Article 8

Section 8.01 Standards for Financial Management • Section 8.02 Fiscal Years • Section 8.03 Development of Strategic Annual Plans and Program Budget • Section 8.04 Financial Statements • Section 8.05 Audit Requirements • Section 8.06 Reporting to SOI • Section 8.07 Financial Management of Sub-Programs • Section 8.08 Accreditation Fees • Section 8.09 Insurance Requirements • Section 8.10 Data Privacy and Security

All LOCs and Accredited Programs shall comply with the standards set forth in this Section 8.01 concerning sound financial management, provided that SOI may grant more flexibility to new and developing Accredited Programs in complying with one or more of these requirements if warranted by the circumstances.

Every Accredited Program shall have written procedures, to be approved by its Board of Directors/Program Committee, for protecting, accounting for, and, if applicable, investing all cash and other assets of the Accredited Program.

Each Accredited Program shall use its assets solely to operate and conduct Special Olympics programs within its jurisdiction per the Uniform Standards. No Accredited Program or LOC shall use any of its funds or other assets raised in the name of or provided for the benefit of Special Olympics for the support or benefit of any other charitable or commercial program, activity, or organization. The preceding sentence specifically prohibits Accredited Programs and LOCs from using any Accredited Program assets or LOC assets, including any funds raised in the name of or for the benefit of Special Olympics, for funding participation in programs or competitions not sanctioned by the Special Olympics program.

Each Accredited Program shall implement reliable internal control systems for recording and accounting for the receipt and expenditure of funds. These systems must be sufficient to guard against unauthorized and fraudulent acts and permit the Board of Directors/Program Committee, Executive/Program Director, and outside auditors of the Accredited Program to rely on these systems with confidence for financial management and decision-making.         

Each Accredited Program and LOC shall have an established accounting system that complies with generally accepted accounting principles and standards, as articulated from time to time by national or international review boards or associations of certified public accountants.

Unless otherwise authorized by SOI, all monetary instruments received by or raised on behalf of an Accredited Program must be deposited into bank accounts opened and maintained solely in the name of that Accredited Program and authorized to be opened for that purpose by written directive of the Accredited Program's Board of Directors/Program Committee. The Accredited Program's Organizational Documents must provide that funds may be disbursed from these accounts only by the specific officials or employees of the Accredited Program who are authorized to make withdrawals or disbursements or to sign checks or drafts drawn on these accounts by written directive of the Accredited Program's Board of Directors/Program Committee. All deposits and expenditures from these accounts shall be properly recorded in accordance with applicable accounting principles in the Accredited Program's financial books and records. Accredited Programs that have accredited Sub-Programs must ensure that the accrediting Program retains signature authority over each such account to permit the accrediting Program to access such accounts to ensure compliance with the requirements of Section 7.04(k) and the other Uniform Standards which pertain to the operations of Sub-Programs.

All Accredited Programs shall comply with the laws and regulations of their respective jurisdictions, including but not limited to all laws and regulations which govern taxation, tax-exempt status, financial reporting, authorization to conduct business, and fund-raising activities and practices.

All Accredited Programs shall comply with the conflicts-avoidance policies set forth in Section 5.13.

The books and records of each Accredited Program shall include the combined results, reflected as for a single reporting entity, of all accredited Sub-Programs within that Program's jurisdiction unless otherwise approved in advance by SOI.

The fiscal year recognized by all Accredited Programs and Sub-Programs shall be the calendar year unless otherwise approved in advance by SOI.

Every Accredited Program shall endeavor to develop multi-year plans aligned with SOI’s strategic plans and priorities and prepare a written operational plan for each fiscal year (the "Annual Plan"), setting forth comprehensive goals for the Accredited Program's sports, programmatic, administrative and fund-raising goals, and its growth plans. Each Strategic and Annual Plan shall be prepared following guidelines as to both form and content that may be provided by SOI from time to time and shall be submitted to SOI by a date to be established by SOI.

Each Annual Plan shall include a written budget detailing all revenues and expenditures projected for the coming fiscal year (the "Program Budget”). Each Annual Plan and accompanying Program Budget must be approved before its adoption by the Accredited Program's Board of Directors/Program Committee and submitted to SOI before the start of the year for which it was developed. SOI reserves the right to require an Accredited Program to revise or develop a substitute Annual Plan and Program Budget to the extent that SOI determines it necessary for the Accredited Program’s sound financial management or as a condition for accreditation to that Accredited Program.

Every Accredited Program must develop and maintain accurate financial statements that comply with applicable accounting principles and are prepared in the currency of the nation where the Accredited Program conducts its principal operations. Each Accredited Program must compare its financial statements quarterly with the Program Budget. Each Accredited Program shall prepare annual financial statements per applicable accounting principles for each fiscal year. Such annual financial statements shall be filed with SOI as part of the reporting requirements of Section 8.06.

Each Accredited Program's annual financial statement shall be audited by an independent certified public accountant or an independent accounting professional in the Program’s jurisdiction with recognition in the profession.

The results of all audits required by this Section 8.05 shall be reported in writing to the Accredited Program's Board of Directors/Program Committee. The financial controls and accounting systems used by each Accredited Program must be sufficient to enable the outside auditors of the Accredited Program to give their unqualified written opinion that those financial statements fairly reflect, in all material respects, the financial condition of the Accredited Program. SOI will review the appropriateness of continuing to accredit any Accredited Program if its independent auditors are unable to express an unqualified opinion concerning the review of the Accredited Program's financial statements for a given fiscal year. In such cases, SOI must be satisfied that the Board of Directors/Program Committee of the relevant Accredited Program has taken immediate and effective action to correct the deficiencies in control that precluded the Program's auditors from issuing an unqualified opinion. If the Accredited Program's outside auditors express a qualified opinion concerning the Accredited Program's financial statements, the Board of Directors/Program Committee of the Accredited Program shall promptly notify SOI of that fact in writing and outline a detailed plan of action and timetable for eliminating the deficiencies which led to the auditors' qualified opinion.

With SOI's prior written approval, an Accredited Program may arrange for the review of its financial statements to be conducted in the form of a financial review by an independent certified public accountant rather than an audit if the fees for an audit are reasonably expected to be greater than four percent (4%) of the Accredited Program's total revenue and other support for the fiscal year to be examined through the review or audit.

1. Waiver of Audit Requirement
   Revenue Less than US $100,000. Programs with total cash revenues less than US $100,000 will automatically receive a waiver from the audit requirement without making a request. SOI may withdraw this automatic waiver and require audited financial statements by sending written notice to affected Programs.
2. Revenue More than the US $100,000
   For Programs with total cash revenues of more than US $100,000, a compliance waiver may be requested if obtaining a financial audit will cause significant hardship. Waiver requests must be in writing and submitted to the Program's regional Organizational Development representative directly or through the online accreditation system. Each waiver request should include (1) the reason the waiver is needed, (2) the length of the requested waiver, and (3) the Program's plan to meet the audit requirement by the end of the waiver period. Waivers must be recommended by the regional President and approved by the Chief Legal Officer ("CLO") and Chief Financial Officer ("CFO").
3. Unaudited Statements
   If the audit requirement is waived, financial statements must be as consistent as possible with generally accepted accounting practices during the waiver.

SOI may require an Accredited Program to provide SOI with periodic reports, at reasonable intervals, concerning its finances and financial operations to enable SOI to ensure that the Accredited Program can discharge its obligations under the General Rules and is in compliance with the Accreditation Standards.

No later than six (6) months following the end of each fiscal year, or by the date (if later than six (6) months following the end of the fiscal year) when the Accredited Program must file any annual tax return, financial statement or other forms of financial report required by the laws of its jurisdiction, each Accredited Program shall provide SOI with an annual report, which shall be in such form as SOI may request from time to time and shall include copies of the following documents:

1. The Accredited Program's audited financial statements, including a balance sheet, a statement of support, revenue, and expenses, a statement of changes in fund balances, a statement of changes in financial position, a statement of functional expenses, and
2. All appropriate footnote disclosures or other explanatory information required by applicable accounting principles to properly understand and interpret the financial statements plus the transmittal letter and management letter, if any, from the auditor;
3. A year-end Program Budget, which compares actual revenues and expenses to the budget provided to SOI according to Section 8.03 above before the start of that fiscal year;
4. A written inventory, the accuracy of which is certified in writing by the Accredited Program's Board of Directors/Program Committee, listing all assets owned by the Accredited Program (including but not limited to bank accounts, leases, contracts, personal property, real estate, intangible assets, and any other asset recognized as such under the applicable accounting principles of the Program’s jurisdiction);
5. A written report on the Accredited Program's success in achieving the programmatic, administrative, and fund-raising goals set forth in its Strategic Plan and its Annual Plan, with an explanation as to reasons why any specific goal was not achieved;  and
6. A copy of the annual tax return or informational tax return filed by the Accredited Program with the governmental authorities in its jurisdiction, which oversee tax or other financial matters.

Each Accredited Program is responsible, as a condition of obtaining and maintaining its accreditation, for ensuring that all of its respective Sub-Programs conduct their affairs in accordance with the financial management and reporting standards outlined in this Article 8. SOI reserves the right to review the financial affairs and accounting controls of a particular Sub-Program independently and to take appropriate action based on the results of that review, whether conducted on SOI's initiative or at the request of the accrediting Accredited Program.

SOI may impose accreditation fees on all Accredited Programs ("Accreditation Fees") and require each Accredited Program to pay such fees on a timely basis as a condition for obtaining or maintaining that Program's accreditation. SOI shall calculate, invoice, and collect Accreditation Fees from Accredited Programs, and otherwise administer and enforce all aspects of its Accreditation Fee system, in accordance with uniform written standards approved by SOI's Board which shall be distributed to all Accredited Programs.

(a) General Insurance Requirements.
Every Accredited Program and LOC is required to obtain and maintain appropriate insurance to protect it from the risk of potential liability to third parties and to protect against loss or damage to the property of the Accredited Program or LOC. All such insurance arrangements made by Accredited Programs and LOCs are subject to SOI's ongoing approval and the requirements of this Section 8.09.

[SEE U.S. SPECIFIC RULES FOR SECTION 8.09 (b)]

This section shall be reserved for new recommendations submitted by SOI legal and its teams on data privacy and security. SOI will furnish so programs with guidance and recommendations on data privacy and security and require programs to ensure that data is secure and compliant with local laws.