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2.a Non-profit status and tax exemption

The Association is a non-stock, non-profit corporation organized and operated exclusively for said purposes. No part of the net earnings of the Association shall inure to the benefit of any individual. No officer, member, or delegate of a member shall, as such, receive compensation except that reasonable compensation may be paid for services of employees of the Association. (Constitution and Bylaws, Article II.B)

MLA will apply for state tax exemption in states where a convention is being held. Application should be made well in advance before the convention budget is prepared. (Minutes, 02/1992, II.5) This application is made by the Administrative Officer.

All MLA chapters have group tax exemption as subordinates of MLA. (Minutes, 02/1993, II

2.b Business Office

MLA has a management agreement with A-R Editions of Middleton, WI to provide accounting and publishing services. MLA pays a management fee to A-R Editions on a monthly basis for this service. Key personnel involved in the internal control structure include: A-R President, MLA Administrative Officer and Assistant Administrative Officer, MLA Fiscal Officer, A-R Administrative Manager, A-R Website Development, Member Services and Database Manager, two AR Administrative Assistants. A-R President and Administrative Manager and MLA Administrative Officer are responsible for overseeing the financial reporting process, including managing the risks of fraud. A-R prepares the financial statements in accordance with the Generally Accepted Accounting Principles (GAAP).

The Business Office, with oversight from the Administrative Officer:
  • Annually bills the members of the association, the non-member subscribers to Notes
  • and the subscribers to all other publications
  • Maintains records for the same
  • Prepares all bulk mailings
  • Fills individual orders for all publications of the Association
  • Prepares mailing lists for sale on order and bills the same
  • Invoices Notes advertising
  • Processes conference registrations and donations
2.c MLA Board of Directors

The MLA Board is responsible for the development and administration of project and program budgets, which are approved each year at the June meeting for the subsequent fiscal year.

2.d Finance Committee

The Finance Committee, a subcommittee of the Board, is responsible for preparation of the annual budget and for monitoring income and expenditures during each fiscal year. They also make recommendations to the Board concerning all matters with fiscal implications including the management of MLA’s investment funds. These recommendations are then reviewed by the full Board and may be amended prior to being voted into policy. The Finance Committee consists of six voting members of which the Fiscal Officer (who serves as the chair of the committee) is specified by the constitution. Others currently designated by the President are the Assistant Fiscal Officer, the Administrative Officer, the Assistant Administrative Officer, and the Vice-President/Past-President. The President customarily meets with the Finance Committee and is a voting member. (Handbook, VI.H.4.b)

2.e Investments Subcommittee

This subcommittee of the Finance Committee tracks and monitors MLA’s investments, provides information and advice to the Finance Committee and Board about investments, and reports on the performance of investments, in accordance with the financial objectives and policies set by the Board and in the context of MLA’s relationships with professional investment advisers. The Subcommittee will periodically evaluate MLA’s risk profile to ensure that it continues to meet the Association’s financial objectives. Membership of the subcommittee consists of: the Administrative Officer (chair); Assistant Administrative Officer; Fiscal Officer, Assistant Fiscal Officer; and three MLA members at large, who serve staggered three-year terms. (Online Board meeting, Dec. 10, 2012)

2.f Legal counsel

The Board, using MLA financial resources, retains a lawyer and also authorizes the President, Vice-President/Past-President, and Fiscal Officers to act on behalf of the Board in discussions with the attorney. (Minutes, 10/1999, X.C.4)

2.g Auditing firm

MLA’s accounting firm is SVA (Minutes, 05/2006, IV).

2.h Dissolution

Should future exigencies make the dissolution of this Association necessary, the properties of the Association shall be disposed of by gift to the University of Maryland at College Park for the exclusive purpose of preserving, developing and maintaining the Music Library Association archives.

2.i Accounts and account signers

MLA maintains the following bank and investment accounts
Checking
Savings
Money market accounts
Certificates of Deposit (occasional, short-term) Investment accounts
Socially responsible investment accounts

The Association’s funds on deposit at any one financial institution shall not exceed the amount
insured by the Federal Deposit Insurance Corporation. (Board minutes, 09/2008, IX.C)

2.j Corporate credit card

Cardholders for the MLA Corporate American Express card may use it to pay for expenses that have been approved as a part of the annual budget. The following Board members and Special Officers are cardholders: Administrative Officer (chief cardholder), President, Vice-President/Past-President, Assistant Administrative Officer, Development Officer, Convention Manager, Assistant Convention Manager, and Publicity Officer. Documentation is required for all purchases made with the corporate card, including purchases that could be ordinarily reimbursed as per diem expenses.

2.k Account authorizations

Authorized signers for checking account: Administrative Officer, Assistant Administrative Officer, Vice-President/Past-President, President
Authorized to make deposits
Checking, Savings, Certificates of Deposit: A-R Administrative Manager
Investment accounts: MLA Administrative Officer, President
Authorized to cut checks: A-R Administrative Manager
Authorized to transfer funds between investment accounts and into checking account: Administrative Officer, with Finance Committee approval
Methods of receiving payments
Membership dues, subscriptions and advertising may be paid by check or credit card. MLA
accepts the following credit cards: Visa, Mastercard, American Express.


The Administrative Officer pays all bills of the Association through checks drawn on the Association’s
checking account, or via electronic transfer.

All requests for payments over $50,000 will be countersigned by the President or Vice- President/Past President, and all requests for payment by the Administrative Officer to the same will be countersigned by the President or Vice-President/Past President as part of the normal
procedures of checks and balances. (Minutes, 02/2001, X.C) Checks need not be countersigned regardless of amount.

The MLA Business Office transfers funds from the designated checking account to the designated short term investment funds when appropriate, in order to obtain the highest possible interest rate on Music Library Association liquid assets. Transfer of funds should depend on the necessary checking account balance based on established cash flow patterns.

2.l Financial records and reports

Financial records of the Association are entered and maintained by MLA’s Business Office (A-R Editions) using Quickbooks Pro 2011 accounting software. The MLA Administrative Officer, Assistant Administrative Officer, and MLA Convention Manager have access to a read-only copy of the
financial database, which is updated monthly or upon request. The Business Office maintains a comprehensive membership database, including payment activity, using Microsoft SQL and Access Software. Backups and reports from the database are sent to the Administrative Officer monthly or on request.

2.m Financial reports

Quarterly reports:
  • Budget reports. All Board members receive copies of the full budget at Board meetings. The Administrative Officer prepares quarterly and annual financial reports of income and expenditures for the Board of Directors. The reports must be clear and demonstrate any problems or significant trends in a manner that requires little explanation. Reports should include current year actual and projected income and expenditures. The report also shows donation and investment income, and realized and unrealized gains and losses in MLA’s investment accounts.
  • Balance sheet. A balance sheet showing the current assets and liabilities of the Association will be included in the financial reports prepared by the Administrative Officer and distributed at all Board meetings.
  • Investments report. An accounting of all activity in the Associations investment accounts will be included in the financial reports prepared by the Administrative Officer at all Board meetings. It will show current balances, deposits and withdrawals from the accounts, and movement of funds between accounts.
Annual reports:
  • Audited financial statements. Once a year, following the annual audit of the Association’s accounts, the Administrative Officer will present to the Board a set of complete financial statements, as prepared by MLA’s auditing firm. These reports include: Statement of Financial Position (Balance sheet, with previous year comparison), Statements of Activities for current and previous years, Statement of Cash Flows and Notes to the Financial Statements. These reports are also published in The MLA Annual Report.
  • Annual report to the membership. The Administrative Officer also presents an annual financial report to the membership at the annual meeting, based on the previous year’s financial statements.
2.n Audit and tax filing

The Administrative Officer works with MLA’s auditing firm to prepare and submit MLA’s annual income tax returns (IRS form 990). SVA provides an annual audit of the Association’s financial records in time for review by the Board at its fall meeting. The Administrative Officer also works
with the auditing firm to prepare and submit IRS form 1099 to report income for members receiving honoraria and/or royalty income from MLA publications.

2.o Debt owed to MLA

The Finance Committee and the Board recognize that it is in MLA’s interest to cultivate good relationships with its pool of advertisers. The Advertising Manager is therefore authorized to work with the customer and the MLA Business Office to accommodate advertisers who are willing pay but are temporarily unable to do so. Such arrangements might entail additional time to pay an invoice
or payment plans spread over some months. These accommodations can be made specific to the circumstances of the customer and the invoice. Accommodations made for one customer do not obligate the Association to make similar concessions in the future. Advertisers who are not responsive or who evince an unwillingness to pay will be sent a final invoice from the Business Office, stating that if they do not bring their account into good standing, they will no longer be able to advertise to the MLA membership. Such customers will also be removed from the Advertising Manager’s list of potential advertisers.

2.p. Approved vendors list

MLA’s auditors recommended the creation of a list of approved vendors to which MLA makes recurring payments, including outside vendors, recipients of honoraria, Board and Committee members, and other recurring payees, but not one-time payees, such as award recipients. The list serves as a check on the Administrative Officers, who will not be able to approve recurring payments without an invoice or bill to entities not on the list. The Assistant Administrative Officer will be responsible for compiling proposed additions to the list; the list will require annual review by the Finance Committee to add and approve new members. The list will be held at the Business Office, which will check it as requests for payments are made. (Board minutes, 05, 2013, 0.9g)