Financial Governance and Reserve Fund Policy

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Financial Governance and Reserve Fund Policy DATE: September 16, 2015 TO: Alliance Board of Directors FROM: Rebecca Gilgen, Executive Director Policy Name: Financial Governance and Reserve Fund

balance, also known as, the reserve fund. Policy Objectives 1.

1 Financial Governance and Reserve Fund Policy DATE: September 16, 2015 TO: Alliance Board of Directors FROM: Rebecca Gilgen, Executive Director Policy Name: Financial Governance and Reserve Fund Policy Policy Intent and Summary The intent of this policy is to outline a structure and set of procedures that allow for the governance of the Alliance Budget and to determine the use for the annual balance, also known as, the reserve fund. Policy Objectives 1. Clarify how the Alliance finances are governed and establish policy for oversight that ensures transparency and ethical use of collaborative resources. 2. Establish policy and procedures for the use of reserve funds. Financial Governance Shaped by our Core Values, Mission and Purpose Our budget and the use of collaborative resources will reflect our core values. Our core values are: Courageous leadership and action Inclusive processes to maximize our resources Individual and Collective Learning, Growing, Assessing and Celebrating Authentic, timely and respectful communication Positive development for all youth in all places Youth engagement, voice and leadership Our Mission To coordinate a system of high-quality, accessible and fully resourced opportunities that lead to an increase in high school graduation and pathways to college or career and reductions in young people s experience of violence. Approved September 16,

2 Our Purpose The Brooklyn Bridge Alliance for Youth creates community-wide supports for youth in Brooklyn Center and Brooklyn Park to thrive and ensure they have access to high quality learning opportunities in the out-of-school time. The Alliance will focus its collective efforts on creating supportive systems, which promote positive outcomes for children and youth. Financial Governance Policy 1. The Alliance resources will be governed by the Joint-Powers agreement. Exhibit A 2. The Alliance budget, and all financial services provided to the Alliance, will be governed by the fiscal agent agreements. Exhibit B. Reserve Fund Classifications The following classifications taken from the Generally Acceptable Accounting Principles will be used to understand how we will designate amounts. Un-Restricted: represents amounts that can be spent on general purposes. E.g. operating costs such as rent, labor costs and utility bills. Restricted represents amounts that can be spent only for specific purposes stipulated by external contracts or obligations, creditors, grantors, contributors, or laws or regulations of other governments (examples: grants, debt covenants, unspent bond proceeds, statutory restrictions, etc ). Committed includes amounts that can only be used by the Alliance for specific purposes as determined by Alliance Board action (e.g. Funds set aside for Hennepin County Youth Sports Fund match ). Non spendable represents amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact (examples: assets, inventories, prepaid items, long-term receivables). Assigned - Includes amounts intended to be used by the Alliance for specific purposes but does not meet the criteria to be classified as restricted or committed. Assignments cannot exceed the available (spendable, unrestricted, uncommitted reserve fund in any particular fund). Approved September 16,

3 Reserve Fund Policy The reserve fund is set aside to stabilize finances by providing a cushion against unexpected events or to enable us to take advantage of opportunity. These reserves should not be used to cover long-term or permanent income shortfall. 1. Definitions and goals for the reserve fund a. The Alliance will have an operating reserve fund balance at the close of each fiscal year of at least 25% of its annual operating expenditure budget. This will exclude pass-through programs, one-time or unusual purchases. This will be referred to as the operations reserve. b. In addition to the operating expense reserve, if available, the Alliance can hold up to $50,000 in reserves to leverage funding opportunities, meet emergencies, or respond to unforseen situations that require an increase in the annual budget. This will be referred to as the leverage reserve. 2. Use of reserve fund a. The Alliance Board of Directors authorizes the Executive Director, in consultation with the Board Chair and Alliance treasurer, to assign unassigned fund balances that are above the opeartions reserve fund target of 25%, and are above the $50,000 leverage reserve purposes if available. b. When both restricted and unrestricted resources are available for use, it is the Alliance policy to first use restricted resources that are unassigned. Then, to use unrestricted resources as they are needed, unless otherwise required by the restricting authority. 3. Accounting for the reserve fund a. The reserve funds will be kept in a segregated account. b. The reserve funds will be reviewed annually by the Executive Leadership Team and the Board of Directors as part of the Alliance budgeting process. 4. Funding the reserve fund a. At year end, when there are unrestricted funds available, the Board will take action to determine if these funds will be used to restore the reserve funds that are below recommended levels. b. If there are no unrestricted funds that can be allocated, efforts should be made to restore reserves over a period not to exceed three years. This may accomplished by adopting a budget that is intended to restore the reserves. c. First priority would be given to maintain the operating reserve fund, then to maintain the leveraging reserve fund. Approved September 16,

4 Policy Procedures for Staff Alliance staff will follow these procedures: 1. Treasurer and Executive Director will draft quarterly budget status report for Board of Directors: a. Include revenues and expenses for Alliance general operating fund, reserve funds, and any auxiliary programming. (e.g. BrookLynk) b. Include revenue that is secured or pending. c. Identify balance of the reserve funds; either as line items or as separate budget. 2. Treasurer and Executive Director will draft quarterly budget status report memo for Board of Directors: a. Provide narrative related to expense and revenues drivers. b. Include narrative regarding revenue that may be secured, pending, or projected. c. Outline opportunities, needs, benefits and risks of resource use or acquisition. 3. Share the budget status report and memo with Executive Leadership Team or subcommittee of the ELT who will determine what board action is recommended. 4. Board will be presented with a budget status report and memo, and any recommendations of the Executive Leadership Team, at each quarterly meeting. 5. Staff will take action on board requests, or actions. Approved September 16,

5 Exhibit A: Brooklyn Bridge Alliance for Youth Joint Powers Agreement

14 Exhibit B: Brooklyn Bridge Alliance for Youth Fiscal Agent Agreement

PRINCE GEORGE COUNTY VIRGINIA

Financial Policy Guidelines For: PRINCE GEORGE COUNTY VIRGINIA Adopted: November 7, 2006 Revised: July 12, 2011 Revised: May 13, 2014 FINANCIAL POLICY GUIDELINES TABLE OF CONTENTS Page Policy Objectives