DRAFT
Financial Policies
and Procedures
Environmental Education
Association of Washington
Table of
Contents
Cash Receipts and Revenue
Policies ….…………………………………………….. Pg
3
Cash Disbursements
and Expense Policies ….…………………………………….Pg
4
Policies on Managing
Assets……………………………………………………………Pg
9
General/Related Policies………………………………………………………………Pg
13
Cash Receipts and
Revenue Policies
Invoicing
Maintain accurate records
of those who owe money for goods and services purchased but not yet
paid and prepare invoices as a systematic way of collecting funds.
Checks Received
Assigned staff members
will be accountable for receipt, classification, recording, and deposit
of all incoming checks.
Cash transactions
Many transactions will
be in check or electronic form. Cash contributions will be less common
and preferably only for events that cannot be prepaid by check. The
staff member who is responsible for the event shall perform these procedures
as established by the Executive Committee. All funds to be deposited
should be turned over to the operations manager in a timely way so that
they can be deposited.
Bank Deposits
All checks and cash
received shall be deposited in the bank in a timely manner. Deposits
will be routinely made on Friday with large deposits, those over $5,000
done within 24 hours of receipt of funds.
Accounts Receivable
It is the policy of
Environmental Education Association of Washington to accrue accounts
receivable for all services rendered but not yet paid for and for all
unconditional promises and donations not yet received.
Accounts Receivable
Write-Offs
It is the policy of
Environmental Education Association of Washington to ensure that all
available means of collecting accounts receivable have been exhausted
before write-off procedures are initiated.
Incoming Mail and
Deposits
It is the policy of
Environmental Education Association of Washington that all general incoming
mail be opened by the Operations Manager. Mail addressed to individual
staff members should be placed in that individual's box opened by that
staff member.
Voided Checks
It is the policy of
Environmental Education Association of Washington to maintain all voided
checks in a separate folder.
Write-Off of Old
Checks
It is the policy of
Environmental Education Association of Washington to write off checks
over twelve months old in conjunction with year-end procedures.
All invoices (receivables)
will be reviewed quarterly and any that are uncollectible will be written
off on a quarterly basis.
Cash Disbursements
and Expense Processes
Expenditure Approval
All payments for goods
and services will be made only using a duly authorized check or EEAW
credit card.
Expense reports
When an employee or
volunteers incurs expenses within the established policy on behalf of
Environmental Education Association of Washington, an Expense Report
shall be used to reimburse the employee or volunteer for such expenses.
Reimbursable expenses may include business travel, meals and lodging,
transportation expenses (such as car rental and parking), mileage and
parking expenses for using a personal vehicle for business, miscellaneous
office supplies and other out-of-pocket expenses.
An employee/volunteer
should offer a signed request reimbursement of such expense within 30
days after they are incurred. All expense items must be accompanied
by proper documentation including original receipt when appropriate
and signed reimbursement form.
All expenses must fall
into the approved budget and priorities for the fiscal year.
Request for additional travel reimbursements are to be taken under discretion
by the Executive Director and Board President.
The Executive Director’s
monthly expense report will be reviewed and approved by an officer of
the organization with signatory authority.
Payments
All payments shall
be made by check following appropriate approval of the expenditure.
Policies on Payment
Procedures
Check Allocations:
It is the policy of Environmental Education Association of Washington
to keep unused check supplies safeguarded under lock and key.
Only the Executive Director and Operations Manager will have access
to the locked drawer with blank EEAW checks, checks received that are
not yet deposited and other key financial paperwork such as vendor contracts.
Check Endorsement
Stamp: It is the policy of Environmental Education Association of
Washington to endorse checks with a stamp as follows:
FOR DEPOSIT
ONLY
ORGANIZATION
NAME : Environmental Education Association of Washington
ACCOUNT
NUMBERAppropriate deposit account number .
Check Signers
It is the policy of
Environmental Education Association of Washington to give check signing
and investment withdrawal authorization to:
Executive Director
Board President and/or
Treasurer
The Executive Director
and Board President and/or Treasurer shall have authority to sign payroll
checks or automatic payroll deposit documentation.
Checks other than payroll
or rent issued for $1,000 or over will require two signatures (normally
the Executive Director and a board member other than the Treasurer).
The OM will prepare
checks and reconcile the bank accounts but will have no signing authority
on those accounts. The ED will have signing authority but will
not be responsible for reconciling those accounts. The ED will review
the reconciled accounts monthly.
Controls over Checks
and Cash
The general mail is
to be opened by the OM. Cash and/or checks will be deposited within
1 week of receipt.
Received cash and/or
checks totaling $1000.00 or more will be deposited within 2 business
days.
Checks and cash received
are to be listed. The list is to be reconciled to the deposits
recorded for the month.
Credit Card
It is the policy of
Environmental Education Association of Washington to issue credit cards
to the following individuals with the following amounts:
Executive Director
($5,000.00)
Operations Manager
($1,000.00)
The
Operations Manager will be required to get prior approval from the Executive
Director for any purchase over $100.
All expenses incurred
via a credit card must be substantiated as to:
Amount
Time and place
Business purpose/relationship
The
credit card should never include personal expenses.
Expense receipts will
be attached to the credit card statement. It shall be reviewed
and approved by the executive director then forwarded to Operations
Manager for processing. The OM will reconcile all credit card statements.
The Executive Director should monthly review, sign and date all reconciled
EEAW credit card account and bank statement. The Treasurer will
review the statement of the ED monthly.
Insufficient Funds
Checks: It is the policy of Environmental Education Association
of Washington to include checks for program services that are returned
by the bank because of non-sufficient funds in the accounts receivable
account. When a check is returned, the OM will attempt one phone call
to the owner of the check to attempt to collect. If the phone
call is not successful the following procedures will occur:
If the checks in question
are eligible for redeposit, the subsequent deposit will reduce the receivable
account accordingly.
If the checks are prohibited
from redeposit, Environmental Education Association of Washington’s
Collections Policy will be implemented.
A Non-sufficient Funds
Check Log will be maintained and made available for the annual audit.
For contributions,
if funds are not collected, an entry will be made to reduce the appropriate
contribution account.
Paid Stamp:
As confirmation of payment, it is the policy of Environmental Education
Association of Washington to attach the invoice to the check stub and
mark the stub and invoice with an “APPROVED” stamp which prompts
for the following: specific account, funder and program area. This information
is to be completed by the Operations Manager and forwarder to the Executive
Director who will also initial for approval and sent back to the OM
who will prepare the check. When the check is prepared the OM
will stamp the invoice with a “PAID” stamp and record the check
number and date. ED will review these documents before signing
the accompanying check.
Payroll Processing
If an employee is required
to submit time sheets, it is the policy of Environmental Education Association
of Washington that time sheets be routed to the Executive Director for
final review and approval.
Paid Time Off (PTO)
In the last month of
the year, it is the policy of Environmental Education Association of
Washington to accrue the value of the Paid Time Off (PTO) liability
due to employees.
Annual leave Payments
Employees may accrue
a maximum of thirty (30) days vacation. All other vacation leave
must be taken within the fiscal year (January – December) it was earned,
and will be automatically adjusted each December to reflect this policy.
Vacation days will not be accrued after 30 days have been accumulated.
The maximum amount
of annual PTO paid to a terminating employee will be the amount of leave
carried forward into the subsequent year, plus the amount of accrued
but unused leave earned during the year.
If an employee leaves
prior to one year of employment, no cash payment of PTO will be paid.
PTO will not be accrued during leaves of absence or unpaid leaves.
Petty Cash
There will be no Petty
Cash fund at Environmental Education Association of Washington.
Check Advances
In certain instances,
it may be necessary to provide a check advance to an employee or volunteer
of Environmental Education Association of Washington for business purposes.
These instances may include advances for travel expenses or for purchases
when the vendor demands advance payment or deposit. The receipts
for all advances should be provided, recorded and filed as soon as possible
after the expenditure occurs and should be tracked by the Operations
Manager. If a variance occurs between money advanced and approved expenditure,
the OM will treat the variance as either accounts payable or accounts
receivable, make appropriate adjustment to the records and follow the
normal procedures for payment or collection.
Policies on
Managing Assets
Reconciling Bank
Statements
Each month all bank
account registers are opened by the OM, turned over to the accountant
who reconciles them with the corresponding bank statements. The accountant
provides the Executive Director and Treasurer with a financial report
that includes an update on the bank account reconciliations.
Annual Budgets
Prior to the start
of each fiscal year, the Executive Director EEAW Treasurer and staff
members prepare an annual budget for approval by the Board of Directors.
The budget shall be reasonable and achievable within the anticipated
income.
Financial Reporting
The Board of Directors
shall receive quarterly and annual reports that provide financial information
to assist in their management and financial oversight responsibility.
The Executive Director,
Board Chair and Board Treasurer shall receive a monthly report that
includes reconciliation of bank statements, monthly detailed revenues
and expenses, and year-to-date actual revenues, expenses, and budget
variances.
The Board of Directors
shall receive quarterly program activity reports that reflect all program
activities. This information is used to monitor program activity with
associated expenditures.
The Board of Directors
shall receive a year-end financial and activity report that includes
revenues, expenditures, and activities performed and objectives accomplished.
Annual Audit
Annual audits are required
for non-profits with an annual budget of more than $500,000. When
this applies to EEAW the Executive Committee will recommend for Board
approval an outside firm to audit the financial records of Environmental
Education Association of Washington. Until such time the accounts
will be audited every three years.
The fiscal year for
Environmental Education Association of Washington shall be January to
December. At the end of each fiscal year, an independent firm will provide
an audit of the financial records.
The final audit report
shall be submitted to the Board of Directors for approval.
Investments
The Executive Director,
upon the recommendation of the Executive Committee, shall invest funds
available and not needed for current operations to enhance revenue within
the constraints approved by the Board.
The Treasurer along
with the staff will develop a cash budget and invest excess grant monies
to provide an additional income stream into the organization.
The plan will be reviewed
annually for performance as well as new priorities for the organization.
Depreciation Policy
In order to recognize
that the value of fixed assets decrease over time, capital expenditures
will be depreciated.
The bookkeeper/accountant
in consultation with the Executive Director will establish a depreciation
schedule for all the equipment and capital purchases that exceed $500.00
The length of depreciation
will be determined in accordance with IRS standards and accepted accounting
principles.
Accounting will be
informed in writing of each depreciated item, amount, date of purchase,
and depreciating schedule.
The accountant, using
the depreciation schedule will enter appropriate total depreciation
in accumulated depreciation account and in the depreciation expense
account.
Volunteer Mileage
Policy
Environmental Education
Association of Washington does not reimburse Volunteers for mileage
for travel expenses, unless they are pre-approved by the Executive director
within board guidelines.
Expenses for parking
and other unusual costs directly incurred in connection with service
delivery may be reimbursed with prior approval of the Executive Director.
The IRS may allow a
deduction for travel expenses for income tax purposes, which are incurred
during service to an eligible non-profit, under rules established by
the IRS. Your tax adviser should be consulted for questions in this
regard
The Board President
should be involved if a board member believes their request is not being
fairly handled by the Executive Director.
Signature Resolution
The board will pass
a signature resolution that follows the following format:
DATE:
It is
resolved the following officers of (Environmental Education Association
of Washington's) be authorized to sign for withdrawal(s) or transfer(s)
from all accounts:
Board President
Executive Director
Treasurer
Whistle Blower
Employers must encourage
employees, volunteers and others related to Environmental Education
Association of Washington to report any violation of policy, procedure,
or ethics: illegal activity; or other misconduct by employees, volunteers,
or others related to Environmental Education Association of Washington.
Environmental Education
Association of Washington will protect employees and others that make
such reports to the extent allowed by applicable laws.
Reports can be made
directly to the Executive Director, Current President or President Elect.
To the extent that the activity or misconduct involves the Executive
Director the report should be made directly to the Current President
or President Elect.
Files & Record
Retention
All short term and
long term storage of administrative and financial records are provided
in a safe, secure and confidential manner. Depending upon the type of
record, the appropriate length of time for retention complies with legal
and funder requirements. Records relevant to foreseeable or pending
judicial or administrative investigations or proceedings are preserved
until the actions are concluded.
Capitalization
Policy
Acquisitions made by
Environmental Education Association of Washington should be capitalized
if any one of the following criteria are present:
Expenditure over $500.00
Additions that materially
improve quantity of fixed asset (additional memory is added to computer,
etc.)
Improvements that materially
improve quality or efficiency of the fixed asset (enhancement of software,
etc.)
Extraordinary repairs
(if fixed asset life is extended)
The cost of a fixed
asset should include all costs necessary to put a fixed asset in place
and in working order. This includes:
Invoice price less
discounts
Sales tax
Freight-in
Significant consulting
services
Installation charges
(including testing and preparation for use)
Donated Materials,
Facilities, and Services
It is the policy of
Environmental Education Association of Washington to review donated
materials, facilities, or services to affirm they comply with Environmental
Education Association of Washington’s mission. The executive
director will use established donation procedures and will sign all
in kind requests.
Donated materials,
facilities, or services shall be described including the material type
and condition but no value ascribed to the donated materials.
Donated materials,
facilities, and services shall be recorded as contributions and either
expensed or capitalized as deemed appropriate.
Long-Term Debt
Only the Executive
Director or Current President, serving as agent with approval from
the Board of Directors can enter into long-term debt. It is the
policy of Environmental Education Association of Washington to include
the current portion of long-term debt (the amount due to be paid within
12 months) with accounts payable on the year-end financial records.
Only the non-current portion of long-term debts will be included in
the long-term debt section of the year-end financial records.
Prepaid
Expenses
It is the policy of
Environmental Education Association of Washington to treat payments
of expenses on the financial records and to expense them in the proper
period. Payment of any expense of $100 or less will not qualify as a
prepaid expense. The accounting department will maintain records of
prepaid expenses.
General/Related
Policies and Procedures
Accounting Method
It is the policy of
Environmental Education Association of Washington to follow the accrual
method of accounting.
Computer Back-ups
It is the policy of
Environmental Education Association of Washington to back-up its computer
data weekly. At any time, there shall be two back-up copies, one of
which is to be kept off-site.
Conflict of Interest
It is the policy of
Environmental Education Association of Washington to have restrictions
on dealings or purchases of goods or services from governing board members,
employees, or other suppliers that would create a conflict of interest.
Any conflict or potential conflict shall be disclosed to the Board
of Directors which may direct that the purchase not go forward.
Employees and board
members are expected to use good judgment, adhere to high ethical standards
and avoid situations that create an actual or perceived conflict between
their personal interests and those of the agency. The EEAW
requires that the transactions employees and board members anticipate
in are ethical and within the law, both in letter and spirit.
If an employee or board
member has a financial or employment relationship with a vendor, potential
vendor, or consumer of the EEAW, the employee must disclose this fact
in writing to the Executive Director. The EEAW Board
of Directors will determine what course of action must be taken
to resolve any conflict it believes may exist. If the conflict
is severe enough, the EEAW Board of Directors
may be forced to ask the employee or board member to tender his/her
resignation. The EEAW Board of Directors has sole
discretion to determine whether such a conflict of interest exists.
Employees are encouraged
to seek assistance from the Executive Director with any ethical
concerns. However, the EEAW realizes this may not always
be possible. As a result, employees or board members may contact
the President of the Board of Directors to report any ethical
concern they cannot discuss with the Executive Director.
Employees should refer to the reporting procedures under the Anti-Harassment
and Non-Discrimination policy for reporting unlawful harassment or discrimination.
Contract Signing
Authority
It is the policy of
Environmental Education Association of Washington to grant authority
to sign contracts to the Executive Director or Current President .
Donation Database
Updates
It is the policy of
Environmental Education Association of Washington to set up a donor
file for each individual or organization from which funds have been
received.
Financial Statement
Preparation and Distribution
It is the policy of
Environmental Education Association of Washington to prepare and distribute
quarterly financial statements that will include the Statement of Financial
Position (Balance Sheet) and the Statement of Unrestricted Activities
by Function (Income Statement.) These statements will be prepared and
distributed within 30 days after the close of the quarter. The statements
will be distributed to the Executive Director and to the Board of Directors
for board meetings.
General Ledger Activity
It is the policy of
Environmental Education Association of Washington to record and post
at least monthly all general ledger entries to the general ledger.
All entries that do
not originate from journals should be supported by adequate documentation.
Nonrecurring adjusting
journal entries must be prepared to properly reflect account balances.
Nonrecurring adjusting
journal entries include, but are not limited to, the following items:
Recording of non-cash
transactions
Correction of posting
errors
Accrual of income and
expense items.
All journal vouchers
for entries into the general ledger need to be authorized by the Executive
Director, who is not involved in the origination of the entries.
Independent Contractors
It is the policy of
Environmental Education Association of Washington to evaluate criteria
established by the IRS when assigning individual employee or independent
contractor status.
Independent contractors
will sign a W-9 Form, independent contractor agreement, and will be
issued IRS Form 1099 if compensation is $600 or more.
A W-9 or substitute
form needs to be completed before any payments including CPE honorariums
or expenses can be issued. (See 1099 forms.)
Insurance
It is the policy of
Environmental Education Association of Washington that the Executive
Director annually review Environmental Education Association of Washington’s
insurance policies to ensure coverage and limitations adequately meet
the needs of Environmental Education Association of Washington, Board
of Directors, members, and employees and to report the findings to the
Board annually.
IRS Forms 990
It is the policy of
Environmental Education Association of Washington to allow public access
to IRS Form 990. The forms will be made available for a period of three
years from the due date for filing or the actual filing date, whichever
is later.
This access will be
provided at Environmental Education Association of Washington’s headquarters
at a time mutually agreeable between Environmental Education Association
of Washington and the individual requesting the inspection. Requests
for copies of Form 990 will be granted, without charge, other than a
reasonable fee for actual reproduction and actual postage costs of all
or any part of any application or return required to be made available
for public inspection to any individual who makes a request for such
copy in person or in writing.
The original of Form
990 will remain at Environmental Education Association of Washington’s
headquarters without exception.
IRS Forms 1099
It is the policy of
Environmental Education Association of Washington to complete IRS Form
1099 for all individuals and vendors (other than corporations, governmental
entities, and non-profit organizations) providing services and receiving
$600 or more from Environmental Education Association of Washington.
A record of vendor
Federal Identification Numbers and independent contractor Social Security
Numbers should be maintained for audit purposes. (See the Independent
Contractors Policy included in this manual.)
Loans Prohibition
It is the policy of
Environmental Education Association of Washington to prohibit loans
to employees and members under all circumstances,
Safe (For Sensitive/Critical
Files)
It is the policy of
Environmental Education Association of Washington to store important
documents such as audited financial statements, annual reports, articles
of incorporation, IRS determination letter, insurance policies, fixed
assets schedules, backup computer disks, most recent audited financial
statements and disaster recovery plans in a locked file. Currently
thee are housed in Preston Gates and Ellis Law offices in Seattle.
Access to the locked
file will be limited to the Executive Director and the Operations Manager
EEAW Collections
Policy
Membership Dues
Large Donor Grants/
Contributions
Checks for Products/
Services Rendered
Checks for Conference
fees and related monies from individuals or groups.
Document Prepared by Executive
Service Corps of Washington