MASSACHUSETTS DESTINATION IMAGINATION (MADI) ACCOUNTING POLICIES AND PROCEDURES

Transcription

1 MASSACHUSETTS DESTINATION IMAGINATION (MADI) ACCOUNTING POLICIES AND PROCEDURES I. Introduction II. Division of Responsibilities III. Chart of Accounts and General Ledger IV. Cash Receipts V. Cash Disbursements & Expense Allocations VI. Credit Card Policy and Charges VII. Accruals VIII. Bank Account Reconciliation IX. End of Month, Periodic and Fiscal Year-End Close X. Financial Reports XI. Fiscal Policy Statements Appendix A Expense Approval Matrix Adopted September 20, 2015

2 I. Introduction The purpose of this manual is to describe all accounting policies and procedures currently in use at Massachusetts Destination Imagination (MADI) and to ensure that the financial statements conform to generally accepted accounting principles; assets are safeguarded; guidelines of grantors and dors are complied with; and finances are managed with accuracy, efficiency, and transparency. All MADI's staff/volunteers with a role in the management of fiscal and accounting operations are expected to comply with the policies and procedures in this manual. These policies will be reviewed annually and revised as needed by the Treasurer and approved by the Executive Director/Affiliate Director and the Board of Directors. II. Division of Responsibilities The following is a list of personnel who have fiscal and accounting responsibilities: 1. Board of Directors a. Reviews and approves the annual budget b. Reviews annual and periodic financial statements and information c. Reviews Executive Director's performance annually d. The Board Chair and one other board member appointed by the board will be authorized signers on the bank accounts e. Reviews and approves all contracts over $1,000. The exception to this policy shall be the procurement of tournament sites, these sites being dependent on geography, availability and site suitability. The Executive Director shall approve the contracts for tournament sites, and shall tify the board of any significant changes to the budget due to these costs f. Reviews and approves all n-budgeted expenditures over $1,000 g. Determines whether the organization should have an audit and, if so, chooses and contracts with the auditor. The auditor reports directly to the Board. 2. Executive Director a. Reviews and approves all financial reports including cash flow projections b. Sees that an appropriate budget is developed annually c. Reviews and signs all issued checks and/or approves check/expenses by the Treasurer. Appendix A, Expense Pre-Approval Matrix (8/30/15) outlines expense and approval levels. d. Reviews and approves all contracts under $1,000. The exception to this policy shall be the procurement of tournament sites, these sites being dependent on geography, availability and site suitability. The Executive Director shall approve the contracts for tournament sites, and shall tify the board of any significant changes to the budget due to these costs. e. Reviews and approves all grant submissions Adopted September 20,

3 f. Monitors grant reporting and appropriate release of temporarily restricted funds g. Is on-site signatory for all bank accounts h. Reviews all bank statements, reviews for any irregularities, and reviews completed monthly bank reconciliations i. Oversees adherence to all internal controls j. Monitors all program expenditures k. Monitors program budgets l. Reviews and manages cash flow m. Reviews and approves all reimbursements and fund requests n. Reviews all incoming and outgoing invoices o. Monitors all expenses to ensure most effective use of assets p. Oversees expense allocations q. Reviews all financial reports r. Reviews and informs volunteer staff on internal controls and accounting policies and procedures s. Initiates dor thank you letter ackwledgements 3. Associate Affiliate Director a. Monitors all program budgets b. Assists Executive Director with development of annual budget and program budgets. c. Assists Executive Director with dor ackwledgements as appropriate d. Is an approved check signer e. Reviews all financial reports 4. Treasurer a. Receives and opens all incoming accounting/financial mail, including bank statements. b. Overall responsibility for data entry into accounting system and integrity of accounting system data c. Makes bank deposits d. Processes invoices and prepares checks for signature e. Signs checks as approved by Executive Director f. Maintains general ledger g. Prepares monthly, quarterly and year end-financial reports h. Reconciles all bank accounts i. Mails vendor checks j. Manages Accounts Receivable Adopted September 20,

4 III. Chart of Accounts and General Ledger MADI has designated a Chart of Accounts specific to its operational needs and the needs of its financial statements. The Chart of Accounts is structured so that financial statements can be shown by natural classification (expense type) as well as by functional classification (program vs. fundraising vs. administration). The Treasurer is responsible for maintaining the Chart of Accounts and revising as necessary. The Chart of Accounts is attached to this manual as an addendum. The general ledger is automated and maintained using our accounting software (Quickbooks by Intuit) All input and balancing is the responsibility of the Treasurer with final approval by the Executive Director. The Executive Director should review the general ledger on a periodic basis for any unusual transactions. IV. Cash Receipts 1. Cash receipts generally arise from: a. Team fees b. Sales tables c. Raffles d. Grants e. DI, Inc. contribution f. Direct dor contributions 2. Processing receipts: a. Payment types: i. Online payments or credit cards will be processed electronically and deposited into the MADI checking account ii. Checks will be stamped "for deposit only", logged and deposited into the MADI checking account iii. Cash will be counted, it will be logged and deposited into the MADI checking account. iv. The Treasurer will make a copy of all checks received or scan and print. Documentation for all receipts (copy of checks, letters, etc.) will be attached to the deposit slip and filed chrologically. b. Treasurer and/or Regional Directors shall deposit receipts within ten(10) business days of receipt of funds. The deposits shall be separated into two(2) deposits, one for sales table funds and one for raffle funds. Adopted September 20,

5 c. Funds will be kept in a secure location until bank deposit is made d. For team fees, the Treasurer will credit the appropriate team. e. Sales tables receipts, cash and checks will be counted and verified at the training or tournament before delivered to the Treasurer with a signed receipt slip with totals of cash and checks. Sales funds shall be kept separate from raffle funds and ted separately on the signed receipt slip. Sales and raffle receipts will be posted to the appropriate training or tournament. V. Cash Disbursements & Expense Allocations 1. Cash Disbursements are generally made for: a. Payments to vendors for goods and services b. Taxes/license fees c. Volunteer/MADI staff training d. Meeting expenses e. Stipends 2. The Treasurer will keep and be responsible for the checkbook. 3. Checks will be written by Treasurer (or Executive Director) a. As invoices arrive b. As needed by MADI personnel for training, tournament or other approved expenses 4. Requests for cash disbursements will be submitted to the Treasurer by: a. Original invoice from vendor b. Expense reimbursement form accompanied by original invoice from MADI personnel, signed by Executive Director. The expense reimbursement form must detail goods or services purchased and purpose. c. MADI personnel shall submit expense reimbursement forms and all receipts for any advance payments. d. In event will checks be made out to "cash", "bearer", "petty cash", etc. 5. The Treasurer reviews all requests for payment and a. Verifies expenditure and amount b. Approves for payment in accordance with budget c. Verifies appropriate account allocation d. Processes payment and check production e. Immediately enters payment into Accounting program f. Checks over $5,000 will have written approval from the Executive Director and the Associate Director or Board Chair g. Indicates invoices as paid in a consistent manner h. Mails checks and appropriate backup documentation i. Files all backup documentation appropriately Adopted September 20,

6 VI. Credit Card Policy and Charges 1. The Executive/Affiliate Director, the Associate Affiliate Director and the Sales Director are the only MADI personnel authorized to be issued a MADI credit/debit card. 2. Personnel issued a MADI credit card will be held personally responsible in the event that any charge is deemed personal and unauthorized. Unauthorized use of the credit card includes: personal expenditures of any kind; expenditures which have t been properly authorized, meals, entertainment, gifts or other expenditures which are prohibited by budgets, laws and regulations, and the entities from which MADI receives funds. 3. Receipts for all credit card charges will be given to the Treasurer within one month (4 weeks) of the purchase. The Treasurer will verify all credit card charges with the monthly statements. Receipts will be attached to the monthly statement. 4. Accounts to be charged will be written on the statement. The Treasurer will post the charges against the appropriate accounts. 5. Monthly credit card statements will be reviewed and approved by the Affiliate Director, Associate Affiliate Director and Board Chair on a quarterly basis. VII. Accruals 1. To ensure a timely close of the General Ledger, MADI may book accrual entries. 2. Accruals may include: a. Tournament site charges still pending at end of fiscal year b. Monthly interest on any bank accounts, certificates of deposit, etc. VIII. Bank Account Reconciliation 1. All bank statements are mailed to and opened by the Treasurer. 2. The Treasurer will: a. Reconcile each monthly statement in a timely manner as follows: i. A comparison of dates and amounts of deposits as shown in the accounting system and on the statement ii. A comparison of cleared checks with the accounting record including amount, payee and sequential check numbers iii. An investigation of any rejected items iv. A comparison of inter-account transfers b. Verify that voided checks, if returned, are appropriately defaced and filed. c. Investigate any checks that are outstanding over six months d. Attach the completed bank reconciliation to the applicable bank statement, along with all documentation Adopted September 20,

7 e. Provide the reconciliation report to the Executive Director to be reviewed, approved, dated, and initialed IX. End of Month, Periodic and Fiscal Year-End Close 1. The Treasurer will review and sign off on all month- and year-end journal entries. They will be printed and filed for audit trail purposes. 2. At the end of each month and fiscal year end, the Treasurer will review all balance sheets accounts including verification of the following balances: a. Cash accounts match the bank reconciliations b. Accounts receivable and payable accounts match outstanding amounts due and owed 3. The income and expense accounts review will include reconciliation to amounts received and expended. 4. Once the final monthly and fiscal year-end financial statements are run, reviewed, and approved by the Executive Director, more entries or adjustments will be made into that month or year's ledgers. 5. At the end of the fiscal year, the Treasurer or outside accounting firm/cpa will prepare the Return for Organization Exempt from Income Tax (IRS Form 990). The return will be presented to the Executive Director, the Board Chair (and the Board Finance Committee, if and when one is formed) for their review and approval. The Treasurer will then file the return with the IRS by the annual deadline. 6. All other appropriate government filings including sales tax payments and those required by the MA Department of Revenue and the MA Attorney General's Office will be completed and filed with the appropriate agency by the Treasurer. X. Financial Reports 1. The Treasurer will prepare the monthly and annual financial reports for presentation to the Executive Director and Associate Affiliate Director for review. 2. The reports will include: a. Balance sheet b. Statement of income and expenses c. Budget versus actual report d. Five-year comparison (annually, at year end only) 3. Periodic and annual financial reports as ted above, will be submitted to the Board of Directors for review and approval. Adopted September 20,

8 XI. Fiscal Policy Statements 1. All cash accounts owned by MADI will be held in financial institutions which are insured by FDIC. No bank account will carry a balance over the FDIC insured amount. 2. No travel cash advances will be made except under special conditions and preapproved by the Executive Director (or Board Chair, if for Executive Director.) 3. Reimbursements will be paid upon complete expense reporting and approval using the official MADI form. Reimbursements to the Executive Director will be authorized by the Board Chair. 4. Any donation will be recorded and a letter of ackwledgement with appropriate tax information will be send to the dor by the Executive Director within two weeks of receipt of the donation. 5. The Executive Director, one designated Board member and the Treasurer are the signatories on MADI's bank accounts. Appendix A, Expense Pre-Approval Matrix (8/24/15) outlines expense and approval levels. 6. Bank statements will be reconciled monthly by the Treasurer 7. All financial records will be retained for the time specified in the Board approved Document Retention and Destruction policy 8. Correction fluid and/or tape will never be used in preparing any accounting documents Adopted September 20,

9 Appendix A Expense Approval Matrix Expense Role Pre-approval Required? If yes, must be approved by AD prior to purchase Comments Under $100 RD ACM Sales AD $101-$250 RD yes For any expenses that total $100 above your allocation for supplies and/or for food ACM Sales AD yes $251-$500 RD yes ACM yes Sales yes For any purchases that are t outlined in the approved budget for that fiscal year AD Over $500 AD yes Any expenses that are t budgeted and are over $500 must be approved by the board of directors. Over $5000 AD yes All budgeted expenses over $5000 must have written approval from the AD and the Associate AD or Board Chair before the payment is made Adopted September 20,