Tennessee § 3-17-106 - Financial accounting — Requirements.

§ 3-17-106. Financial accounting — Requirements.

An organization authorized by the general assembly to operate an annual event shall file, within ninety (90) calendar days following the actual event date, a financial accounting with the secretary in accordance with this section. An organization shall remit to the secretary the full application fee specified pursuant to § 3-17-104(c)(2), less the initial application fee paid pursuant to § 3-17-104(c)(1) with the submission of the financial accounting. A financial accounting must not be accepted by the secretary unless accompanied by the fees required pursuant to § 3-17-104(c). An organization that fails to file its financial accounting in accordance with this section may be assessed a late fee of twenty-five dollars ($25.00) for each month, or portion thereof, that the accounting is late. The late filing fee shall accompany every late-filed financial accounting. If an organization fails to timely file the required financial accounting in any two (2) of three (3) consecutive annual event periods, the organization may, in the discretion of the secretary, be disqualified from filing future annual event applications, which decision is subject to the review and appeal procedures provided in § 3-17-105(g) and (h). For events grossing fifty thousand dollars ($50,000) or less, the organization shall file a financial accounting, on a form prescribed by the secretary, showing the following: The gross amount of money received from the annual event; The amount of money expended by the organization including, for amounts exceeding one hundred dollars ($100), the name and address of the payee, the category of expense, and the amount expended; The amount of money disbursed, or to be disbursed, to the charitable programs or purposes of the nonprofit organization including, but not limited to, sufficient documentation indicating that all of the gross proceeds, less any amount expended pursuant to § 3-17-103(a)(5)(B), have been used, or have been earmarked, for the purposes or programs described in § 3-17-104(e)(6); and A list of all prize winners, including their names and addresses, of cash, goods or services valued at more than fifty dollars ($50.00) and the prize received. For events grossing more than fifty thousand dollars ($50,000), the organization shall file an audited financial statement prepared by an independent certified public accountant or an independent public accountant, on a form prescribed by the secretary, showing the following: The gross amount of money received from the proceeds of the annual event; The amount of money disbursed, or to be disbursed, to the charitable programs or purposes of the nonprofit organization including, but not limited to, sufficient documentation indicating that all of the gross proceeds, less any amount expended pursuant to § 3-17-103(a)(5)(B), have been used, or have been earmarked, for the purposes or programs described in § 3-17-104(e)(6); An itemized list, including the name and address of the payee, of the amounts spent for all expenses; provided, that individual expenses of one hundred dollars ($100) or less may be listed as miscellaneous expenses, by category, so long as the aggregate sum of all miscellaneous expenses is less than five thousand dollars ($5,000); and A list of all prize winners, including their names and addresses, of cash, goods or services valued at more than fifty dollars ($50.00) and the prize received. In the case of an annual event held jointly by two (2) or more nonprofit organizations as provided in § 3-17-103(a)(4), the financial accounting filed pursuant to this section shall be based on the gross amount of money jointly received and shall, in addition to the applicable requirements of subsection (b) or (c), show the amount disbursed, or to be disbursed, to each participating nonprofit organization. Such organizations may file the same financial accounting; provided, that the signature requirements of subsection (e) are satisfied. For events grossing fifty thousand dollars ($50,000) or less, all financial accountings required by this section shall be signed by the chair, president or chief administrative officer of the nonprofit organization and the preparer of the report, or, if the chair, president or chief administrative officer is the preparer of the report, by such person and by one additional officer of the nonprofit organization. For events grossing more than fifty thousand dollars ($50,000), all financial accountings required by this section shall be signed by the chair, president or chief administrative officer of the nonprofit organization and the preparer of the report. Such persons shall certify under oath and subject to criminal penalties, including perjury, that the information contained in the report is a true and accurate accounting of the funds received and expended during operation of the annual event. A nonprofit organization that has received authorization to conduct an annual event, or conduct an annual event at multiple locations, may, at the discretion of the organization, cancel an annual event, or, if authorized at multiple locations, cancel a location of the annual event; provided, that: An affidavit from the nonprofit organization's chair, president or chief administrative officer is filed with the secretary and the chief law enforcement officer of the county or municipality stating that the annual event, or a location of a multiple location annual event, is cancelled, and the nature of the cancellation, within ten (10) calendar days of the decision to cancel the event or location. Such cancellation shall be posted on the web site of the secretary. Notwithstanding any provision of this chapter to the contrary, if a single location annual event is cancelled, no other notice to the chief law enforcement officer of the county or municipality or a financial accounting shall be required, except as provided in subdivision (f)(1)(B); if a location of a multiple location annual event is cancelled, no other notice to the chief law enforcement officer of the county or municipality of the cancelled location is required; and If cancellation occurs after the commencement of the sale of tickets, shares, chances or similar records, a full refund is offered for at least ninety (90) days following cancellation; provided, that if a location of a multiple location annual event is cancelled, only tickets, shares, chances or similar records for the cancelled location shall be required to be offered for at least ninety (90) days following cancellation. If a different value level or tiered pricing annual event is cancelled, any refund shall be for either the actual amount received by the organization as evinced by the record of each sale or, if such record is lost or destroyed, the highest value level or tiered price charged on a per ticket, share, chance or other similar record basis. A nonprofit organization shall give reasonable public notice of cancellation in the area in which tickets, shares, chances or similar records were sold, including the terms of the refund offered. Such terms shall be included in the affidavit required pursuant to subdivision (f)(1)(A), including a mailing or physical address to submit a refund claim; and, within ninety (90) days of cancellation of an annual event, or a location of a multiple location annual event, the organization shall file an accounting of tickets sold, refunds made and ticket proceeds remaining with the secretary and the chief law enforcement officer of the county or municipality. Any remaining ticket proceeds shall be used in furtherance of the charitable purposes or programs described in § 3-17-104(e)(6) of the organization's annual event application. No annual event cancelled pursuant to this subsection (f) may be conducted during the annual event period. No multiple location annual event for which a location is cancelled pursuant to this subsection (f) may be conducted at such cancelled location during the annual event period. Notwithstanding any other provision of this section to the contrary, for authorized annual events whose gross revenue does not actually exceed five thousand dollars ($5,000), the organization shall file a financial accounting, on a form prescribed by the secretary, including the following: The gross amount of money received from the annual event; The amount expended for prizes and administrative costs; and The amount of money disbursed, or to be disbursed, to the charitable programs or purposes of the nonprofit organization. [Deleted by 2018 amendment.] Acts 2004, ch. 476, § 2; 2005, ch. 207, § 16; 2007, ch. 18, §§ 11, 12; 2014, ch. 699, §§ 17-24, 26; 2015, ch. 134, § 17; 2018, ch. 584, §§ 5, 6. Compiler's Notes. Acts 2004, ch. 476, § 13 provided that the provisions of the act shall not be construed to be an appropriation of funds and no funds shall be obligated or expended pursuant to the act unless such funds are specifically appropriated by the general appropriations act. Acts 2014, ch. 699, § 27 provided that the act, which amended this section, shall not be construed as rescinding authorization, prohibiting or otherwise altering the requirements for annual events authorized by the One Hundred Eighth General Assembly for the annual event period beginning July 1, 2013, and ending June 30, 2014, and the annual event period beginning July 1, 2014, and ending June 30, 2015. Acts 2014, ch. 699, § 28 provided that the act, which amended this section, shall apply to annual event applications submitted, and annual events authorized, on and after July 1, 2014. Amendments. The 2014 amendment added (a)(2); substituted “fifty thousand dollars ($50,000)” for “thirty thousand dollars ($30,000)” in the introductory paragraph of (b) and in the first and second sentences of (e); substituted “§ 3-17-104(e) (6)” for “§ 3-17-104(a)(19) ” at the end of (b)(3) and (c) and near the end of the last sentence in (f)(1)(B); added the second sentence in (f)(1)(B); and, in (g), substituted “whose gross revenue does not actually exceed five thousand dollars ($5,000),” for “conducted pursuant to applications filed under §§ 3-17-103(f) and 3-17-104(e) ,” in the introductory language of (1), and substituted “submitted contemporaneously with an updated financial accounting report prepared in accordance with the financial accounting requirements of subsections (b)-(e)” for “submitted with the financial accounting report” at the end of (2)(A). The 2015 amendment substituted “nonprofit” for “501(c)(3)” throughout the section. The 2018 amendment added the second and third sentences in (a)(1); and deleted former (g)(2) which read: “(2)(A) If the secretary determines that the gross revenue reported in subdivision (g)(1) exceeds five thousand dollars ($5,000), the nonprofit organization shall remit to the secretary the full application fee as required pursuant to § 3-17-104(c)(2) , less the reduced fee remitted with the annual event application. Any payment to be remitted pursuant to this subdivision (g)(2)(A) shall be submitted contemporaneously with an updated financial accounting report prepared in accordance with the financial accounting requirements of subsections (b)-(e).“(B) An organization required to remit an additional payment pursuant to subdivision (g)(2)(A) shall, in the next annual event application period, pay the full application fee as required pursuant to § 3-17-104(c)(2) .” Effective Dates. Acts 2014, ch. 699, § 28. July 1, 2014. Acts 2015, ch. 134, § 28. April 14, 2015. Acts 2018, ch. 584, § 7. March 20, 2018.