Financial Management Policy

Transcription

1 Financial Management Policy POLICY STATEMENT: Hastings Early Intervention Program Inc. is required by the Associations Incorporation Act 2009 to keep proper financial records, ensure financial probity and submit an annual audit to the Department of Fair Trading. HEIP is committed to effective management of the organisation s finances, the prevention of fraud or mismanagement of its funds and accountability to our members for the use of organisational funds and to funding bodies or donors for the funds they have provided. HEIP will: maintain appropriate records of financial transactions and accounts that comply with the Australian Accounting Standards implement a system of approvals for financial transactions document delegations of authority for approving financial expenditure ensure safeguards are in place to prevent fraud and financial mismanagement provide staff who are responsible for bookkeeping and financial management with relevant documented financial procedures. Policy context: This policy relates to Standards or other external requirements NSW DSS: Standard 6 Service Management. Legislation or other requirements Associations Incorporation Act 2009 NSW Dept. of Liquor, Gaming & Racing (Charitable Fundraising Act 1991) Contractual obligations NSW Dept Of Education and Communities Intervention Support Program Funding Agreement. NSW Family and Community Services - ADHC Funding Agreement and Acquittal Guide. Bank Accounts Hastings Early Intervention Program Inc. currently maintains the following accounts with The Commonwealth Bank. These accounts and their purpose are as follows; Society Cheque Account # Everyday cheque account for deposits of fees and grants, payments of expenses, payroll and administrative costs. An EFTPOS system is linked to this account for payment of fees. Business Online Saver # Online Saver deposit of reserve monies.

2 The Management Committee must approve the opening and closing of any bank account and the investment of funds. A transfer of funds between any two HEIP accounts will require the approval of the Management Committee. This approval will be in the form of motions passed at a Management Committee meeting. PROCEDURES Maintaining appropriate records Financial records will be kept according to Australian Accounting Standards. Financial records will be maintained in the following manner: Transactions will be recorded electronically using accounting software MYOB/Account Right Plus Electronic entry of transactions will be carried out by the Administrator. Accounts will be reconciled monthly by Administrator and presented to the Director for verification. Hard copy primary records will be maintained by the Administrator in appropriate folders Financial records will be archived for a period of 7 years. Processing transactions All accounts and monies will be dealt with promptly and within reasonable time frames. Accounts Receivable: The Administrator will manage all accounts receivable through MYOB and: send out invoices for fees once per term and reminder notices as required. process payments received and bank deposits. issue receipts on payments made. maintain documentation. The Director is able to receive fees in any form, receipt them and place them in the locked cash drawer. The Administrator then process the payment through MYOB. Other staff are able to receive money or cheques for fees if the Director or Administrator are not available. These are then placed in an envelope with the clients name, amount and signature in the locked cash drawer to be receipted and processed through MYOB by the Administrator.

3 Accounts Payable: The Administrator will manage all accounts payable and: ensure all purchases have the necessary approval before processing process payments to creditors either by cheque, credit card or electronic funds transfer (EFT) issue a remittance advice to a creditor when an EFT payment is made where necessary. Approvals and delegations All expenditure must be approved by the appropriate delegated person or people. Delegations of authority for expenditure are set by the Management Committee. The Management Committee approves the annual budget which sets the parameters for annual expenditure. Expenditure within budget and up to $500 requires authorisation by the Director. Other than the payroll transaction, PAYG, Superannuation, Insurance and BAS payments, and other ongoing accounts such as electricity etc, expenditure within budget and over $500 requires the authorisation by the Management Committee. In emergency situations the President can approve the expenditure and it will be tabled at the next committee meeting. Any item of expenditure that is a budget overspend above $500 requires authorisation by the Management Committee as outlined above. In emergency situations the President can approve the expenditure and it will be tabled at the next committee meeting. All cheques must be signed by any two of the people who are authorised signatories. These include the Director and two committee members as nominated by the Management Committee each year. Cheques are presented to the signatories for signing accompanied by the invoices. All EFT payments must be presented by the Administrator, to the Director, as Unprocessed Electronic Payments along with the invoices being paid. The Director will then sign the payment summary to authorise the payments before they are processed. All electronic transfers are processed using two CommBiz Security Tokens which are password protected. The Administrator and the Director are authorised by the bank to operate these tokens. These tokens are kept separately in two locked drawers. No payments can be made without this 2-step, 2-to authorise process. Preventing fraud and financial mismanagement Financial management security is maintained through: Procedures for obtaining and documenting approval for expenditure. (As stated above) The receipting and reconciling of all money received by the organisation with banking records.(as stated above)

4 Monitoring and checking of accounts and bank reconciliations by the Director and Treasurer. A regular finance report by the Treasurer to the Management Committee at each Committee Meeting Monitoring of the budget by the Director and the Management Committee. *Payment of Wages Wages are paid fortnightly and adjustments to ordinary hours are made from written changes that are recorded by staff on their wages sheet. The Administrator reviews these wage sheets and records the hours staff have worked onto the Timesheet Form and signs it. The Director reviews this Timesheet and co-signs to authorise payment of wages according to these hours Wages are processed through MYOB payroll by the Administrator.These are then processed through the Commonwealth Bank online system, CommBiz, as outlined above. (ie the 2-step, 2-to authorise process.) Payroll Advice and Payroll Summary Reports are generated and filed in the appropriate folder for review by the external auditor. All staff are paid via electronic banking methods. No cash payments are made to staff for wages. Confidential sealed pay slips are provided to each staff member. Superannuation payments are made to the staff s nominated schemes each pay period. These are generated fortnightly but paid monthly. As HEIP is classified as a Public Benevolent Intitution all staff have the opportunity to Salary Package part of their wage each fortnight to a Westpac Employee Benefits card. This salary packaging is capped at an annual amount of $16,050 and is managed through the payroll by the Administrator. All staff are encouraged to seek independent financial advice before entering into a Salary Packaging agreement. *Accessible Funds (Petty Cash) Credit cards Three staff members have access to a credit card to be used for the purchase of consumable items, fuel, stamps and other items used in the day to day operation of the service. The credit cards are also used for the purchase of resources, payment of bills and staff development as provided for in the budget. The three staff members include the Director, Administrator and a long term staff member of 12 years. All purchases require the proof of a reciept which is then used to reconcile the credit card statement at the end of the month. Theses statements are itemised, receipts are attached and all are required to be checked and signed by the credit card user and signed off by the Director. In the case of the Director s credit card statement the treasurer will check receipts and sign off on the reconciliation. The Credit Card account is paid by automatic Direct Debit in the last week of each month from the Society Cheque Account. Petty Cash The reconciliation of Petty cash is the responsibility of the Administration officer. Procedure is as follows.

5 - A cheque is generated, signed by 2 signatories. - Cheques is cashed for the sum of monies (not exceeding $100). Cash is placed in locked draw in locked cash tin. (Director and Administrator have keys.) - Staff obtain permission from director to purchase goods and are reimbursed by the administrator from petty cash if it is under $30. Receipts must be given to the Administrator and the transaction is recorded in the Petty Cash Book against expenditure. Reciepts are attached. Petty Cash is included in the whole of service audit by an external auditor at the end of the financial year. - If purchases are over $30 a cheque will be generated (and signed by 2 authorised signatories) upon presentation of a receipt for the staff member to be reimbursed. - When Petty Cash Float becomes less than $10 the procedure is started again. *Reports Financial Reports are generated through MYOB/Accounts Right Plus. The following reports are presented by the treasurer to each Management Committee Meeting. - Budget Analysis Profit and Loss - Trial Balance - Standard Balance Sheet *BAS Business Activity Statement (BAS) is reported quarterly to the Taxation Office (ATO). It is prepared in MYOB and paid by cheque. The BAS statement is prepared and paperwork completed for lodgement by the Administrator. This paperwork is attached to the cheque and presented to two authorised signatories to be signed. PAYG Tax is paid monthly by cheque as above. *Accounting Support HEIP accounts are audited annually by an external auditor, currently NorthCorp Accountants. They provide accounting and finanical advice upon request and recommendations following the audit process. The Auditor presents the financial report at the AGM each year. *Budget HEIP operates on a financial year of July 1 st to June 30 th. A budget based on expected funds is prepared each year in collaboration with the Director, Administrator and Treasurer. It is reviewed by the Management Committee and advice sought from the accountant as applicable. Funding is sometimes quite difficult to predict so the budget sometimes needs to be adjusted as funding becomes clearer. The budget is reviewed by the Administrator and the Director (and the accountant at times) and then presented to the Management Committee for adjustment. All decisions which impact on the budget are made by the Management Committee at a Committee Meeting. Ratified: