Headquarters. All Section, Student Section and Committee funds must be in concentration checking and savings accounts at the same financial institution as MTS Headquarters whenever possible and must include the MTS Executive Director as one of the authorized signatories. 9.3 Near-Term Contingency Reserve Fund These funds are maintained in a separate account overseen by the MTS Risk and Wealth Management Committee (RWMC) and are used to provide for the continuance of MTS operations in the event of any near-term impairment of ordinary membership or other sources income. This Near-Term Contingency Reserve is also intended to provide funds to meet special targets of opportunity or needs that further the mission of the organization but may or may not have a specific expectation of incremental or long-term increased income. It may also be used for organizational capacity building such as research and development or investment in infrastructure that will build long-term capacity. Approved uses and the approval process for accessing these funds are detailed in in Appendix I. The investment and custodianship of these funds is detailed in the MTS Investment Policy Objectives and Guidelines found in Appendix J. 9.4 Long-Term Reserve Fund These funds are maintained in a separate account overseen by the MTS Risk and Wealth Management Committee (RWMC), chaired by the VP Finance, and are used only in the event of long term disruption in anticipated revenue stream as described in Appendix I. The investment and custodianship of these funds is detailed in the MTS Investment Policy Objectives and Guidelines found in Appendix J. Approved uses and the approval process for accessing these funds is detailed in in Appendix I. 10 RESPONSIBILITY OF FUNDS As specified in the Bylaws, the VP Finance shall have oversight of and supervision over the maintenance of the official records of MTS. (S)he shall also be responsible for the supervision of the collection and disbursement of all MTS funds. (S)he shall be responsible for financial reporting to the Board of Directors in accordance with Appendix K or at such frequency and in such format as the Board of Directors shall demand. ~ 3 ~

10 11 SPECIAL EVENT FEES AND DISBURSEMENTS The MTS Professional Committees and Local Sections may conduct various conferences, workshops and special events designed to meet MTS objectives. A proposal that describes the event with an accompanying budget must be prepared for each activity. The budget must indicate the projected revenue, anticipated expenses and resulting surplus from the activity and should be submitted at least 3 months prior to the event. The budget is reviewed by the Budget and Finance Committee. The Section chair and section treasurer or the Committee chair and Committee treasurer may be called if clarification is necessary. After the review, the committee will forward the budget to the Board of Directors for approval. Registration fees associated with conferences, workshops and other activities shall follow the guidance outlined in Appendix E. Disbursement of surplus funds from activities shall be consistent with Appendix F. 12 MEMBERSHIP FEES AND REBATES Fees for the various categories of membership authorized in the bylaws shall be reviewed by the Budget and Finance Committee. If changes are recommended they are to be submitted to the Board of Directors for approval. Revenues generated from membership fees shall be shared among MTS headquarters, sections and committees consistent with Appendix G. 13 CAPITAL ASSETS Capital assets of MTS over $500 including office machines and furniture will be capitalized and depreciated in accordance with U.S. Generally Accepted Accounting Principles. Expendable office supplies shall be expensed upon receipt. 14 INSURANCE The Executive Director, in consultation with the VP Finance, shall prepare, as part of the annual budget, recommendations on insurance coverage to include but not be limited to bonding indemnification, liability and property damage. ~ 4 ~

11 APPENDIX A ~ BUDGET FORMS A.1 BUDGET FORM 1 Budget for Upcoming Fiscal Year Due at HQ January 1 Committee/Section Preparer Date Balance July 1 Projected Income * Workshops *Meetings Advertising *Conference Rebate Interest *Other: Give Descriptive Title *Other: Give Descriptive Title *Other: Give Descriptive Title *Other: Give Descriptive Title Grand Total Projected expenses *Workshops *Meetings *Conferences Publicity Postage *Scholarships Web Services Equipment Telephone *Travel Expenses *Other: Give Descriptive Title *Other: Give Descriptive Title *Other: Give Descriptive Title Grand Total Checking Savings/Investments Comments Projected Balance All lines with an asterisk * must be accompanied by a completed program justification form. Bank statement(s) dated June 30 th of the current year MUST accompany this submission ~ 5 ~

12 A.2 BUDGET FORM 2 Program Justification Due at HQ January 1 Committee/Section: Preparer: Date: Income Items Purpose of the activity Desired outcome and importance Benefit to MTS How the project can be financially self-sustaining Expense Items Purpose of the activity Desired outcome and importance Benefit to MTS How the project can be financially self-sustaining ~ 6 ~

13 A.3 BUDGET FORM 3 Capital Assets Due at HQ January 1 Detail of equipment purchases Cost Proposed Date of Purchase ~ 7 ~

14 APPENDIX B ~ HEADQUARTERS, SECTIONS AND COMMITTEE OPERATING FUND USES B.1 MTS OPERATING FUNDS These funds shall be used to address the revenues and expenses associated with the dayto-day operations of MTS. Monies shall be maintained in checking and money market accounts that permit cash/check and credit card deposits. Disbursements shall be by check or wire transfer. Funds maintained by Sections and Committees are also designated as Operating Funds and are considered an extension of the Operating Funds of MTS Headquarters. All monies received and expended as Operating Funds must be done so for the purposes of MTS and approved by the Board of Directors via the budget and/or special project funding approval process. Funds held in Section and Committee accounts deemed to be in excess of the Section or Committee s immediate needs may, by mutual agreement between the Section/Committee Chair and the Executive Director, be returned in whole or in part to MTS Headquarters. B.2 REVENUES Monies for Operating Funds shall be raised through membership dues, conferences, symposia and workshops, publication sales and miscellaneous activities such as merchandise sales, grants and donations. B.3 EXPENDITURES All payments for expenditures shall be done relative to activities associated with MTS programs. B.3.1 Membership Expenditures Travel for section leaders and committee chairs are budgeted in the headquarters budget and shall not be included as reasonable expenditures for local sections or professional committees. B.3.2 Conference, Symposia, Workshop Expenditure MTS Headquarters, Sections and Committees may expend funds for events initiated and sponsored by MTS Headquarters, Sections or Committees. Categories of expenses include arrangements, exhibits, technical program, publications, publicity, registration and committee volunteer member expenses. ~ 8 ~

15 B.3.3 Volunteer Expenditures Use of operating funds to support volunteer expenses shall be included in the event budget and must adhere to the Marine Technology Society Travel and Other Expense Reimbursement Policy found in Appendix G. Volunteer includes but is not limited to board members, section and committee chairs, all other section or committee executives (e.g. finance, publicity, web managers, etc.) and event volunteers. B.3.4 Intellectual Property Expenditures The cost for printing of publications and production of CDs (intellectual property) and their distribution shall be included in the budget for any event. All intellectual property is considered the property of MTS and a copy or copies shall be forwarded to headquarters immediately following the event. B.3.5 Equipment Expenditures MTS Headquarters, Sections and Committees may expend funds for equipment such as computers as well as supplies to support the equipment operation and use. An annual inventory of assets over $500 must be done as part of an annual financial report submission. B.3.6 Special Emerging Projects Expenditures for Section or Committee Emerging Projects can be provided by MTS Headquarters upon receipt and approval of Section/Committee Request for Special Project Funding found in Appendix C.

16 APPENDIX C ~ SECTION/COMMITTEE REQUEST FOR SPECIAL PROJECT FUNDING Please fill out the entire form as accurately and completely as possible. After completing the form, please make a copy for your records and send the original directly to the Executive Director, MTS. You may send electronically if you have an electronic signature. You may use additional sheets where necessary. Please note that this request is for one fiscal year (July 1-June 30). Name Signature Date Phone E- mail Section/Committee Proposed Program Title Program Description (Provide the following information on additional sheets of paper or on the back of this form, as needed) 1. Purpose of the Program (include benefit to MTS as a whole and/or MTS membership group). 2. Describe desired outcome or deliverables (For example, if a publication, number of publications, publication schedule, audience, distribution) 3. Proposed Budget. Please include as many expenses [and income sources] as possible, and include a column that includes the amount requested for additional funds from HQ for each expense line. Use separate sheet (excel sheet) if necessary. Provide sufficient detail to allow for the understanding and evaluation of each expense. 4. Total Amount Requested for this fiscal year (July 1-June 30): $ 5. Is this program contingent upon receiving funds on a yearly basis? If yes, for how many year

17 6. How will you sustain the program? 7. What matching funds from other Sources will be provided? 8. An annual report for this special program is a requirement for funding. Who will be providing this report by June 30? Check Yes/No Recv d HQ Comment VP Review President Review Action Taken

18 APPENDIX D ~ GUIDELINES FOR FUNDING ALLOCATION FOR COMMITTEE AND SECTION PROGRAMS D.1 PURPOSE These guidelines shall apply to approving professional committee and section program funding, through the budget process and through special project funding requests. D.2 SCOPE This guideline applies to all professional committees and sections of the Marine Technology Society. It does not apply to OCEANS XX funding requests. D.3 ETHICAL STANDARDS The Marine Technology Society has adopted some of the National Association of Purchasing Management s standards of purchasing practice as a guide to ethical funding allocation practices. These are as follows: 1. Avoid the intent and appearance of unethical or compromising practice in relationships, actions, and communications. 2. Demonstrate loyalty to MTS by diligently following the policies of MTS, using reasonable care and only authority granted. 3. Promote positive relationships through impartiality in all phases of the funding allocation process. D.4 PROGRAM FUNDING ALLOCATION: BUDGET FORM AND BUDGET EVALUATION All Section and Committee programs (activities; projects; scholarships, etc.) shall be accounted for in the budget. 1. Sections and Committees must submit their budgets for the upcoming fiscal year (July 1-June 30) as specified in the All revenue line items must come from funds generated by the section/committee and expenses must be funded by those revenue lines. In fiscal years where projected revenues fall short, the sections/committees are to avoid deficit spending. The budget must be adjusted to lower expenses and resubmitted during the fiscal year. (MTS Headquarters will not fund deficit spending.)

19 D.5 PROGRAM FUNDING ALLOCATION: SPECIAL PROJECT FUNDING New, unbudgeted items might require contingency funds if the section/committee lacks the financial resources to initiate them. These funds may be requested from MTS Headquarters. 1. Sections and Committees must submit the request for funds form found in Appendix C. 2. Requests are reviewed by Staff for completeness and forwarded to the Budget and Finance Committee. 3. The Budget and Finance Committee will review the submission. Line items are evaluated as follows: a. Purpose of the activity b. Desired outcome and importance c. Benefit to MTS value-added to members recruitment of new members d. How can the project be financially self-sustaining? Can this item be self sufficient, or does its success rely on continued section/committee support? Will this program require future investment from MTS Headquarters? 4. The Budget and Finance Committee will make its recommendations to the Board of Directors. 5. The President is responsible for informing the section/committee of the review decision. Budgets that are not approved must be corrected and returned prior to April 1. Special project funding requests that are not approved must be adjusted and resubmitted for review or abandoned.

20 APPENDIX E ~ CONFERENCE, WORKSHOP, SPECIAL EVENT REGISTRATION FEES The registration fee for each activity shall be determined by the activity chair. However, general guidelines that shall be considered are: 1. Registration fees for MTS members must be lower than non-mts members 2. Registration fees shall consider the duration of the activity If a special situation arises where a Professional Committee or Local Section has undue difficulty including the surcharge on registration and exhibitor fees, an appeal, with justification, shall be included in the proposal.

21 APPENDIX F~ PROCEEDS FROM WORKSHOPS, CONFERENCES AND SECTION MEETINGS F.1 DISBURSEMENT OF FUNDS FROM OCEANS CONFERENCES An MTS section that enters into an agreement (Memorandum of Agreement) to organize an annual OCEANS conference will receive 20% of MTS s share of surplus funds. In the event that no recognized local section organizes the conference, 100% of the surplus funds remain with MTS Headquarters. F.2 DISBURSEMENT OF FUNDS FROM LOCAL SECTION MEETINGS Surplus funds from MTS condoned activities including Local Section meetings, luncheons, picnics, social events and fundraisers are retained by the Local Section. F.3 DISBURSEMENT OF FUNDS FROM OTHER MTS-AFFILIATED CONFERENCES, WORKSHOPS AND SYMPOSIA OTHER THAN OCEAN CONFERENCES These surplus funds are defined as funds from MTS-approved conferences, workshops and/or symposia that are: 1. Conducted for an industry-wide audience, a community-at-large or for the national membership, and 2. Sponsored/conducted by MTS entities such as MTS Local Sections and/or MTS Professional Committees. Surplus funds in excess of the committee s approved annual budget shall be sent to headquarters within 6 months (180 days) of the holding of an MTS event. The MTS Board of Directors, commensurate with stipulated Bylaw assigned responsibilities, has ultimate control to change, amend or modify the funding distribution. Such action may be deemed appropriate when it is essential for MTS fiscal solvency or other dominant professional considerations.

22 APPENDIX G ~ TRAVEL AND OTHER EXPENSE REIMBURSEMENT G.1 PREAMBLE This travel and other expense reimbursement policy has been developed under the following rationale. Use of operating funds by MTS members to attend conferences, symposia or workshops may be authorized, upon the discretion of headquarters and based on budgetary restrictions. However, as a learned professional Society, it is anticipated that members who participate in the activities of MTS will normally be responsible for the expenses they incur with their participation. In return, member s participation contributes strongly to the professional growth of the individual. Employers of MTS members, in return, benefit greatly by the professional growth of their employees and the visibility gained by their organizations through participation in these events. Because of these benefits, it is expected that the member will be able to obtain travel costs reimbursement from their employer, from other sources, or use personal funds. The Society s annual budget identifies the annual level of support for Board of Directors, Council members (Section and Committee chairs) and others travel to MTS Board of Directors, Council, and other meetings. G.2 PURPOSE The Board of Directors of the Marine Technology Society ( MTS ) recognize that board members, section and committee chairs, any and all other types of volunteers, officers, and employees ( Personnel ) of MTS may be required to travel or incur other expenses from time to time to conduct MTS business and to further MTS s exempt purpose. The purpose of this Policy is to ensure that (a) adequate cost controls are in place, (b) travel and other expenditures are appropriate, and (c) to provide a uniform and consistent approach for the timely reimbursement of authorized expenses incurred by Personnel. It is the policy of MTS to reimburse only reasonable and necessary expenses incurred by Personnel. When incurring business expenses, MTS expects Personnel to: Exercise discretion and good business judgment with respect to those expenses. Be cost conscious and spend MTS s money as carefully and judiciously as the individual would spend his or her own funds.

23 Report expenses, supported by required documentation, as they were actually spent. G.3 GENERAL TRAVEL REQUIREMENTS G.3.1 Advance Approval All trips involving air travel or at least one overnight stay must be approved in advance by the MTS President or his/her designee. G.3.2 Necessity of Travel In determining the reasonableness and necessity of travel expenses, Personnel and the person authorizing the travel shall consider the ways in which MTS will benefit from the travel and weigh those benefits against the anticipated costs of the travel. The same considerations shall be taken into account in deciding whether a particular individual s presence on a trip is necessary. In determining whether the benefits to MTS outweigh the costs, less expensive alternatives, such as participation by telephone or video conferencing shall be considered. G.3.3 Personal and Spousal Travel Expenses Individuals traveling on behalf of MTS may incorporate personal travel or business with their MTS-related trips; however, Personnel shall not arrange MTS travel at a time that is less advantageous to MTS or involving greater expense to MTS in order to accommodate personal travel plans. Any additional expenses incurred as a result of personal travel, including but not limited to incremental airfare, extra hotel nights, additional stopovers, meals or transportation, are the sole responsibility of the individual and will not be reimbursed by MTS. G.3.4 Travel Arrangements Travel should be arranged to ensure the Society gets the maximum benefit from complimentary or negotiated hotel rates and travel reward programs. G.3.5 Expense Report Expenses will not be reimbursed unless the individual requesting reimbursement submits a written Expense Report. The Expense Report, which shall be submitted at least monthly or within two weeks of the completion of travel if travel expense reimbursement is requested, must include:

24 The individual s name If reimbursement for travel is requested, the date, origin, destination and purpose of the trip, including a description of each Society-related activity during the trip The name and affiliation of all people for whom expenses are claimed (i.e., people on whom money is spent in order to conduct MTS s business) An itemized list of all expenses for which reimbursement is requested G.3.6 Receipts Receipts are required for all expenditures billed directly to MTS, such as airfare and hotel charges. No expense in excess of $25.00 will be reimbursed to Personnel unless the individual requesting reimbursement submits with the Expense Report written receipts from each vendor (not a credit card receipt or statement) showing the vendor s name, a description of the services provided (if not otherwise obvious), the date, and the total expenses, including tips (if applicable). G.4 AIR TRAVEL G.4.1 General Economy class air travel is the acceptable fare reimbursable for any and all domestic MTS travel. Air travel reservations should be made as far in advance as possible in order to take advantage of reduced fares. MTS will reimburse or pay only the cost of the lowest coach class fare actually available for direct, nonstop flights from the airport nearest the individual s home or office to the airport nearest the destination. For approved MTS international travel, where a flight duration is in excess of six hours, Economy Plus (also termed Economy Comfort, etc.) class is allowed. This fare class may also be approved in advance by the MTS President for travelers with medical circumstances. G.4.2 Saturday Stays Personnel traveling on behalf of MTS are not required to stay over Saturday nights in order to reduce the price of an airline ticket. An individual who chooses to stay over a Saturday night shall be reimbursed for reasonable lodging and meal expenses incurred over the weekend to the extent the expenses incurred do not exceed the difference between the price of the Saturday night stay ticket and the price of the lowest price available ticket that would not include a Saturday night stay. To receive reimbursement for such lodging and meal expenses, the individual must supply, along with the Expense Report, documentation of the amount of the difference between the price of the Saturday stay and non- Saturday stay airline tickets.

25 G.4.3 Frequent Flyer Miles and Compensation for Denied Boarding Personnel traveling on behalf of MTS may accept and retain frequent flyer miles and compensation for denied boarding for their personal use. Individuals may not deliberately patronize a single airline to accumulate frequent flyer miles if less expensive comparable tickets are available on another airline. G.4.4 Use of Personal Frequent Flyer Miles for MTS-related Air Travel A claim for reimbursement for the use of an individual s personal frequent flyer miles for air travel will be accepted. MTS will reimburse or pay only the equivalent of the cost of the lowest coach class fare actually available for direct, non-stop flights from the airport nearest the individual s home or office to the airport nearest the destination. Documentation of the equivalent cost of the lowest coach class fare must be supplied with the Expense Report. G.5 LODGING Personnel traveling on behalf of MTS may be reimbursed at the single room rate for the reasonable cost of hotel accommodations. Convenience, the cost of staying in the city in which the hotel is located, and proximity to other venues on the individual s itinerary shall be considered in determining reasonableness. Personnel shall make use of available corporate and discount rates for hotels. Deluxe or luxury hotel rates will not be reimbursed. G.6 OUT-OF-TOWN MEALS Personnel traveling on behalf of MTS are reimbursed for the reasonable and actual cost of meals (including tips) subject to a maximum of the IRS Meals and Incidental Expense (M&IE) current per diem rate for the locale of travel. Business justification for reasonable alcohol expense must be detailed on expense report. G.7 GROUND TRANSPORTATION Personnel are expected to use the most economical ground transportation appropriate under the circumstances and should generally use the following, in this order of desirability: G.7.1 Courtesy Cars Many hotels have courtesy cars, which will take you to and from the airport at no charge. The hotel will generally have a well-marked courtesy phone at the airport if this service is available. Personnel should take advantage of this free service whenever possible.

26 G.7.2 Airport Shuttle or Bus Airport shuttles or buses generally travel to and from all major hotels for a small fee. At major airports, such services are as quick as a taxi and considerably less expensive. Airport shuttle or bus services are generally located near the airport s baggage claim area. G.7.3 Taxis, Uber or other Vehicle Services When courtesy cars and airport shuttles are not available, a taxi is often the next most economical and convenient form of transportation when the trip is for a limited time and minimal mileage is involved. A taxi may also be the most economical mode of transportation between an individual s home and the airport. G.7.4 Rental Cars Car rentals are expensive so other forms of transportation should be considered when practical. Personnel will be allowed to rent a car while out of town provided that advance approval has been given by the MTS President or his/her designee and that the cost is less than alternative methods of transportation. G.8 NON-REIMBURSABLE EXPENDITURES MTS maintains a strict policy that expenses in any category that could be perceived as lavish or excessive will not be reimbursed. Such expenses are inappropriate for reimbursement by an organization exempt from federal income tax pursuant to Internal Revenue Code Section501(c)(3). Expenses that are not reimbursable include, but are not limited to: Travel insurance First class tickets or upgrades When lodging accommodations have been arranged by MTS and the individual elects to stay elsewhere, reimbursement is made at the amount no higher than the rate negotiated by MTS. Reimbursement shall not be made for transportation between the alternate lodging and the meeting site Limousine travel Movies, other entertainment Membership dues at any country club, private club, athletic club, golf club, tennis club or similar recreational organization Participation in or attendance at golf, tennis or sporting events, without the advance approval of the Board of Directors or MTS s Executive Director or his/her designee Purchase of golf clubs or any other sporting equipment Spa or exercise charges Clothing purchases Business conferences and entertainment which are not approved by the Board of Directors or MTS s Executive Director or his/her designee Valet service Car washes

27 Toiletry articles Expenses for spouses, friends or relatives. If a spouse, friend or relative accompanies Personnel on a trip, it is the responsibility of the Personnel to determine any incremental cost for double occupancy and related expenses and to make the appropriate adjustment in the reimbursement request Overnight retreats without the prior approval of the Board of Directors or MTS s Executive Director or his/her designee G.9 BOARD OF DIRECTORS The provisions of this Travel and Other Expense Reimbursement Policy shall apply except in the specifics noted below for the Board of Directors Personnel. G.9.1 Airfare Round-trip economy class booked as far in advance as possible. Board members are encouraged to book through MTS head office to ensure the Society gets the maximum benefit from travel reward programs. G.9.2 Lodging Up to three nights hotel accommodation for attendance at Underwater Intervention, two nights for Offshore Technology Conference and up to five nights accommodation for attendance at OCEANS North America. Hotel bookings should be made through MTS head office whenever possible to ensure the best possible rate, to take advantage of room block comp nights at our annual meeting and for meeting logistics purposes. G.9.3 Meals Meals will be reimbursed. G.9.4 MTS Sponsored Board Dinners Board members may invite their spouse to attend MTS sponsored board dinners and OCEANS galas at no cost to the board member. Other guests invited to these events will be the responsibility of the inviting board member.

28 G.9.5 Incidentals Personal phone calls and other incidentals are not reimbursable. G.9.6 Rental Car Rental car use is reimbursable only if it is equal to or less than the cost of to/from ground transportation or has been pre-approved by the MTS President or his/her designee in advance. G.9.7 Ground Transportation Reimbursement is limited to local taxi or shuttle fares to and from terminals and MTS events, round-trip rail and bus fares. G.9.8 Mileage Use of your own vehicle will be reimbursed at the IRS mileage rate. Reimbursable use of your own vehicle will be limited to transportation to and from home to your departure airport or to and from a meeting that may be held in a board member s local area but only when attendance at that meeting is in the capacity of an MTS board member. G.9.9 Conference Registration Conference registration for OCEANS North America will be provided and should be arranged by MTS head office to ensure the Society takes advantage of any complimentary registrations offered. No registration for Underwater Intervention, Offshore Technology Conference or OCEANS Offshore will be provided. A claim for reimbursement of conference registration fees may be submitted by a Board member who attends other workshops, symposia and conferences provided such attendance is to conduct MTS business and further MTS s purpose in their capacity as a member of the board. Pre-approval by the MTS President or his/her designee is required. G.9.10 OCEANS Offshore Board members may be invited by the President to attend an OCEANS Offshore conference. Some or all of their travel expenses may be reimbursable. Such expense reimbursement is to be determined on a case-by-case basis at the

29 time the invitation is extended. An expense that is otherwise non-reimbursable should not be reimbursed in this case. G.9.11 Shared Interest In the normal course of non-mts travel, a board member may be aware of an opportunity to conduct MTS business and further MTS s purpose in their capacity as a member of the board during their trip or by extending it. In such cases and when pre-approved by the MTS President or his/her designee, a claim for reimbursement may be submitted for prorated or incremental travel expenses incurred. An estimate of the travel expenses to be claimed should be given when requesting pre-approval. G.10 EXECUTIVE DIRECTOR AND OTHER MTS EMPLOYEES In addition to the provisions of this Travel and Other Expense Reimbursement Policy, certain types of expenditures are reimbursable to MTS employees and Board Members. G.10.1 Personal Cars Employees are compensated for use of their personal cars when used for Society business except for commuting between home and normal work place. When using their personal car for such travel, including travel to and from the airport, mileage will be allowed at the currently approved IRS rate per mile. In the case of employees using their personal cars to take a trip that would normally be made by air, e.g., Minneapolis to Milwaukee, mileage will be allowed at the currently approved rate; however, the total mileage reimbursement will not exceed the sum of the lowest available round trip coach airfare. G.10.2 Parking/Tolls Parking and toll expenses, including charges for hotel parking, incurred while traveling on Society business will be reimbursed. The costs of parking tickets, fines, car washes, valet service, etc., are the responsibility of the employee and will not be reimbursed.

30 On-airport parking is permitted for short business trips. For extended trips, offairport facilities should be used. G.10.3 Entertainment and Business Meetings Reasonable expenses incurred by employees for meetings or other types of Society-related entertainment will be reimbursed. MTS employees must have the activity pre-approved by the Executive Director. The Executive Director must have his/her activity pre-approved by the MTS President or his/her designee. Detailed documentation for any such expense must be provided, including: date and place of entertainment. nature of expense. names, titles and corporate affiliation of those entertained. a complete description of the Society purpose for the activity including the specific Society matter discussed. vendor receipts (not credit card receipts or statements) showing the vendor s name, a description of the services provided, the date, and the total expenses, including tips (if applicable). G.10.4 Other Expenses Reasonable MTS-related telephone and fax charges due to absence of employees from the individual s place of business are reimbursable. In addition, reasonable and necessary gratuities that are not covered under meals may be reimbursed. Emergency secretarial work and/or postal charges incurred in the completion of MTS work are also reimbursable.

31 APPENDIX H ~ REBATE TO SECTIONS AND COMMITTEE FOR MEMBERSHIP It is the practice of MTS to support the membership activities of the Local Sections and Professional Committees. Financial rebates shall be made to each Section or Committee that recruits new members into MTS. All types of membership earn a rebate, i.e., Corporate, Business, Institute, Patron, Individual, etc. The rebate for each membership shall be a one-time payment provided no later than Sep 30 following the fiscal year end that the member joined. The amount of the rebate shall be a percentage of the membership fee. The rate of computation of the payment shall be established annually during the preparation of the MTS budget.

32 APPENDIX I ~ RESERVE FUNDS I.1 PURPOSE The purpose of the Reserves policy for the Marine Technology Society is to ensure the stability of the mission, programs, employment, and ongoing operations of the organization and to provide a source of internal funds for organizational priorities such as program opportunities and capacity building. The Reserves policy will be implemented in concert with the other governance and financial policies of the Society and is intended to support the goals and strategies contained in these related policies and in strategic and operational plans. These funds will be maintained in a separate account, overseen by the MTS Risk and Wealth Management Committee (RWMC) described in Appendix L to achieve the following objectives: 1. To enable the organization to sustain operations through delays in payments of committed funding without jeopardizing ongoing operations; 2. To promote member and public confidence in the long-term sustainability of the organization by preventing chronic cash flow crises that can diminish its reputation and force its leaders to make expensive short-term crisis-based decisions, and 3. To create an internal line of credit to manage cash flow and maintain financial flexibility. I.2 DEFINITIONS AND GOALS The Near-Term Reserve and the Long-Term Reserve Funds are defined as designated funds set aside by action of the Board of Directors. The minimum amount to be designated in each Reserve Fund will be established in amounts sufficient to maintain ongoing operations and programs for a set period of time, measured in months. These Reserve Funds serve a dynamic role and will be reviewed and adjusted in response to both internal and external changes. I.3 NEAR-TERM RESERVE The Near-Term Reserve is intended to provide an internal source of funds for cash flow management and situations such as a sudden increase in expenses or one-time unbudgeted expenses to meet special targets of opportunity that further the mission of the organization but that do not have a specific expectation of incremental or long-term increased income. They are not to be used to initiate a recurring cost that will require to be sustained by further withdrawals from Reserve funds. These funds may also be used for organizational capacity building such as research and development or investment in infrastructure that

33 will build long-term capacity. Near-Term Reserves are not intended to replace a permanent loss of funds or eliminate an ongoing budget gap. It is the intention of the society for the Short- Term Reserve to be used and replenished within a reasonably short period of time (less than six (6) months). The target range to be maintained in the Near-Term Reserve Fund is equal to four to six (4 6) months of the average operating costs over the past trailing three years. The calculation of average monthly operating costs includes all recurring, predictable expenses such as salaries and benefits, occupancy, office, travel, program, and ongoing professional services. Depreciation, in-kind, and other non-cash expenses are not included in the calculation. The calculation of average monthly expenses also excludes one-time or unusual expenses and capital purchases. The amount of the Near-Term Reserve Fund target minimum will be calculated each year after approval of the annual budget, reported to the Board of Directors and included in the regular financial reports. I.4 LONG-TERM RESERVE The Long-Term Reserve is intended as a source of internal funds in the event of an unanticipated loss of a major revenue source such as the Offshore Technology Conference or uninsured losses so that operations can be maintained until a replacement revenue stream is developed or operations can be adjusted accordingly. The target range to be maintained in the Long-Term Reserve will be equal to thirty to thirty-six (30-36) months of average operating costs. The amount of the Long-Term Reserve Fund target will be calculated no less than every five (5) years and no more than every three (3) years, after approval of the annual budget in the year of review, reported to the Board of Directors, and included in the regular financial reports. I.5 ACCOUNTING FOR RESERVES The Near-Term Reserve Fund and the Long-Term Reserve Fund will be recorded collectively in the financial records as Board Designated Reserves. These Funds will be managed, overseen and invested by the RWMC as detailed in APPENDIX J. I.6 FUNDING OF RESERVES The Designated Reserves may be funded with annual operating surpluses, unrestricted legacies/bequests/memorials (if any), earnings on investments and other sources the Board of Directors may deem to be appropriate.

34 I.7 USE OF BOARD DESIGNATED RESERVES Use of the Board Designated Reserves ( Reserves ) requires that the Board of Directors identify the need for access to Reserves and confirm that the intended use is consistent with their purpose as stated in sections I.4 and I.5. This step requires analysis and investigating the availability of any other sources of funds before accessing Reserves, and evaluation of the time period that the funds will be needed and replenished. I.8 NEAR-TERM RESERVES SPENDING AUTHORITY The MTS Board has the sole authority for approving the use of the Near-Term Reserve Funds. This decision will be made in consultation with the RWMC and VP Finance. Accompanied by an analysis of the use of funds shall be plans for replenishment to restore the fund to the target minimum amount. After review and approval by the Budget and Finance Committee, the request will be submitted to the full Board of Directors for final approval. I.9 LONG-TERM RESERVES SPENDING AUTHORITY The MTS Board has the sole authority for approving the use of any of the Long- Term Reserve Fund. This decision will be made in consultation with the RWMC and VP Finance. A motion, accompanied by the analysis and determination of the use of funds and plans for replenishment to restore the Fund to the target minimum amount must be approved by the full Board of Directors. The organization s goal is to replenish the funds used within twelve (12) months to restore the Long-Term Reserve Funds to their target minimum amounts. If the use of Reserves will take longer than twelve (12) months to replenish, the request will be scrutinized more carefully. After review and approval by the Budget and Finance Committee, the request will be submitted to the Board of Directors for final approval. At any time that a borrowing from the Long Term Reserve is outstanding, the status of the borrowing and payments made against the proposed repayment schedule shall be reviewed at the regularly scheduled Board meetings.