| (a) An organization must maintain and upon request
make available to a representative of the Commission or designee:
(1) a copy of the organization's organizing documents;
(2) other enabling documents, any amendments and any
adopted bylaws which provide in writing the specific cause, deed or
activity that is consistent with the organization's purposes and objectives
for which bingo net proceeds will be used; and
(3) a copy of the applicant organization's four most
recently filed Internal Revenue Service Form 990, if applicable.
(b) The Commission may request supplemental information
from an organization in order to substantiate compliance with the
Bingo Enabling Act, §2001.454.
(c) Record Keeping:
(1) In accordance with the Bingo Enabling Act, the
licensed authorized organization must have documentation for all proceeds
used for charitable purposes to substantiate the use of the funds
for purposes consistent with the exempt purposes of the licensed authorized
organization.
(2) All distributions for charitable purposes must
be made from the bingo checking account. A distribution made from
the bingo checking account into another account maintained by the
organization must be substantiated with documentation and used for
a cause, deed, or activity dedicated to the charitable purposes of
the organization consistent with the 26 U.S.C. §501 tax exemption
of the organization or the purposes or objective for which the organization
qualifies as an authorized organization.
(3) Accounting units must make distributions for charitable
purposes from the unit bingo checking account to the unit member.
The unit member must maintain sufficient documentation to verify the
disbursed funds were used for its charitable purposes.
(4) A licensed authorized organization must maintain
bank statements, canceled checks and deposits slips or images of them,
and bank reconciliations for all accounts to which it deposits charitable
distributions from the proceeds of bingo.
(5) A licensed authorized organization must maintain
documentation for all charitable distributions made to individuals
or other organizations. These may, but are not required to include:
(A) the complete name, address, phone number, and contact
person for the individual or organization receiving the donation;
and
(B) an invoice, receipt, thank you note, or other written
acknowledgement of the distribution including the date and amount
of the donation.
(6) A licensed authorized organization must maintain
documentation for all charitable distributions used for its exempt
purposes. Documentation may, but is not required to include:
(A) invoices, receipts, or other proof of payment for
actual expenses incurred for these purposes; and
(B) calendars, floor plans, or other information used
to pro-rate any expenses where only a portion of the expense is considered
a legitimate exempt use of charitable distributions.
(7) A licensed authorized organization must maintain
documentation for all charitable distributions as to how the use of
the funds relates to the cause, deed, or activity dedicated to the
charitable purposes of the organization consistent with the 26 U.S.C. §501
tax exemption of the organization or the purposes or objective for
which the organization qualifies as an authorized organization.
(8) A licensed authorized organization must maintain
minutes of any meeting where the use of bingo proceeds or other activities
related to the conduct of bingo is discussed.
(9) An organization transferring funds to its bingo
account in accordance with §2001.451 of the Act must maintain
documentation showing that the transferred funds were not originally
bingo proceeds.
(10) A licensed authorized organization must maintain
for four years records to substantiate the use of net proceeds.
(11) Reimbursement or direct payment for member or
employee travel expenses will only be considered as used for the charitable
purposes of the organization if the following records are provided
to the Commission upon request:
(A) the itinerary of a seminar, convention, or retreat
showing that the purpose of the seminar, convention, or retreat was
primarily to discuss the charitable functions and purposes consistent
with the 26 U.S.C. §501 tax exemption of the organization or
the purposes or objective for which the organization qualifies as
an authorized organization; and
(B) the original or true and correct copies of receipts
and cancelled checks showing the date and amount of the contribution
for actual out-of-pocket reasonable or necessary expenses such as
hotel, airline tickets, meals, etc., and the corresponding request
for payment or reimbursement maintained by the organization.
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| Source Note: The provisions of this §402.502 adopted to be effective March 21, 2005, 30 TexReg 1630; amended to be effective April 24, 2011, 36 TexReg 2388; amended to be effective October 22, 2020, 45 TexReg 7414 |
