A Memorandum of Understanding (MOU) or Fiscal Agent Agreement is used to identify the relationship between a watershed group and its fiscal manager. Many watershed groups do not have tax-exempt status and therefore must establish such a relationship for the purpose of tracking financial records according to standard practices. Tax-exempt status requires the organization to produce these records with or without a fiscal manager.

The following components can be found in every effective MOU or Fiscal Agent Agreement:

Purpose (Reason for creating the MOU.)

This section states the big picture of why and how the two parties came together. List the various activities that will be addressed in this relationship.

Background and Authorities (State law or other ordinance calling for the formation of such entities.)

Here is a place to describe the physical boundaries of the relationship and what prompted the formation of each entity. Provide a brief description of the composition of each entity and when each was formed.

Common Vision (Briefly describe the agreed upon common goals for the geographic area described above.)

A common vision can provide further reason for this relationship than fiscal management. A common vision can provide the motivation for working collaboratively and can be stated as such in this section.

Roles and Responsibilities (Mutually and individually.)

Identify the mutual and joint responsibilities (collaborative tasks) and the result of those joint efforts such as producing an education and outreach plan. In addition, list the specific roles and responsibilities of each entity, which will clarify the purpose of the MOU.

This final segment identifies the effective date of the agreement, its term (if there is one), and how the agreement can be modified or terminated. Spaces are provided for names, signatures, and dates.