CSM Policy Manual Section 300 Financial
THE COUNCIL OF THE SOUTHERN MOUNTAINS
Accounting & Financial
Policies and Procedures Manual
SECTION 300
Effective Date(s) of Accounting Policies
The effective date of all accounting policies described in this manual is May 1, 2002 with the updated format effective June 19, 2007 and revision effective October 27, 2008. If a policy is added or modified subsequent to this date, the effective date of the new/revised policy will be transmitted by internal memorandum and become part of this manual through changes made to the policy with the date listed at the top of the page. In those instances where the Council’s language and/or policies are incongruous with or in conflict with the current federal dictate, the applicable federal regulatory policy/code shall take precedence. Any questions regarding this policy should be directed to Brenda Melnik, Director of Finance at 862-3144 or the Executive Director, Randal Johnson at the same number.
TABLE OF CONTENTS
Page Number
Introduction 9
GENERAL POLICIES
Organizational Structure 10
The Role of the Board of Directors 10
Committee Structure 10
Finance Committee Responsibilities 10
The Roles of the Executive Director and Staff 11
Finance Office Overview 12
Organization 12
Responsibilities 12
Business Conduct 13
Practice of Ethical Behavior 13
Conflicts of Interest 13
Compliance with Laws, Regulations and Organization Policies 14
Disciplinary Action 14
Fraud Policy 15
Scope 15
Policy 15
Actions Constituting Fraud 15
Other Irregularities 16 Investigation Responsibilities 16
Confidentiality 16
Authority for Investigation of Suspected Fraud 16
Reporting Procedures 17
Security 18
Finance Office 18
Access to Electronically Stored Accounting Data 18
Storage of Back-up Files 18
General Office Security 18
Technology and Electronic Communications 19
Purpose and Scope 19
Acceptable Use of Organization Property 19
Password Security 19
Confidentiality 20
Copyrighted Information 20
Installation of Software 20
Other Prohibited Uses 20
Disciplinary Action for Violations 21
Reporting of Suspected Violations 21
General Ledger and Chart of Accounts 22
Chart of Accounts Overview 22
Distribution of Chart of Accounts 22
Control of Chart of Accounts 22
Account Definitions 23
Classification of Net Assets 25
Changes to the Chart of Accounts 25
Fiscal Year of Organization 25
Journal Entries 25
POLICIES ASSOCIATED WITH REVENUES AND CASH RECEIPTS
Revenue 26
Revenue Recognition Policies 26
Refunds of Revenue Received 27
Contributions Received 28
Definitions 28
Accounting for Contributions 28
Receipts and Disclosures 29
Billing/Invoicing Policies 30
Overview 30
Responsibilities for Billing and Collection 30
Accounts Receivable Entry Policies 30
Classification of Income and Net Assets 30
Cash Receipts 32
Overview 32
Processing of Checks and Cash Received in the Mail 32
Endorsement of Checks 32
Timeliness of Bank Deposits 32
Reconciliation of Deposits 33
On-Site Collections at Conferences and Seminars 33
POLICIES ASSOCIATED WITH EXPENDITURES AND DISBURSEMENTS
Purchasing Policies and Procedures 34
Overview 34
Responsibility for Purchasing 34
Non-Discrimination Policy 34
Use of Purchase Orders 35
Authorizations and Purchasing Limits 36
Required Solicitation of Quotations from Vendors 36
Evaluation of Alternative Vendors 37
Affirmative Consideration of Minority, Small Business & Women-Owned Business 38
Special Purchasing Conditions 38
Ethical Conduct in Purchasing 39
Conflicts of Interest Prohibited 39
Receipt and Acceptance of Goods 39
Political Intervention 40
Prohibited Expenditures 40
Endorsements of Candidates 40
Prohibited Use of Organization Assets and Resources 40
Accounts Payable Management 41
Overview 41
Recording of Accounts Payable 41
Accounts Payable Cut-off 41
Establishment of Control Devices 42
Preparation of a Invoice Package 42
Processing of Invoice Packages 42
Payment Discounts 43
Employee Expense Reports 43
Reconciliation of A/P Subsidiary Ledger to General Ledger 43
Travel and Business Entertainment 44
Travel Advances 44
Employee and Director Business Travel 44
Reasonableness of Travel Costs 45
Special Rules Pertaining to Air Travel 45
Spouse/Partner Travel 46
Cash Disbursement (Check-Writing) Policies 47 Check Preparation 47
Check Signing 47
Mailing of Checks 48
Voided Checks and Stop Payments 48
Record-Keeping Associated with Independent Contractors 48
Payroll and Related Policies 49
Classification of Workers as Independent Contractors or Employees 49
Payroll Administration 50
Changes in Payroll Data 51
Payroll Taxes 52
Preparation of Timesheets 52
Processing of Timesheets 52
Review of Payroll 53
Distribution of Payroll 53
POLICIES PERTAINING TO SPECIFIC ASSET AND LIABILITY ACCOUNTS
Cash and Cash Management 54
Cash Accounts 54
Bank Reconciliations 54
Cash Flow Management 55
Stale Checks 55
Wire Transfers 55
Inventory
Description of Inventory 56
Investment Policies 57
Introduction 57
Delegation of Authority 57
Investment Objectives 57
Allowable Investments 57
Diversification 58
Accounting Treatment 58
Procedures and Reporting 58
Fixed Asset Management 60
Contributed Assets 60
Establishment and Maintenance of a Fixed Asset Listing 60
Receipt of Newly-Purchased Equipment and Furniture 60
Repairs of Inventory 60
Dispositions of Inventory 61
Write-Offs of Fixed Assets 61
Leases 62
Classification of Leases 62
Accounting for Leases 62
Accrued Liabilities 63
Identification of Liabilities 63
Accrued Leave 63
Notes Payable 64
Record-Keeping 64
Accounting and Classification 64
Non-Interest-Bearing Notes Payable 64
POLICIES ASSOCIATED WITH FINANCIAL AND TAX REPORTING
Financial Statements 66
Standard Financial Statements of the Organization 66
Frequency of Preparation 66
Review and Distribution 66
Annual Financial Statements 67
Government Returns 68
Overview 68
Filing of Returns 68
Public Access to Information Returns 69
Unrelated Business Activities 71
Identification and Classification 71
Reporting 71
FINANCIAL MANAGEMENT POLICIES
Budgeting 72
Overview 72
Preparation and Adoption 72
Monitoring Performance 73
Budget Modifications 73
Annual Audit 74
Role of the Independent Auditor 74
How Often to Review the Selection of the Auditor 74
Selecting an Auditor 74
Preparation for the Annual Audit 75
Concluding the Audit 76
Insurance 77
Overview 77
Coverage Guidelines 77
Insurance Definitions 78
Record Retention 79
Policy 79
Functional Expense Allocations 81
Overview 81
Direct Charging of Costs 81 Allocation of Overhead Costs 81
POLICIES PERTAINING TO FEDERAL AWARDS
Administration of Federal Awards 82
Definitions 82
Preparation and Review of Proposals 82
Post-Award Procedures 82
Compliance with Laws, Regulations, and Provisions of Awards 83
Billing and Financial Reporting 84
Procurement under Federal Awards 85
Solicitation of Bids from Vendors 85
Provisions Included in all Contracts 86
Making of Subawards 88
Monitoring of Subrecipients 88
Equipment and Furniture Purchased with Federal Funds 90
Standards for Financial Management Systems 91
Budget and Program Revisions 91
Close Out of Federal Awards 92
Charging Costs to Federal Awards 93
Overview 93
Segregating Unallowable from Allowable Costs 93
Criteria for Allowability 94
Direct Costs 95
Indirect Costs 95
Accounting for Specific Elements of Cost 96
Cost Sharing and Matching 99
INTRODUCTION
The accompanying document is intended to provide an overview of the accounting policies and procedures applicable to the Council of the Southern Mountains, which shall be referred to as “The Council” throughout this manual.
The Council is incorporated in the State of West Virginia, and is exempt from federal income taxes under IRS Section [501(c)(3)] as a nonprofit corporation. The Council’s tax-exempt mission is to:
Provide quality programs, products and services that:
Promote and facilitate financial social and psychological self-sufficiency;
Contribute to the revitalization and resurrection of McDowell County to its highest economic and social potential, and
Empower the participants and/or recipients to take control over their futures.
This manual shall document the financial operations of The Council. Its primary purpose is to formalize accounting policies and selected procedures for the Finance Office staff and to document internal controls.
The contents of this manual were developed as official policy of The Council by the Executive Director, Director of Finance and finance staff. All Council staff are bound by the policies herein, and any deviation from established policy is prohibited. All contents of this manual was approvedl and adopted by the Board of Directors on April 16, 2002.
GENERAL POLICIES
ORGANIZATIONAL STRUCTURE
The Role of the Board of Directors
The Council is governed by its Board of Directors, which is responsible for the oversight of the organization by:
1. Giving birth to the vision
2. Establishing broad policies
3. Identifying and proactively dealing with emerging issues
4. Articulating the organization’s mission to the public
5. Soliciting prospective contributors and identifying other resources
6. Hiring the Executive Director
7. Establishing and maintaining programs and systems designed to assure compliance with terms of contracts and grants
The Board is responsible for hiring and periodically evaluating the Executive Director, who shall be responsible for the day-to-day oversight and management of The Council.
Committee Structure
The Board of Directors shall form committees in order to assist the board in fulfilling its responsibilities. These committees represent vehicles for parceling out the board’s work to smaller groups, thereby removing the responsibility for evaluating all of the details of particular issues from the full board’s consideration. Standing Board-level committees of The Council consist of the following:
1. Executive Committee
2. Finance Committee
3. Equal Opportunity Committee
4. Personnel Committee
Specific guidelines regarding the composition and election of the Board of Directors and committees are described in the organization’s by-laws. However, roles of committees with direct responsibilities for the financial affairs of the organization are further described in this manual. These committees shall be referred to in appropriate sections of this manual. The Board, at its discretion, may appoint other committees of an ad-hoc or long standing nature.
Finance Committee Responsibilities
The Finance Committee is responsible for direction and oversight regarding the overall financial management of The Council. Functions of the Finance Committee include:
1. Review and recommendation of the organization’s annual budget (prepared by the staff) for final approval by the full board
2. Long-term financial planning
3. Establishment of investment policy and monitoring investment performance
4. Evaluation and approval of facilities decisions (i.e. leasing, purchasing property)
5. Monitoring actual vs. budgeted financial performance
6. Oversight of reserve funds
The review of the organization’s financial statements shall not be limited to the finance committee, but shall involve the entire Board of Directors.
The Roles of the Executive Director and Staff
The Board of Directors hires the Executive Director, who reports directly to the Board of Directors. The Executive Director is responsible for hiring and evaluating department directors for each of the organization’s departments. Each department director reports to the Executive Director.
Within each department, department directors are responsible for hiring, with approval from the Executive Director, employees to work in that department. All employees within a department shall report directly to that department’s director, who shall be responsible for managing and evaluating all employees within the department.
FINANCE OFFICE OVERVIEW
Organization
The Finance Office consists of two staff who manage and process financial information for The Council and any other persons who might be engaged to perform associated duties on an as needed basis. The positions comprising the Finance Office of The Council, and the abbreviations of each position used throughout this manual, are as follows:
Director of Finance (DF)
Payroll/Accounts Payable Specialist (PRPS)
Other officers and employees of The Council who have financial responsibilities, and the abbreviations of each position used throughout this manual, are as follows:
Executive Director (ED)
Department Directors (DD)
Treasurer – Board-Level (TR)
Executive Committee (EC)
Full Board of Directors (BOD)
Responsibilities
The primary responsibilities of the Finance Office consist of:
General Ledger
Budgeting
Cash Management
Asset Management
Grants and Contracts Fiscal
Purchasing Management
Accounts Receivable and Billing
Cash Receipts
Accounts Payable
Cash Disbursements
Payroll and Benefits
Financial Statement Processing
External Reporting of Financial Information
Bank Reconciliation
Reconciliation of Sub-Ledgers
Compliance with Government Reporting Requirements
Annual Audit
Leases
Insurance
Consultation with the ED and BOD
BUSINESS CONDUCT
Practice of Ethical Behavior
Unethical actions, or the appearance of unethical actions, are unacceptable under any conditions. The policies and reputation of The Council depend to a very large extent on the following considerations.
Each employee must apply her/his own sense of personal ethics, which should extend beyond compliance with applicable laws and regulations in business situations, to govern behavior where no existing regulation provides a guideline. It is each employee's responsibility to apply common sense in business decisions where specific rules do not provide all the answers.
In determining compliance with this standard in specific situations, employees should ask themselves the following questions:
1. Is my action legal?
2. Is my action ethical?
3. Is my action moral?
4. Does my action comply with The Council policy?
5. Am I sure my action does not appear inappropriate?
6. Am I sure that I would not be embarrassed or compromised if my action became known to The Council or publicly?
7. Am I sure that my action meets my personal code of ethics and behavior?
8. Would I feel comfortable defending my actions on the 6 o’clock news?
9. Will my actions jeopardize, compromise and/or diminish the operational integrity and reputation of The Council?
Each employee should be able to answer "yes" to all of these questions before taking action.
Each Director, Manager and supervisor is responsible for the ethical business behavior of her/his subordinates. Directors, Managers and supervisors must weigh carefully all courses of action suggested in ethical as well as economic terms, and base their final decisions on the guidelines provided by this policy as well as their personal sense of right and wrong.
Conflicts of Interest
In addition, no employee, officer, or agent of the Council shall participate in the selection, award, or administration of a contract involving the Council if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, or any member of her or his immediate family, his or her partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected.
Compliance With Laws, Regulations and Organization Policies
The Council does not tolerate the willful violation or circumvention of any Federal, state, local, or foreign law by an employee during the course of that person's employment; nor does The Council tolerate the disregard or circumvention of The Council policy or engagement in unscrupulous dealings. Employees should not attempt to accomplish by indirect means, through agents or intermediaries, that which is directly forbidden.
Implementation of the provisions of this policy is one of the standards by which the performance of all levels of employees will be measured.
Disciplinary Action
Failure to comply with the standards contained in this policy will result in disciplinary action that may include termination, referral for criminal prosecution, and reimbursement to The Council or to the awarding agency, for any loss or damage resulting from the violation. As with all matters involving disciplinary action, principles of fairness will apply. Any employee charged with a violation of this policy will be afforded an opportunity to explain her/his actions before disciplinary action is taken, and upon appeal if this option is available and exercised within prescribed parameters.
Disciplinary action will be taken:
1. Against any employee who authorizes or participates directly in actions that are a violation of this policy.
2. Against any employee who has deliberately failed to report a violation or deliberately withheld relevant and material information concerning a violation of this policy.
3. Against any Director, Manager or supervisor who attempts to retaliate, directly or indirectly, or encourages others to do so, against any employee who reports a violation of this policy.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
FRAUD POLICY-POLICY 301
Scope
This policy applies to any fraud or suspected fraud involving employees, officers or directors, as well as members, vendors, consultants, contractors, funding sources and/or any other parties with a business relationship with The Council. Any investigative activity required will be conducted without regard to the suspected wrongdoer’s length of service, position/title, or internal and external relationships.
Policy
Management is responsible for the detection and prevention of fraud, misappropriations, and other irregularities. Fraud is defined as the intentional, false representation or concealment of a material fact for the purpose of inducing another to act upon it to his or her injury. Each member of the management team will be familiar with the types of improprieties that might occur within his or her area of responsibility, and be alert for any indication of irregularity.
Any fraud that is detected or suspected must be reported immediately to the Director of Finance or the Executive Director.
Actions Constituting Fraud
The terms fraud, defalcation, misappropriation, and other fiscal irregularities refer to, but are not limited to:
1. Any dishonest or fraudulent act
2. Forgery or alteration of any document or account belonging to The Council
3. Forgery or alteration of a check, bank draft, or any other financial document
4. Misappropriation of funds, securities, supplies, equipment, or other assets of The Council
5. Impropriety in the handling or reporting of money or financial transactions
6. Disclosing confidential and proprietary information to outside parties
7. Accepting or seeking anything of material value from contractors, vendors, or persons providing goods or services to The Council.
8. Destruction, removal or inappropriate use of records, furniture, fixtures, and equipment
9. Any similar or related irregularity
Other Irregularities
Irregularities concerning an employee’s moral, ethical, or behavioral conduct should be resolved by the departmental management and the ED.
If there is a question as to whether an action constitutes fraud, contact the Director of Finance or Executive Director for guidance.
Investigation Responsibilities
The DF and ED has the primary responsibility for the investigation of all suspected fraudulent acts as defined in the policy. The DF or ED may utilize whatever internal and/or external resources it considers necessary in conducting an investigation. If an investigation substantiates that fraudulent activities have occurred, the DF or ED will issue reports to appropriate designated personnel and, if appropriate, to The Council’s Board of Directors and/or the Executive Committee.
Decisions to prosecute or refer the examination results to the appropriate law enforcement and/or regulatory agencies for independent investigation will be made in conjunction with legal counsel and senior management, as will final dispositions of the case.
If suspected fraud or other wrongdoing involves programs funded in whole or in part with federal funds, additional responsibilities, such as special reporting and disclosure to the awarding agency, may apply to the organization. It is the policy of The Council to fully comply with all additional reporting, disclosure and other requirements pertaining to suspected acts of fraud as described in award documents.
Confidentiality
The DF and ED will treat all information received confidentially. Any employee who suspects dishonest or fraudulent activity will notify the DF or ED immediately, and should not attempt to personally conduct investigations or interviews/interrogations related to any suspected fraudulent act (see Reporting Procedures section below).
Investigation results will not be disclosed or discussed with anyone other than those who have a legitimate need to know. This is important in order to avoid damaging the reputations of persons suspected but subsequently found innocent of wrongful conduct and to protect The Council from potential civil liability.
The DF and ED may conduct closed meetings at which time and place such matters may be discussed. Such meetings are not public and shall include those persons with relevance to the matter.
Authority for Investigation of Suspected Fraud
The DF or ED will have:
1. Free and unrestricted access to all Council records and premises, whether owned, leased, rented and/or loaned, and
2. The authority to examine, copy, and/or remove all or any portion of the contents of files, desks, cabinets, and other storage facilities on the premises without prior knowledge or consent of any individual who may use or have custody or any such items or facilities when it is within the scope of their investigations.
Reporting Procedures
Great care must be taken in the investigation of suspected improprieties or irregularities so as to avoid mistaken accusations or alerting suspected individuals that an investigation is under way.
An employee who discovers or suspects fraudulent activity will contact the DF or ED immediately. The employee or other complainant may remain anonymous. All inquiries concerning the activity under investigation from the suspected individual(s), his or her attorney or representative(s), or any other inquirer should be directed to the ED or legal counsel. Information concerning the status of an investigation will not be released. The proper response to any inquiry is “I am not at liberty to discuss this matter.” Under no circumstances should any reference be made to “the allegation”, “the crime”, “the fraud”, “the forgery”, “the misappropriation”, or any other specific reference.
The reporting individual should be informed of the following:
1. Do not contact the suspected individual in an effort to determine facts or demand restitution.
2. Do not discuss the case, facts, suspicions, or allegations with anyone unless specifically asked to do so by The Council’s legal counsel or the ED.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
SECURITY POLICY-302
Finance
A lock will be maintained on the door(s) leading into The Council’s Finance Office. This door(s) shall be closed and locked in the evenings and whenever the Finance Office is vacant. The key to this lock will be provided to all finance personnel and the ED. The lock will be changed whenever any of these individuals leaves the employment of The Council.
The Council’s corporate seals and blank check stock shall be stored under lock and key in the Finance Office. This cabinet will be locked with a key that is kept in the Finance Office. Access to this file cabinet shall be by keys in the possession of the Director of Finance and designated accounting staff.
Access to Electronically Stored Accounting Data
It is the policy of The Council to utilize passwords and various levels of clearance/authorization to restrict access to accounting software, functions and data. Only duly authorized accounting personnel with data input responsibilities will be assigned passwords that allow access to the system.
Finance Office Staff are expected to keep their passwords secret and to change their passwords on a regular basis, no less frequently than quarterly. Administration of passwords shall be performed by a responsible individual independent of programming functions. Each employee must provide the DF with a copy of the current password. The DF must provide a master list of passwords to be stored in the office of ED.
Each password enables a user to gain access to only those software and data files necessary for each employee's required duties.
Storage of Back-Up Files
It is the policy of The Council to maintain back-up copies of electronic data files off-site. Access to back-up files shall be limited to individuals authorized by management.
General Office Security
During normal business hours, all visitors are required to check in at the front desk. After hours, a security key is required for access to the Finance Office of The Council. Keys are issued only to employees of The Council or other contractors/consultant performing authorized activities/functions during other than normal business hours.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
TECHNOLOGY AND ELECTRONIC COMMUNICATIONS POLICY-303
Purpose and Scope
The purpose of this policy is to identify guidelines for the use of The Council’s technologies and communications systems. This policy establishes a minimum standard that must be upheld and enforced by users of the technologies and communications systems.
The term “user” as used in these policies refers to employees (whether full-time, part-time or limited-term), independent contractors, consultants, and any other user having authorized access to, and using any of, the organization’s computers or electronic communications resources.
Computer and electronic communications resources include, but are not limited to, host computers, file servers, stand alone computers, laptops, printers, fax machines, phones, on-line services, E-mail systems, bulletin board systems, and all software that is owned, licensed or operated by The Council.
Acceptable Use of Organization Property
Use of the organization’s computers and electronic communications technologies is for programmatic and business activities of The Council. All use of such resources shall be in an honest, ethical, and legal manner that conforms to applicable license agreements, contracts, and policies regarding their intended use. Although incidental and occasional personal use of the organization’s communications systems are permitted, users automatically waive any rights to privacy.
In addition, the information, ideas, concepts and knowledge described, documented or contained in the electronic systems are the intellectual property of The Council. The copying or use of the organization’s intellectual property for personal use or benefit during or after employment (or period of contract) with The Council is prohibited unless approved in advance by the Executive Director.
All hardware (laptops, computers, monitors, mice, keyboards, printers, telephones, fax machines, etc) issued by The Council is the property of the corporation and should be treated as such. Users may not physically alter or attempt repairs on any hardware at any time. Users must report any problems with hardware to your supervisor or Department Director.
Password Security
Users are responsible for safeguarding their login passwords. Passwords may not be shared, nor should they be printed or stored on-line. Users should not leave their computers unattended without logging off.
Confidentiality
All information about individuals, families or organizations served by The Council is confidential. No information may be shared with any person or organization outside The Council without the prior written approval of the individual, family or organization and the Department Director.
Copyrighted Information
Use of The Council’s electronic communication systems to copy, modify, or transmit documents, software, information or other materials protected by copyright, trademark, patent or trade secrecy laws, without obtaining prior written permission from the owner of such rights in such materials, is prohibited.
Installation of Software
The installation of new software on the computers of The Council without the prior approval of Department Director is prohibited. If an employee desires to install any new programs onto a computer, written permission should first be obtained.
Other Prohibited Uses
Other prohibited uses of The Council’s communication systems include, but are not limited to:
1. Engaging in any communication that is discriminatory, defamatory, pornographic, obscene, racist, sexist or that evidences religious bias, or is otherwise of a derogatory nature toward any specific person, or toward any race, nationality, gender, marital status, sexual orientation, religion, disability, physical characteristic, or age group.
2. Browsing or downloading and/or forwarding and/or printing pornographic, profane, discriminatory, threatening or otherwise offensive material from any source including, but not limited to, the Internet.
3. Engaging in any communication that is in violation of federal, state or local laws.
4. Proselytizing or promoting any religious belief or tenet.
5. Campaigning for or against any candidate for political office or any ballot proposal or issue.
6. Sending, forwarding, redistributing or replying to “chain letters.”
7. Unauthorized use of passwords to gain access to another user’s information or communications on Council’s systems or elsewhere.
8. Advertising, solicitation or other commercial, non-programmatic use.
9. Knowingly introducing a computer virus into the organization’s communication system or otherwise knowingly causing damage to the organization’s systems.
10. Using the organization’s systems in a manner that interferes with normal business functions in any way, including but not limited to, streaming audio from the Internet during business hours, stock tickers, installing unauthorized software, etc.
11. Excessive personal use of The Council’s technologies that preempts any business activity or interferes with organizational productivity.
12. Sending E-mail messages under an assumed name or obscuring the origin of an E-mail message sent or received.
Disciplinary Action for Violations
The Council requires all users to adhere to this policy. Violations of this policy will result in disciplinary action, which could include termination of employment or cancellation of contracts.
Reporting of Suspected Violations
Suspected violations of these policies should be immediately and confidentially reported to your immediate supervisor. If you prefer not to discuss it with your supervisor, you may contact the ED.
The Council reserves the right to install programs that monitor employee use of the Internet and electronic communication systems and to act on any violations of these policies found through use of such programs. The Council further reserves the right to examine any and all electronic communications sent or received by employees via the organization’s electronic communications systems.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
GENERAL LEDGER AND CHART OF ACCOUNTS POLICY 304
The general ledger is defined as a group of accounts that supports the information shown in the major financial statements. The general ledger is used to accumulate all financial transactions of The Council, and is supported by subsidiary ledgers that provide details for certain accounts in the general ledger. The general ledger is the foundation for the accumulation of data and reports.
Chart of Accounts Overview
The chart of accounts is the framework for the general ledger system, and therefore the basis for The Council's accounting system. The chart of accounts consists of account titles and account numbers assigned to the titles. General ledger accounts are used to accumulate transactions and the impact of these transactions on each asset, liability, net asset, revenue, expense and gain and loss account.
The Council’s chart of accounts is comprised of four types of accounts:
1. Assets
2. Liabilities
3. Revenues
4. Expenses
Each account number shall be separated into three segments:
1. Designates line item;
2. Program/project, and
3. To identify various costs/details associated with two above.
Distribution of Chart of Accounts
All Council employees involved with account coding responsibilities (assignment or review of coding) or budgetary responsibilities will be issued a current chart of accounts. As the chart of accounts is revised, an updated copy of the chart of accounts shall be distributed to these individuals promptly.
Control of Chart of Accounts
The Council's chart of accounts is monitored and controlled by the Director of Finance. Responsibilities include the handling of all account maintenance, such as additions and deletions. Any additions or deletions of accounts should be approved by the DF, who ensures that the chart of accounts is consistent with the organizational structure of The Council and meets the needs of each division and department.
Account Definitions
General Ledger
Account Range Category Definition
000 - 199 Assets
Assets are probable future economic benefits obtained or controlled by the organization as a result of past transactions or events. Assets of the Council are classified as current assets, fixed assets, contra-assets, and other assets.
Current assets are assets that are available or can be made readily available to meet the cost of operations or to pay current liabilities. Some examples are cash, temporary investments, and receivables that will be collected within one year of the statement of financial position date.
Fixed assets are tangible assets with a useful life of more than one year that are acquired for use in the operation of the organization and are not held for resale.
Other assets include long-term assets that are assets acquired without the intention of disposing them in the near future. Some examples are security deposits, property and long-term investments.
200 – 299 Liabilities
Liabilities are probable future sacrifices of economic benefits arising from present obligations of the organization to transfer assets or provide services to other entities in the future as a result of past transactions or events. Liabilities of the Council are classified as current or long-term.
Current liabilities are probable sacrifices of economic benefits that will likely occur within one year of the date of the financial statements or which have a due date of one year or less. Common examples of current liabilities include accounts payable, accrued liabilities, short-term notes payable, and deferred revenue.
Long-Term Liabilities are probable sacrifices of economic benefits that will likely occur more than one year from the date of the financial statements. An example is the non-current portion of a mortgage loan.
300 - 399 Revenues
Revenues are inflows or other enhancements of assets, or settlements of liabilities, from delivering or producing goods, rendering services, or other activities that constitute an organization’s ongoing major or central operations. Revenues of the Council include membership dues, conference registrations, and sales of publications.
Revenues of the Council also include contributions received from donors and grants received from government agencies, private foundations and corporations, fund balances and interest.
400 - 999 Expenses
Expenses are outflows or other using up of assets or incurrences of liabilities from delivering or producing goods, rendering services, or carrying out other activities that constitute the Council’s ongoing major or central operations.
Classification of Net Assets
Net assets of the Council shall be classified based upon the existence or absence of donor-imposed restrictions as follows:
Unrestricted Net Assets - Net assets that are not subject to externally imposed stipulations.
Temporarily Restricted Net Assets - Net assets subject to externally imposed stipulations that may or will be satisfied through the actions of the Council and/or the passage of time.
Permanently Restricted Net Assets - Net assets subject to externally imposed stipulations that the Organization permanently maintain certain contributed assets. Generally, donors of such assets permit the Organization to use all or part of the income earned from permanently restricted net assets for general operations or for specific purposes.
Net assets accumulated by the Council that are not subject to donor imposed restrictions, but which the Board of Directors of the Corporation has earmarked for specific uses, shall be segregated in the accounting records as "board-designated" funds within the unrestricted category of net assets.
Changes to the Chart of Accounts
Additions to, deletions from, or any other changes to the Council’s standard chart of accounts shall only be done with the approval of the Director of Finance.
Fiscal Year of Organization
The Council shall operate on a fiscal year that begins on September 1 and ends on August 31. Any changes to the fiscal year of the organization must be ratified by majority vote of The Council’s Board of Directors.
Journal Entries
All general ledgers entries that do not originate from a subsidiary ledger shall be supported by journal vouchers or other documentation, which shall include a reasonable explanation of each such entry. Examples of such journal entries include:
1. Recording of noncash transactions
2. Corrections of posting errors
3. Non-recurring accruals of income and expenses
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
POLICIES ASSOCIATED WITH REVENUES AND CASH RECEIPTS
POLICY 305
REVENUE
Revenue Recognition Policies
The Council receives revenue from several types of transactions. Revenue from each of these types of transactions is recognized in the financial statements of the Corporation in the following manner:
1. Grant income - Monthly accrual based on incurrence of allowable costs (for cost-reimbursement awards) or based on other terms of the award (for fixed price, unit-of-service, and other types of awards)
2. Rent income - Monthly accrual, based on the terms of each sublease
3. Conference and seminar revenue - Deferred as received, reclassified to income at close of the month in which the conference or seminar is held
4. Contributions - Recognized as income when received, unless accompanied by restrictions or conditions (see the next section on contribution income)
5. Fee for Service- Recognized as income when received.
Immaterial categories of revenue may be recorded on the cash basis of accounting (i.e. recorded as revenue when received) as deemed appropriate by the DF.
Refunds of Revenue Received
The following policies apply to refunds associated with revenue collected by The Council:
Conferences and Seminars:
1. For cancellations received by The Council at least 30 days prior to a conference or seminar, a full refund, less a $50 processing fee, will be provided to the registrant.
2. No refunds or credits will be provided for no-shows and cancellation notifications received after the conference or seminar is held, or notification of cancellation received less than 15 days prior to a conference or seminar.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
CONTRIBUTIONS RECEIVED POLICY 306
Definitions
The following definitions shall apply with respect to the policies described in this section:
Contribution - An unconditional transfer of cash or other assets to the Council, or a settlement or cancellation of the Council's liabilities, in a voluntary nonreciprocal transfer by another entity acting other than as an owner.
Condition - A donor-imposed stipulation that specifies a future and uncertain event whose occurrence or failure to occur gives the promisor a right of return of the assets it has transferred to the Council or releases the promisor from its obligation to transfer its assets.
Restriction - A donor-imposed stipulation that specifies a use for the contributed asset that is more specific than broad limits resulting from the nature of the Council, the environment in which it operates, and the purposes specified in the Council's articles of incorporation and bylaws. Restrictions on the Council's use of an asset may be temporary or permanent.
Nonreciprocal Transfer - A transaction in which an entity incurs a liability or transfers assets to the Council without directly receiving value from the Council in exchange.
Exchange Transaction - A reciprocal transaction in which the Council and another entity each receive and sacrifice something of approximately equal value.
Accounting for Contributions
The Council shall recognize contribution income in the period in which the Organization receives restricted or unrestricted assets in nonreciprocal transfers, or unconditional promises of future nonreciprocal asset transfers, from donors. Contribution income shall be classified as increases in unrestricted, temporarily restricted, or permanently restricted net assets based on the existence or absence of such restrictions.
When it receives support in the form of volunteer labor, the Council shall record contribution income and assets or expenses if one of the following two criteria is met:
1. The contributed service creates or enhances a nonfinancial asset (such as a building or equipment), or
2. The contributed service possesses all three of the following characteristics:
a. It is the type of service that would typically need to be purchased by the Council if it had not been contributed,
b. It requires specialized skills (i.e. formal training in a trade or profession), and
c. It is provided by an individual possessing those specialized skills.
Examples of contributed services received and recorded as income and expense by the Council include volunteer hours, transportation, space.
Contributed services that meet one of the two preceding criteria shall be recorded at the fair market value of the service rendered.
Receipts and Disclosures
The Council and its donors are subject to certain disclosure and reporting requirements imposed under the Internal Revenue Code and the underlying Regulations. To comply with those rules, the Council shall adhere to the following guidelines with respect to contributions received by the Corporation.
For any separate contribution received by the Council, it shall provide a receipt to the donor. The receipt shall be prepared by the Receiving Department. All receipts prepared by The Council shall include the following information:
1. The amount of cash received and/or a description (but not an assessment of the value) of any noncash property received;
2. A statement of whether the Council provided any goods or services to the donor in consideration, in whole or in part, for any of the cash or property received from the donor, and
3. If any goods or services were provided to the donor by the Council, a description and good faith estimate of the value of those goods or services.
It is the policy of the Council to comply with all current federal and state rules regarding solicitation and collection of charitable contributions, whether specifically addressed in this manual or not, as well as all future revisions to those rules.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
BILLING/INVOICING POLICIES POLICY 307
Overview
The following is a list of items billed and/or accrued and received by the Council and the frequency with which each is billed:
Monthly Billings
1. Grants and contracts (See separate section on “Policies Associated with Federal Awards” for billing policies associated with federal grant agreements)
2. Indirect Costs
3. Direct Costs
Responsibilities for Billing and Collection
The Council’s Finance Office is responsible for the invoicing of goods and services as well as the collection of outstanding receivables.
Accounts Receivable Entry Policies
Posting of reimbursement for services (Family Day Care, Title XIX Waiver, Aged & Disabled Waiver) to the accounts receivable ledger shall be performed by individuals independent of the cash receipts function of the Council.
Classification of Income and Net Assets
All income received by the Council is classified as "unrestricted", with the exception of the following:
1. Grants and other awards received from government agencies or other grantors, which are classified as temporarily restricted
2. Special endowments received from donors requesting that these funds be permanently restricted for specific purposes
From time to time, the Council may raise other forms of contribution income which carry stipulations that the Council utilize the funds for a specific purpose or within a specified time period identified by the donor of the funds. When this form of contribution income is received, the Council shall classify this income as Temporarily Restricted income.
As with all Temporarily Restricted net assets, when the restriction associated with a contribution has been met (due to the passing of time or the use of the resource for the purpose designated by the donor), the Council will reclassify the related net assets from "Temporarily Restricted" to "Unrestricted" in its Statement of Financial Position and reflect this reclassification as an activity in its Statement of Activities.
From time to time, the Council Board of Directors may determine that it is appropriate to set funds aside for specific projects. To the extent these set-asides result from a Board action, rather than a donor-imposed requirement, the resulting set-aside shall be classified as “unrestricted”. However, to identify these funds as being set aside for special projects, such set-asides shall be labeled “Board-Designated” funds within the unrestricted net assets of the Council, and shall be reported as a separate component of unrestricted net assets on the Council financial statements.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
CASH RECEIPTS POLICY 308
Overview
Cash (including checks payable to the Council) is the most liquid asset an organization has. Therefore, it is the objective of the Council to establish and follow the strongest possible internal controls in this area.
Processing of Checks and Cash Received in the Mail
For funds that are received directly at The Council (i.e. payments not transmitted electronically), cash receipts are centralized to ensure that cash received is appropriately directed, recorded and deposited on a timely basis.
Mail is opened by the ED.
A deposit slip is prepared from the cash/checks received on a daily basis. Deposits are prepared and taken to the bank by an individual other than the employee who prepared the daily deposit slip..
Endorsement of Checks
It is the policy of the Council that all checks received that are payable to the Council shall immediately be restrictively endorsed by the FD. The restrictive endorsement shall be a rubber stamp that includes the following information:
1. For Deposit Only
2. The Council of the Southern Mountains
3. The bank account number of The Council of the Southern Mountains
Each deposit is accompanied by a deposit slip that includes.
1. Account Number
2. Account Name
3. Date of Deposit
4. The Bank Name
5. Total of Deposit each transaction, listed singly, if necessary
Timeliness of Bank Deposits
It is the policy of the Council that bank deposits will be made on a daily basis, unless the total amount received for deposit is less than $500. In no event shall deposits be made less frequently than weekly.
Reconciliation of Deposits
On a periodic basis, PRPS, who does not prepare the initial cash receipts listing or bank deposit, shall reconcile the listings of receipts to bank deposits reflected on the monthly bank statement. Any discrepancies shall be immediately investigated.
On-Site Collections at Conferences and Seminars
Cash and check payments may be accepted at conferences and seminars for payment of registration fees. The following policies apply to the processing of on-site payments:
1. Cashier duties are segregated from the processing of registrations
2. A registration list is utilized that includes name of customer and amount paid.
3. At the end of each day, a reconciliation of collections to the registration list shall be performed
4. All documentation associated with these transactions is brought back and turned in to the Finance Office immediately following the conference or seminar. This documentation will include the actual checks and cash collected. Thereafter, deposits are processed as described earlier in this section.
POLICIES ASSOCIATED WITH EXPENDITURES AND DISBURSEMENTS
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
PURCHASING POLICIES AND PROCEDURES POLICY 309
Overview
THE POLICIES DESCRIBED IN THIS SECTION APPLY TO ALL PURCHASES MADE BY THE COUNCIL.
ADDITIONAL POLICIES APPLICABLE ONLY TO THOSE PURCHASES MADE UNDER FEDERAL AWARDS ARE DESCRIBED IN THE SECTION “POLICIES ASSOCIATED WITH FEDERAL AND STATE AWARDS.”
It is the policy of the Council to follow a practice of ethical, responsible and reasonable procedures related to purchasing, agreements and contracts, and related forms of commitment. The policies in this section describe the principles and procedures that all staff shall adhere to in the completion of their designated responsibilities.
Responsibility for Purchasing
All department heads shall have the authority to initiate purchases on behalf of their department, within the guidelines described in this policies manual. In addition, department directors may delegate purchasing authority to responsible individuals within their department. Department directors shall inform the Finance Office of all individuals that may initiate purchases or prepare purchase orders. The Finance Office shall maintain a current list of all authorized purchasers of the Council.
The Finance Office shall be responsible for processing purchase orders. The Director of Finance has approval authority over all purchases and contractual commitments as defined in this policy. The Director of Finance shall make the final determination on any proposed purchases where budgetary or other conditions may result in denial.
Non-Discrimination Policy
All vendors/contractors who are the recipients of Council funds, or who propose to perform any work or furnish any goods under agreements with the Council shall agree to these important principles:
1. Vendors/Contractors will not discriminate against any employee or applicant for employment because of race, religion, color, sexual orientation or national origin, except where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of the vendors/contractors.
Use of Purchase Orders
It is the policy of the Council to utilize a purchase order system. A properly completed purchase order shall be required for each purchase decision (i.e. total amount of goods and services purchased, not unit cost) in excess of $300, with the exception of travel advances, expense reimbursements, utility costs, vehicle maintenance/operating, which require the preparation of a separate form described elsewhere in this manual. A properly completed Purchase Order shall contain the following information, at a minimum:
1. Specifications or statement of services required
2. Vendor name, address, point of contact and phone number
3. Source of funding (if applicable)
4. Delivery or performance schedules
5. Delivery, packing and transportation requirements
6. Special conditions (if applicable)
7. Net price per unit, less discount, if any
8. Total amount of order
10. E-mail request from The Department Director.
11. Date PO prepared
Purchaser attaches copy to invoice to be submitted for payment.
All purchase orders shall be recorded in number sequence. At the end of each accounting period, an aged outstanding purchase order report shall be prepared and distributed to each purchasing representative and the Director of Finance.
Authorizations and Purchasing Limits
All completed purchase orders must be signed by the preparer and approved by the department director. In addition, the Director of Finance must approve all purchases in excess $300.
All contracts in excess of $3,000 between the Council and outside parties must be reviewed and approved by the Department Director or Director of Finance, as well as the Executive Director. The ED is authorized to enter into any contract on behalf of the Council. Contracts of $3,000 or less must be reviewed and approved by the Department Director and the Director of Finance, but do not require approval from the ED. These policies shall also apply to renewals of existing contracts.
It may be necessary, to refer contract, leases or other purchase agreements to the Council’s attorney when such agreements are complex and/or exceed $10,000.
Required Solicitation of Quotations from Vendors
Purchase decisions in excess of $300 for labor, equipment, supplies or services purchased, leased or contracted for shall be made only after receiving, whenever possible, oral quotations from at least three (3) vendors.
Purchase decisions exceeding $1,000 for labor, equipment, supplies or services purchased, leased or contracted for shall be made only after receiving whenever possible, written quotations from at least three (3) vendors. Specific selections shall be recommended, via the Department Directors, to the Director of Finance for approval with written quotations attached for review. Recommendations shall be based on consideration of all applicable criteria as described under “Evaluation of Alternative Vendors” below.
All Purchase decisions of $5,000 or more shall be made by obtaining competitive proposals from at least three (3) responsible vendors. Sealed bids shall be utilized when required by a Federal awarding agency.
Solicitations for goods and services (requests for proposals) should provide for all of the following:
1. A clear and accurate description of the technical requirements for the material, product or service to be procured. In competitive procurements, such a description shall not contain features, which unduly restrict competition.
2. Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals (see the next section entitled “Evaluation of Alternative Vendors” for required criteria)
3. A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.
4. The specific features of "brand name or equal" descriptions that bidders are required to meet when such items are included in the solicitations.
5. The acceptance, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement.
6. Preference, to the extent practicable and economically feasible, for products and services that conserve natural resources and protect the environment and are energy efficient.
7. A description of the proper format, if any, in which proposals must be submitted, including the name of the Council person to whom proposals should be sent.
8. The date by which proposals are due.
9. Required delivery or performance dates/schedules.
10. Clear indications of the quantity(ies) requested and unit(s) of measure.
Evaluation of Alternative Vendors
Alternative vendors shall be evaluated on a weighted scale that considers the following criteria:
1. Adequacy of the proposed methodology of the vendor
2. Skill and experience of key personnel
3. Demonstrated company experience
4. Other technical specifications (designated by department requesting proposals)
5. Compliance with administrative requirements of the request for proposal (format, due date, etc.)
6. Vendor’s financial stability
7. Vendor’s demonstrated commitment to the nonprofit sector
8. Results of communications with references supplied by vendor
9. Ability/commitment to meeting time deadlines
10. Cost
11. Minority- or women-owned business status of vendor
12. Other criteria (to be specified by department requesting proposal) such as the vendor’s history with the Council and/or other organizations known to the Council
13. With all criteria being equal, locally owned companies shall receive priority consideration.
Not all of the preceding criteria may apply in each purchasing scenario. However, in each situation requiring consideration of alternative vendors, the department responsible for the purchase shall establish the relative importance of each criterion prior to requesting proposals and shall evaluate each proposal on the basis of the criteria and weighting that have been determined.
After a vendor has been selected and approved by the department director, the final selection shall be approved by the Executive Director prior to entering into a contract.
Affirmative Consideration of Minority, Small Business and Women-Owned Businesses and Local Vendors
Positive efforts shall be made by the Council to utilize small businesses, minority-owned firms, and women's business enterprises and local vendors, whenever possible. The following steps shall be taken in furtherance of this goal:
1. Ensure that local vendors, small business, minority-owned firms, and women's business enterprises are used to the fullest extent practicable.
2. Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by local vendors, small business, minority-owned firms and women's business enterprises.
3. Consider in the contract process whether firms competing for larger contracts tend to subcontract with small businesses, minority-owned firms and women's business enterprises.
4. Encourage contracting with consortiums of local vendors, small businesses, minority owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.
5. Use the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce's Minority Business Development Agency in the minority-owned firms and women's business enterprises.
Special Purchasing Conditions
Emergencies:
Where equipment, materials, parts, and/or services are needed, quotations will not be necessary if the health, welfare, safety, etc., of staff and protection of Corporation property is involved.
Single Distributor/Source:
Where there is only one (1) distributor for merchandise needed and no other product meets the stated needs or specifications, quotations will not be necessary.
Federally-Funded Programs:
Purchases that will be charged to programs funded with federal awards will be subject to additional policies. These policies are described in a separate section, “Policies Associated With Federal Awards.”
Ethical Conduct in Purchasing
Ethical conduct in managing the Council's purchasing activities is an absolute essential. Staff must always be mindful that they represent the Board of Directors and share a professional trust with other staff and the general membership.
Staff shall discourage the offer of, and decline, individual gifts or gratuities of value in any way that might influence the purchase of supplies, equipment, and/or services. Staff shall notify their immediate supervisor if they are offered such gifts.
Conflicts of Interest Prohibited
No officer, board member, employee, or agent of the Council shall participate in the selection or administration of a vendor if a real or apparent conflict of interest would be involved. Such a conflict would arise if an officer, board member, employee or agent, or any member of his/her immediate family, his/her spouse/partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in the vendor selected.
Officers, board members, employees and agents of the Council shall neither solicit nor accept gratuities, favors, or anything of monetary value from vendors or parties to sub-agreements.
Receipt and Acceptance of Goods
The Department Director or designated individual shall inspect all goods received. Upon receipt of any item from a vendor, the following actions shall immediately be taken:
1. Review bill of lading for correct delivery point
2. Verify the quantity of boxes/containers with the bill of lading
3. Examine boxes/containers for exterior damage
4. Note on the bill of lading any discrepancies (missing or damaged boxes/containers, etc.)
5. Sign and date the bill of lading
6. Retain a copy of the bill of lading
7. Attach a copy of the bill of lading to the invoice when submitting to Finance Office for payment.
When goods are moved to another area for thorough inspection, the following inspection procedures shall be performed:
1. Remove the packing slip from each box/container
2. Compare the description and quantity of goods per the purchase order to the packing slip
3. Examine goods for physical damage
4. Count or weigh items, if appropriate
5. Record an indication of counts on the purchase order
It is the policy of the Council to perform the preceding inspection procedures in a timely manner in order to facilitate prompt return of goods and/or communication with vendors.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
POLITICAL INTERVENTION POLICY 310
Prohibited Expenditures
Consistent with its tax-exempt status under the Internal Revenue Code, the Council shall not incur any expenditure for political intervention. For purposes of this policy, political intervention shall be defined as any activity associated with the direct or indirect support or opposition of a candidate for elective public office at the federal, state or local level. Political intervention does not include lobbying activities, defined as the direct or indirect support or opposition for legislation, which is not prohibited under the Internal Revenue Code for the Council. Examples of prohibited political expenditures include, but are not limited to, the following:
1. Contributions to political action committees
2. Contributions to the campaigns of individual candidates for public office
3. Contributions to political parties
4. Expenditures to produce printed materials (including materials included in periodicals) that support or oppose candidates for public office
5. Expenditures for the placement of political advertisements in periodicals
Endorsements of Candidates
It is the policy of the Council not to endorse any candidates for public office in any manner, either verbally or in writing. This policy extends to the actions of management and other representatives of the Council, when these individuals are acting on behalf of, or are otherwise representing, the Corporation.
Prohibited Use of Organization Assets and Resources
It is the policy of the Council that no assets or human resources of the organization shall be utilized for political activities, as defined above. This prohibition extends to the use of Council assets or human resources in support of political activities that are engaged in personally by Board members, members of management, employees, or any other representatives of the Council. While there is no prohibition against these individuals engaging in political activities personally (on their own time, and without representing that they are acting on behalf of the Council), these individuals must at all times be aware that Council resources cannot at any time be utilized in support of political activities.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
ACCOUNTS PAYABLE MANAGEMENT POLICY 311
Overview
The Council strives to maintain efficient business practices and good cost control. A well managed accounts payable function can assist in accomplishing this goal from the purchasing decision through payment and check reconciliation.
It is the policy of the Council that the recording of assets or expenses and the related liability is performed by an employee independent of ordering and receiving. The amounts recorded are based on the vendor invoice for the related goods or services. The vendor invoice should be supported by an approved purchase order where necessary, and should be reviewed and approved by a department director prior to being processed for payment. Invoices and related general ledger account distribution codes are reviewed prior to posting to the subsidiary system.
The primary objective for accounts payable and cash disbursements is to ensure that:
1. Disbursements are properly authorized
2. Invoices are processed in a timely manner
3. Vendor credit terms and operating cash are managed for maximum benefits
Recording of Accounts Payable
All valid accounts payable transactions, properly supported with the required documentation, shall be recorded as accounts payable in a timely manner.
Accounts payable are processed on a daily basis. Information is entered into the system from approved invoices or disbursement vouchers with appropriate documentation attached.
It is the policy of the Council that only original invoices will be processed for payment unless duplicated copies have been verified as unpaid by researching the vendor records. No vendor statements shall be processed for payment.
Accounts Payable Cut-Off
For purposes of the preparation of the Corporation’s monthly financial statements, all vendor invoices that are received, approved and supported with proper documentation shall be recorded as accounts payable as of the end of the immediately preceding month if the invoice pertains to goods or services delivered by month-end.
Establishment of Control Devices
Control of invoices is established by the Accounts Payable Specialist as soon as invoices are received. Vendors will be instructed to mail all invoices directly to the Central Office.
In the event a payment must be received by vendor without an invoice, the check authorization form can be used, but by no means meant to replace an actual invoice. Upon delivery of said check the receipt noting payment shall be forwarded to the Finance Office and become part of the check authorization package.
Preparation of Invoice Package
Prior to any account payable being submitted for payment, a package called an “invoice package” shall be assembled. Each invoice package shall contain the following documents:
1. Vendor invoice (or employee expense report)
2. Packing slip (where appropriate)
3. Receiving report (or other indication of receipt of merchandise and authorization of acceptance)
4. Purchase order (for purchases in excess of $300.
5. Any other supporting documentation deemed appropriate
Processing of Invoice Packages
The following procedures shall be applied to each invoice package by the accounts payable specialist:
1. Check the mathematical accuracy of the vendor invoice.
2. Compare the nature, quantity and prices of all items ordered per the vendor invoice to the purchase order, packing slip and receiving report
3. Document the general ledger distribution, using the Council’s current chart of accounts
4. Obtain the review and approval of the department director (or their designee) associated with the goods or services purchased
Approvals by department directors indicate their acknowledgement of satisfactory receipt of the goods or services invoiced, agreement with all terms appearing on the vendor invoice, agreement with general ledger account codings, and agreement to pay vendor in full. Approvals shall be documented with initials or signatures of the approving individual.
Payment Discounts
To the extent practical, it is the policy of the Council to take advantage of all prompt payment discounts offered by vendors. When availability of such discounts is noted, and all required documentation in support of payment is available, payments will be scheduled so as to take full advantage of the discounts.
Employee Expense Reports
Reimbursements for travel expenses, business meals, or other approved costs will be made only upon the receipt of a properly approved and completed expense reimbursement form (see further policies under “Travel and Business Entertainment”). All required receipts must be attached, and a brief description of the business purpose of trip or meeting must be noted on the form. Expense reports will be processed for payment within seven working days if received within two business days of the deadline. Expenses older than two months will not be reimbursed.
Reconciliation of A/P Subsidiary Ledger to General Ledger
At the end of each monthly accounting period, the total amount due to vendors per the accounts payable subsidiary ledger shall be reconciled to the total per the accounts payable general ledger account (control account). All differences are investigated and adjustments are made as necessary. The reconciliation and the results of the investigation of differences are reviewed and approved by the Director of Finance.
Also on a monthly basis, the Accounts Payable Specialist shall perform the following procedures:
1. Check all statements received for unprocessed invoices.
2. Check the Purchase Order file for open P.O.’s that are more than 60 days old and follow up.
COUNCIL OF THE SOUTHERN MOUNTAINS
FINANCIAL POLICY AND PROCEDURE MANUAL
SECTION 300
Date of Issue: May 1, 2002
Date Revised: Updated format-June 19, 2007
Date Revised: October 27, 2008
TRAVEL AND BUSINESS ENTERTAINMENT POLICY 312
Travel Advances
Funds will be advanced for upcoming travel only upon receipt of a completed and properly approved request for travel advance. Travel advances are to be used only for the purpose intended. Travel expenses are to be made in accordance with the Council’s travel policies as explained later in this section.
Employees receiving travel advances are required to sign for the advance signifying their acknowledgement of, and agreement to, these policies. Employees receiving travel advances must submit an expense report within ten working days of returning from travel. Any outstanding advances more than 30 days old will be deducted from an employee's next paycheck as so noted on the travel advance request form.
Employee and Business Travel
At the conclusion of a Council authorized business trip, an employee or member of the Board of Directors that has incurred business-related expenses should complete an Expense Report in accordance with the following policies:
1. Identify each separately incurred business expense (i.e. do not group all expenses associated with one trip together)
2. With the exception of tips, per diem and reimbursed mileage, all business expenses must be supported with invoices/receipts.
3. For all lodging and any expenditure other than meals, vendor receipts/invoices must be submitted. Credit card charge slips do not represent adequate supporting documentation – a hotel receipt must be obtained to substantiate all lodging expenditures.
4. For airfare, airline-issued receipts should be obtained. If a traveler fails to obtain a receipt, other evidence must be submitted indicating that a trip was taken and the amount paid (for example, a combination of an itinerary, a credit card receipt, and boarding passes).
5. Mileage may be reimbursed at the standard state rates currently in effect, as published each year.
6. The business purpose of each trip must be adequately explained on each report.
7. Project/function codes must be identified for all expenditures.
8. For all meals and other business expenditures, the following must be clearly identified:
a. Names, titles, organizations, and business relationships of all persons entertained
b. The business purpose of the meal or other business event (topics discussed, etc.)
9. All expense reports must be signed and dated by the employee.
10. All expense reports must be approved by the employee's Department Director or ED where applicable.
11. Only one expense report form should be prepared for each trip.
Policy Note: Per diem rates may be used exclusively for meals and incidentals or for lodging and meals and incidentals. When per diem rates are utilized, there is no requirement to obtain receipts from travelers to substantiate these components of business travel.
An employee will not be reimbursed for expense reports not meeting the preceding criteria. If the Expense Report results in a balance due the Council (as a result of receiving a travel advance greater than actual business expenditures), the employee must attach a check as indicated on the travel advance request form authorization to settle the balance due through a payroll deduction.
No further travel advances will be issued to any employee who has an outstanding balance due the Council from previous business trips.
Reasonableness of Travel Costs
The Council shall reimburse travelers only for those business-related costs that are reasonably incurred. Accordingly, the following guidelines shall apply:
1. Suites and other upgraded rooms at hotels shall not be allowed; Travelers should stay in standard rooms
2. When utilizing rental cars, travelers should rent midsize or smaller vehicles; Share rental cars whenever possible
3. Business-related long-distance telephone calls while away on business travel are permitted, but should be kept to a minimum; Expense reports should explain long-distance charges
4. Personal long-distance calls while away on business are reimbursable if kept to a minimum, such as one nightly call home to family; Personal calls in excess of this shall not be reimbursed
5. Whenever possible, travelers should utilize long-distance calling cards when placing calls while away on travel; Avoid using the hotel’s long-distance service if possible
6. Reasonable tips for baggage handling and ground transportation shall be reimbursed; No receipts are required
Special Rules Pertaining to Air Travel
The following additional rules apply to air travel:
1. Air travel should be at coach class; First class air travel shall not be reimbursed unless there is a documented medical reason
2. Memberships in airline flight clubs is not reimbursable
3. Cost of flight insurance is not reimbursable
4. When airfare is $500 or more, two quotes from a travel agency and/or an airline should be obtained and attached to the expense report, whenever possible.
5. When returning on a Sunday or departing on a Saturday in order to obtain a cost savings in airfare due to the Saturday-night stay-over, travelers should provide a total cost comparison (showing that the lower airfare plus an extra night lodging, meals & incidentals is less costly than airfare without the Saturday night stayover)
6. Cost of upgrade certificates is not reimbursable
7. Cost of canceling and rebooking flights is not reimbursable, unless it can be shown that it was necessary or required for legitimate business reasons (such as changed meeting dates, etc.)
8. Travelers must identify and pay for all personal flights, even if such flights are incorporated into a flight schedule that serves business purposes (i.e. the Council will not reimburse for the personal legs of a trip).
9. Awards of frequent flyers miles and other such bonuses provided by airlines, are the property of the Council when earned as a result of Council authorized travel. As such, the Council has the discretion of utilizing these awards in a manner that reduces the costs of future travel, to transfer to an employee for personal use as a reward for special recognition by the Board of Directors, or for use in conjunction with a fund raising activity sponsored by the Council.
Spouse/Partner Travel
It is the policy of the Council not to reimburse any employee or Board member for separate travel costs (air fare, etc.) associated with his/her spouse or partner. The cost of a shared hotel room need not be allocated between employee/director and spouse/partner for purposes of this policy.
