Financial Management Policy

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DRAFT Policy (Operational): Financial Management

This is a DRAFT policy and is not yet in force.

Purpose

This policy is designed to ensure that EBC's financial affairs are managed in a prudent and responsible manner.

Philosophy

The Edmonton Bicycle Commuters’ Society (EBC) strives to have the best possible internal controls and financial systems. These financial policies are created and approved by the Board of Directors to guide the work of staff and outsourced financial management.

Policy

  1. Finance Committee
  2. The Board of Directors of EBC may annually appoint a Finance Committee who works under the Treasurer to ensure the appropriate preparation of an annual budget, appropriate handling and distribution of funds, and the appropriate preparation and presentation of regular financial statements. The Finance Committee directs, reviews, and presents the annual audit to the Board of Directors.

    In the absence of a finance committee, these activities will be carried out by the Treasurer, and the committee’s oversight duties, described below, will be carried out directly by the Board.

  3. Approval of plans and commitments before they are implemented
  4. The Board of Directors will set the annual budget, based on EBC’s fiscal year (September through August), to direct how funds are spent. Board approval is necessary in order to spend significant funds or make significant financial commitments to projects that have not already been incorporated into the approved budget.

    When a timely decision is necessary, the Executive may approve additional spending or commitments, subject to board ratification.

  5. Accurate and timely financial reports and information returns
  6. The Finance Committee oversees that EBC provides accurate, timely financial reports and information returns. The Finance Committee will regularly review financial statements, including a balance sheet and a comparison of actual financial activity to the approved budget. Monthly Financial statements will be made available to members of the Finance Committee and Board of Directors within the first 15 days of the following month. A year-end statement will be available to all interested parties within the first 30 days of the following year.

    Other financial reports required by government or granting agencies will be completed and submitted prior to the published deadline.

  7. Banking institutions and accounts
  8. In order to minimize risk and maximize benefit, EBC uses only banking and savings institutions which are insured by the agencies of the Government of Canada, Alberta or the United States. The amount on deposit with any one institution may not in the usual course of business exceed the insured limit (unlimited for Alberta Credit Unions, $100,000 for bank deposits).

  9. Deposits
  10. All income intended for EBC will be properly received, deposited, recorded, reconciled, and kept under adequate security. Any cash received must be promptly and fully deposited.

  11. Grants, gifts, and pledges
  12. All grants and gifts will be properly received and recorded. Compliance with terms of any related restrictions will be monitored by staff or volunteers, and reported to the Finance Committee. Pledges are recorded at the time they are received.

  13. Donated good and services
  14. Donated goods and services are recorded in the accounting records when they are received. Gifts are recorded at fair market value.

  15. Fixed assets
  16. Expenditures for land, building and equipment are recorded at cost. Donated assets and capitalized donated leases are recorded at their estimated fair market values at the date of donation. Amortization expenses are calculated using the straight‐line method and the following estimated useful lives:

    • Buildings and improvements 10‐35 years
    • Furniture and equipment 3‐10 years
    Maintenance and repairs, which materially add to the value of the property or appreciably prolong its life, are recorded as an increase to the appropriate asset account. EBC capitalizes all fixed assets with a cost greater than or equal to $500 and a useful life of at least three years, unless otherwise stipulated by a grant. When an asset is purchased through a grant, the grant’s capitalization rules apply. EBC will conduct an annual inventory of fixed assets and maintain a central list of fixed assets which includes date of purchase, registration numbers, warranty information, original cost, and estimated life.

  17. Line of credit
  18. At the discretion of the Finance Committee, EBC may establish and maintain an appropriate line of credit to ensure regular cash flow. The use of this line of credit may be approved by the Treasurer, and shall be reported to the Finance Committee.

  19. Cash Handling
  20. A cash float will be available for BikeWorks and other sales functions. Cash significantly in excess of the approved float should be stored in a separate, secure location until it can be deposited. The Finance committee will establish a cash handling and deposit procedure for minimizing the risk of theft by staff and volunteers.

  21. Credit card
  22. EBC may maintain credit card accounts to facilitate efficient operations. Credit cards will only be issued in the name of specific employees or directors, with specific credit limits as appropriate. The card will be adequately safeguarded at all times. All credit card transactions will be for proper purposes, as outlined in the annual budget or approved by the board. Transactions will be properly recorded and receipts submitted to the Treasurer.

    Any misuse of organisation credit cards will result in the immediate revocation of the card, and the requirement to repay the misused funds.

  23. Procurement and purchasing
  24. EBC will always seek to maximize value and cost‐effectiveness in all procurement and purchasing. A competitive bid process will be used for purchases over $10,000. Bids should be solicited for smaller items whenever a bid process is practical.

  25. Disbursements
  26. Funds will be disbursed only upon proper authorization of management and only for valid business purposes. All disbursements will be initiated only from properly authorized documentation and will be properly recorded. No check may be made out to Cash. The Board shall designate the President, Treasurer, and up to two additional Board members deemed appropriate as authorized signers of checks on behalf of EBC. Checks must carry two signatures unless otherwise specifically authorized in advance by the Board of Directors (such as for payroll or office rent). No check signer may sign a blank check.

  27. Payroll
  28. Payroll disbursements will be made only to bona fide employees and only upon proper authorization. Changes to each payroll will be properly documented. EBC will ensure that payroll disbursements are properly recorded and that related remittances (such as payroll deductions and employee benefits) are made in a timely fashion. Payroll checks will not normally be released prior to payday, and employee advances are not permitted. Early payment for time already worked may be made at the Treasurer’s discretion.

  29. Reconciliation of banking statements
  30. All banking statements will be delivered to a designated individual who is not otherwise involved in the preparation of cheques, the depositing of funds, or is an authorized signer of checks. This designated individual shall review and initial each statement on a timely basis, and will reconcile each bank account monthly prior to the issuance of financial statements.

Definitions

Scope

This policy applies to all monetary transactions at EBC.

Exceptions

None.

Implementation and Monitoring

The EBC Finance Committee is responsible for overseeing the enactment of this policy.