Example Accounting/Financial Policies

Transcription

1 Example Accounting/Financial Policies TABLE OF CONTENTS INTERNAL CONTROLS... 2 ACCESS TO RECORDS BY MEMBERS... 3 ACCOUNTING COMPUTER FILE BACK-UP PROCEDURE... 3 ACCOUNTING METHOD... 3 AUDIT COMMITTEE... 3 BANK RECONCILIATIONS... 3 BARTERING PROHIBITED... 3 BID REQUIREMENTS... 4 CHART OF ACCOUNTS... 4 CHECK DISBURSEMENTS... 4 CHECK ENDORSEMENT/STAMP... 4 CHECK SIGNERS... 4 CLEARING ACCOUNTS... 5 COMPUTER PASSWORDS... 5 CONTRACT SIGNING AUTHORITY... 5 CONTRIBUTIONS... 5 CONTROL OVER CHECKS AND CASH... 5 CPA FIRMS... 5 CREDIT CARDS... 6 DATE- AND TIME-RECEIVED STAMP... 6 DEPRECIATION... 6 ENDOWMENT FUNDS... 6 FEDERAL IDENTIFICATION NUMBER... 6

2 FINANCIAL STATEMENT PREPARATION AND DISTRIBUTION... 6 FRINGE BENEFITS... 6 INDEPENDENT CONTRACTORS... 6 INVESTMENT POLICY... 6 LEASES... 7 LOANS PROHIBITED... 7 LOGO... 7 LONG-TERM DEBT... 7 MAILING LIST POLICY... 7 MANDATORY VACATIONS/LEAVE... 7 NONSUFFICIENT FUNDS CHECKS... 7 PAYROLL... 7 PETTY CASH FUND DISBURSEMENTS... 7 RECORDS RETENTION AND DESTRUCTION... 8 REFUNDS... 8 REQUESTS FOR NEW POLICIES AND PROCEDURES... 8 SEGREGATION OF DUTIES... 8 TEMPORARY EMPLOYMENT AGENCIES... 8 TIME SHEETS... 8 TRAVEL ADVANCES... 8 VOIDED CHECKS... 9 Internal Controls Use of prenumbered Checks Checks are matched against open invoice files

3 Bank Statements reconciled on a monthly basis by an employee Treasurer of the Board independent of writing checks Separation of Duties Monthly Financial Statements to Board of Trustees Checks over $1,000 $ require two signatures; monthly cash disbursement journals reviewed by two board members Payroll services and tax preparation carried out by independent agent. Annual audit by independent CPA firm. Access to Records by Members It is the policy of the organization to allow members and the general public to inspect the following records of the organization: 1. IRS Form Original applications for tax-exempt status 3. Audited financial statements Accounting Computer File Back-Up Procedure It is the policy of the organization to maintain a computer file back-up system for accounting records as follows: At the end of each business day, every employee s computer files will be backed up. The employee will place one copy of the back up in the fire safe. Accounting Method It is the policy of the organization to use the accrual basis of accounting that recognizes revenues when they have been earned and expenses when they have been incurred. Audit Committee It is the policy of the organization that the Finance Committee of the Jackson Nonprofit Support Center Board of Trustees will serve as the audit committee. The treasurer will chair the committee, ensure corrective action is taken when necessary, and report on audit committee action to the board of trustees. Bank Reconciliations It is the policy of the organization to address bank statements to the executive director, Treasurer of the Board who will do an initial review of checks that cleared during the prior month. Within 24 hours, the executive director Treasurer of the Board will forward the bank statement to the administrative assistant Executive Director responsible for bank reconciliations. This individual cannot be a check signer. The bank reconciliation will be distributed with the internal financial statements and will include documentation of voided checks. Bartering Prohibited It is the policy of the organization to prohibit entering into bartering agreements with members whereby dues are forgone in exchange for goods or services provided by the member. Any other type of bartering agreement in any form is also prohibited.

4 Bid Requirements It is the policy of the organization to require bids for the following expenditures: Printing Three bids are required for all printing expenditures exceeding $500. Capital Purchases Three bids are required for all capital purchases exceeding $1,000. Inventory Purchase Three bids are required for all inventory purchases exceeding $500. Professional Services Professional services, including CPA firms and law firms, will be evaluated every three years, and requests for proposals will be prepared and sent to qualified firms in the same field. Other All other expenses exceeding $500. The decision to approve a vendor will be made by the executive director. Chart of Accounts It is the policy of the organization to maintain a chart of accounts. All employees involved with accounting coding responsibilities or budgetary responsibilities will be issued a chart of accounts based on the uniform chart of accounts from the state, and the chart of accounts must be updated on a routine basis. Check Disbursements It is the policy of the organization to keep unused check supplies safeguarded under lock and key. Signed checks that have not been mailed or distributed will be put under lock and key at the end of each day. Check Endorsement/Stamp It is the policy of the organization to endorse checks with a stamp(s) as follows: For Deposit Only Full Organization Name Bank Name Account Number Check Signers It is the policy of the organization to give check-signing authority to the following positions: Executive Director Chair, Board of Trustees Treasurer, Board of Trustees Checks issued for payment of the organization s debts over $ will require two signatures of individuals. Monthly cash disbursement reports will be reviewed by no less than two (2) board trustees. Additionally, individuals involved with check preparation and bank reconciliations are prohibited from having check-signing authority.

5 Clearing Accounts It is the policy of the organization to use clearing accounts for fringe benefits expenses, photocopy expenses, telephone expenses, occupancy expenses, credit card payments, and rent payments. Computer Passwords It is the policy of the organization to assign unique computer passwords to each individual who has access to the computer system. Passwords of terminated employees will be canceled immediately. A master record of employee passwords will be maintained by the executive director. Contract Signing Authority It is the policy of the organization to grant authority to sign contracts to executive director, as long as the bid does not exceed the limits of a bid requirement and the financial implications of the contract are included in the organization's budget. If the financial implication of signing a contract is not included in the organization s budget, board of directors' approval is required before authority to sign the contract is granted. Contributions It is the policy of the organization to send thank you letters on the organization's letterhead acknowledging all contributions, regardless of the amount. The letters will indicate the dollar amount contributed. Control Over Checks and Cash It is the policy of the organization that all incoming mail will be imprinted with a date- and time-received stamp. Checks will be endorsed with the deposit only stamp. All checks received will be deposited within one week. CPA Firms Audited Financial Statements It is the policy of the organization to direct the chief executive officer to distribute the audited financial statements to the board of trustees. The decision to publish the statements or otherwise make them available to the membership will be made by the board at its meeting following the issuance of the statements. The Engagement Letter It is the policy of the organization to review the draft of the CPA engagement letter before it is signed to ensure it covers matters important to management. The Management Letter It is the policy of the organization to discuss the CPA management letter with representatives of the auditing firm and to direct staff as to the appropriate action required to correct deficiencies addressed. Distribution of the management letter to individuals or firms other than those entitled to a copy by contractual obligation is left to the discretion of the executive director. Selection of Firm It is the policy of the organization to contract with the CPA firm selected to audit the organization annually. A minimum of three bids will be sought to indicate the firm most qualified and cost effective.

6 Credit Cards It is the policy of the organization to issue a credit card to the Executive Director for business use only not to exceed $2,000.-should this be less? Date- and Time-Received Stamp It is the policy of the organization to stamp the mail with a date- and time-received stamp. Depreciation It is the policy of the organization to depreciate fixed assets other than real property and electronic equipment using the straight line method over a 10-year period. Real property will be depreciated using the straight line method over a 30-year period. Electronic equipment will be depreciated using the straight line method over a 5-year period. Capitalized repairs and improvements will be depreciated using the straight line method based on an analysis of the time the repair or improvement is expected to improve the property. Fully depreciated fixed assets will remain on the organization's statement of financial position until they are disposed of or otherwise deemed worthless. The Board of Trustees will approve disposal fo any fixed assets. Endowment Funds It is the policy of the organization to include endowment funds in a quarterly report of the organization s statement of financial position. Federal Identification Number It is the policy of the organization to have the organization s Federal Identification Number printed on its invoices, statements, and any other document that may trigger a customer's request for this information. Financial Statement Preparation and Distribution It is the policy of the organization to prepare and distribute monthly financial statements that will include the Statement of Financial Position. These statements will be prepared and distributed within 10 working days after the close of the month. The statements will be distributed to the board of trustees and the executive director. Fringe Benefits Fringe benefits include FICA taxes, unemployment taxes, employee insurance premiums, and pension payments. Independent Contractors It is the policy of the organization to evaluate criteria established by the IRS when assigning individual employee or independent contractor status. Individuals qualifying as independent contractors will sign an Independent Contractor Agreement and will be issued IRS Form 1099 if compensation is $600 or more in a single year. Investment Policy It is the policy of the organization to invest excess cash in the following list of approved investments:

7 Investment Vehicle Certificates of Deposit Bonds Necessary Rating (Note Rating) (Note Rating) The decision to invest cash in approved investments must be made jointly by executive director and the Finance Committee with reporting and approval to the Board of Trustees at the next scheduled meeting. Leases It is the policy of the organization to record leases as either capital leases or operating leases in the financial records, based on appropriate qualification criteria. Loans Prohibited It is the policy of the organization to prohibit loans to employees and members under all circumstances. Logo It is the policy of the organization to include the organization s logo on all forms used by the organization. Long-Term Debt It is the policy of the organization to include the current portion of long-term debt (the amount due to be paid within 12 months) with accounts payable on the financial records. Only the noncurrent portion of long-term debts will be included in the long-term debt section of the financial records. Mailing List Policy It is the policy of the organization to sell membership mailing labels as long as the product or service is of interest to the membership. A discount will apply if the purchaser is a member of the organization. Mandatory Vacations/Leave It is the policy of the organization to require employees to take annual leave due them. Leave is not carried forward. Nonsufficient Funds Checks It is the policy of the organization to include checks returned by the bank because of nonsufficient funds in the accounts receivable, nonsufficient funds account in the accounting records. If the checks in question are eligible for redeposit, the subsequent deposit will reduce the receivable account accordingly. If the checks in question are prohibited from redeposit, the organization s Bad Debts Policy will be implemented. Payroll It is the policy of this orgnization to engage Automatic Data Processing (ADP) as its payroll agent. Petty Cash Fund Disbursements It is the policy of the organization to maintain a petty cash fund of $150.

8 It is the responsibility of the Executive Director and that person's designee to ensure that the petty cash fund is under lock and key at all times. Disbursements from the petty cash fund may only be made for approved expenditures. A receipt must accompany every disbursement. The receipt must be signed by the person receiving the cash and the person disbursing the cash. The petty cash fund will be replenished as needed and at the end of every month. The petty cash fund replenishment check will be made out to the individual primarily responsible for maintaining the fund. The expenses will be reviewed and the resulting check will be signed by two other responsible parties. Records Retention and Destruction It is the policy of the organization to retain records as required by law and to destroy them when appropriate. Refunds Members requesting a refund for dues will be refunded a pro rata share of unused dues less an administrative fee of $50. Refunds are not available for workshops. Refunds for consulting arrangements will be prorated less an administrative fee of $150. Requests for New Policies and Procedures It is the policy of the organization to encourage employee involvement in keeping the Accounting and Financial Policies and Procedures Manual up to date. Employees requesting existing policy changes, addition of new policies, and elimination of existing policies should submit a request in writing to the executive director. Segregation of Duties It is the policy of the organization to work with the organization s independent CPA firm to ensure adequate segregation of accounting duties exist. Suggestions on improving controls through duty segregation will be given serious consideration, and employees will be required to participate in the interest of both the organization and the employee. Temporary Employment Agencies It is the policy of the organization to use temporary employment agencies to supplement the work force during peak periods. Fees paid to hire the employees of temporary employment agencies are included in the wages line item in the financial statements. Time Sheets It is the policy of the organization that all employees complete and sign time sheets for every pay period. Paychecks will not be distributed until approved time sheets have been submitted. Employees will note accurately all regular hours, overtime, and leave hours. Travel Advances It is the policy of the organization to issue travel advances to individuals who have secured the proper travel authorization.

9 These advances are considered account receivables from the individuals, and the proper travel accounts are charged when reimbursements for travel expenses are paid. It is the policy of the organization to establish travel expense limitations and guidelines as follows: Travel Advances Travel advances will be issued if requested at least 30 days before the trip. Personal Mileage Employees will be reimbursed for use of their personal cars on organization business at a rate of per mile (or at the current rate of IRS reimbursement). Commuting mileage will not be reimbursed. Lodging Lodging facilities must be approved by the appropriate manager. Employees will be reimbursed entirely for the basic room charge and applicable taxes. Receipts are necessary. Meals Employees will be on a per diem basis for meals and tips. Current per diem rates are as follows: $6 Breakfast Out of State: $7 Breakfast $8 Lunch $9 Lunch $15 Dinner $20 Dinner These figures include applicable taxes. Receipts are necessary for meals. Tips should be noted on meal receipts. Taxi Actual taxi fares, including tips, will be reimbursed entirely. Receipts are necessary. Tips must be noted on taxi receipts. Tips Reasonable tips for baggage handling will be reimbursed. Receipts are not required. Tips for meals and taxis are discussed elsewhere under these guidelines. Parking and Tolls Parking fees and toll expenses will be reimbursed. Receipts are necessary. Car Rentals Car rentals will be reimbursed if approved in advance. Receipts are required. Travel expense reimbursements will be distributed or mailed within 30 days if properly pre-approved. Voided Checks It is the policy of the organization to maintain a Voided Checks Log and document every check that has been voided, regardless of the reason. If voided checks are physically available, they will be stamped VOID and filed in the organization's Voided Checks File. If voided checks are not physically available, the organization s copy of the bank's stop-payment order will be filed in a Stop-Payment Order File.