Transport Workers Union of Australia

Transcription

1 Transport Workers Union of Australia Financial Policies & Procedures Final Report 12 March 2013 Attention: Dermot Ryan Transport Workers Union of Australia Chief of Staff Submitted by: Teena Balgi Senior Project Manager Management Support Matrix on Board Matrix on Board Page 1

2 Contents About the Financial Policies and Procedures 3 Appendix: Financial Policies and Procedures 4 Matrix on Board Page 2

3 About the Financial Policies and Procedures The Transport Workers Union of Australia National Office (National Office) contracted Matrix on Board (Matrix) to develop the National Office s Financial Policies and Procedures (Financial P&Ps). The Appendix of this document contains the Financial P&Ps. We understand that these Financial P&Ps will be provided to the National Committee of Management (NCOM) for consideration and approval. Once the Financial P&Ps are finalised it is important that they are properly implemented. The Financial P&Ps outline new systems and require the creation of new forms and resources. Matrix recommends that the Financial Controller, under the supervision of the Chief of Staff and National Assistant Secretary, ensure that the appropriate systems and resources are in place to support the implementation of Financial P&Ps. Matrix s work with the National Office has raised some issues in relation to Rules of the Transport Workers Union. Matrix has provided a report to the National Office outlining these concerns. How the Financial Policies & Procedures are written While many of the systems and resources outlined in the Financial P&Ps are not in place yet, the Financial P&Ps are written in the present tense that is, as if all the processes outlined in them are currently happening. This is so the language of the Financial P&Ps does not need to be changed once the systems are in place. Some sections of the Financial P&Ps could not be completed at this time. Where a section is not complete, the reasons why have been included in a text box. We recommend those sections be updated in early 2013 to address unresolved issues and to reflect changes from the Fair Work (Registered Organisations) Amendment Act 2012 that were not in force. Matrix on Board Page 3

4 Appendix: Financial Policies and Procedures Transport Workers Union of Australia National Office Financial Policies and Procedures Prepared by Matrix on Board: 22 November 2012 Approved by the National Secretary: Approved by National Trustees: Approved by NCOM: Review Date: (2 years from NCOM approval): Change History: Date Policy affected Reason for change Who wrote the changed policy Matrix on Board Page 4

5 Table of Contents 1. Introduction 6 2. Financial delegations 7 3. Financial oversight Financial training Annual financial reports Budgets Banking Procurement: purchasing goods and services Credit cards, fuel cards & cab charge cards/vouchers Payroll Petty cash Asset Management Vehicles and equipment provided to staff Travel Reimbursement of other staff expenses Insurance 42 Matrix on Board Page 5

6 1. Introduction These Financial Policies and Procedures articulate the commitment of the Transport Workers Union of Australia to protect the contributions of our members and to encourage best practice in relation to our finances. This Manual covers critical financial aspects of the work of the National Office. However, it does not cover:» The work of the branches, though it provides a model that can be readily adopted or adapted by the branches if they wish to» Human resources, administration, information technology, management or governance aspects of the National Office s work» Non- financial reporting obligations to Fair Work Australia» Disclosure requirements around remuneration and conflicts of interest introduced in the Fair Work (Registered Organisations) Amendment Act There is an ongoing review process for this Manual. The Manual is reviewed within two years of NCOM s approval and then every two years thereafter. It is also be amended earlier if:» Our practices are updated or refined according to best practice» There are changes to the law or government policies that impact on our financial practices» The Rules of the Union are changed in a way that affects our financial practices» It becomes clear that the current policies are incorrect or there is a critical gap. If Policies are reviewed or if changes are made these are noted both on the cover sheet to this Manual and in the individual Policy. Matrix on Board Page 6

7 2. Financial delegations Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: This policy consists of a Financial Delegations Table which sets out the role of NCOM, the Trustees, the National Secretary (NS), the National Assistant Secretary (NAS), Chief of Staff (CoS) and Financial Controller (FC) for each area covered by these Financial Policies and Procedures. More details are available in individual policies. The table doesn t cover general financial oversight of the National Office, which is outlined in the next policy. Throughout these Policies, where the Chief of Staff has responsibility for a role, the National Secretary or National Assistant Secretary can also exercise that responsibility if needed. Similarly the National Secretary can exercise any responsibility delegated to the National Assistant Secretary. Abbreviations: NCOM= National Committee of Management; NS = National Secretary; NAS = National Assistant Secretary; CoS = Chief of Staff; FC = Financial Controller. Annual financial reports Activity NCOM Trustees NS NAS CoS FC Comment Preparation P Oversight of preparation P Approval of NCOM statement and final sign off P NS & NAS approve as part of NCOM Provision of reports to member P Provision of reports to FWA P P NS signs designated officer statement; FC liaises with FWA Matrix on Board Page 7

8 Activity NCOM Trustees NS NAS CoS FC Comment Budgets Preparation P Oversight of Preparation P P Approval P Monitoring P P Reviewing P Banking Administration of MYOB, online banking and cheques P P P P P P P Opening, closing and changing authoriser on accounts P P P Need 2 authorisers - at least 1 Trustee Approval of invoices or bills for processing P P P Depends on nature of invoice and amounts involved Weekly authorisation of wages and urgent invoices to allow for online banking payment Monthly authorisation of invoices, and oversight of payments, wages and statements P P P P Need 2 authorisers - at least 1 Trustee Authorisation of online banking P P P Need 2 authorisers - at least 1 Trustee Signing cheques (except Training Fund) P P P Need 2 authorisers - at least 1 Trustee; Training fund needs signature of NS and 2 Trustees. Matrix on Board Page 8

9 Procurement & purchasing Activity NCOM Trustees NS NAS CoS FC Comment Approval of within budget P P Approval of urgent or unforseen purchases outside budget Approval of purchases up to $5000 Oversight of tender processes P P P These purchases must be put before NCOM at the first available opportunity P P Preparation and administration of tenders P P Preparation and maintenance of Preferred Supplier List (PSL) Approval of the PSL P P P P Credit cards, fuel cards and cab charge cards Approval of new credit cards P P P Need 2 authorisers - at least 1 Trustee Approval of new fuel cards P P P Need 2 authorisers - at least 1 Trustee Approval of cab charge cards P P P Need 2 authorisers - at least 1 Trustee Oversight of card statements P P Payroll Approval of Time Sheets, and Holiday & Allowances Sheets Processes payroll P P Matrix on Board Page 9

10 Activity NCOM Trustees NS NAS CoS FC Comment Petty cash Administers petty cash P Approval of petty cash purchases P Approval of petty cash cheques P Asset management Maintains Assets Register and Depreciation Schedule P Approval of disposals of assets P P Approval of capital budgets P Vehicles and equipment Maintains and administers National Office equipment P Reimbursement of staff expenses Administration of reimbursement system P Approval of reimbursement P P Insurance Oversight of insurance polices and their currency P P Approval of purchase of insurance polices P P Matrix on Board Page 10

11 3. Financial oversight Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: The Transport Workers Union (TWU) is committed to robust financial management, to ensure that the interests of our members are protected. Sound financial management of any organisation requires a series of checks and balances to be in place. This document is the Framework for the Financial Oversight of the National Office (the Framework). It outlines the overall checks and balances in place to protect the interests of our members. The Framework is complemented by the rest of the Financial Policies and Procedures, which set out how our financial systems work in more detail. There are a number of key stakeholders who have financial responsibilities in TWU. They are:» The National Council» NCOM» The National Trustees» The National Secretary. This Framework outlines the roles of each of these stakeholders and their responsibility in relation to financial management of the National Office. Role of National Council The National Council has supreme control of the TWU. It meets at least annually and considers a range of matters including amendments to the Rules and strategic priorities for the coming year. In relation to financial management, the National Council:» Considers and approves the annual audited financial reports this allows the National Council to understand the general financial health of the Union» Considers and approves the level of fees for the coming year this allows the National Council to balance issues around funding the work of the Union against membership fees» Considers and approves whether the National Office will incur a deficit or surplus in the coming year and the impact this will have on reserve funds this allows the National Office to oversee the financial health of the Union, as well as ensure there is sufficient funding for the work of the National Office. The National Council is advised in its financial management role by NCOM and the Finance Committee. The Finance Committee is a subcommittee of the National Council and is made up of the National Secretary, the Matrix on Board Page 11

12 National President and the three National Trustees. It meets annually around the time of the National Council meeting. Role of National Committee of Management When the National Council is not assembled, NCOM has the same powers of the National Council with some exceptions. NCOM meets monthly, and is involved in strategic decision making and general oversight of the work of the National Office. NCOM is responsible for the regular oversight of the financial health of the National Office. In relation to financial management, NCOM:» Considers and approves the operational and capital budgets of National Office this allows NCOM to ensure that the budgets are appropriate to meet the strategic priorities of the National Office and that the strategic priorities of the National Office are within budget» Reviews quarterly financial reports for the National Office, including a profit and loss statement to budget, a balance sheet, a cashflow forecast and a report against the capital budget this allows NCOM to ensure that the National Office is financially healthy and to monitor compliance with the budget» Monitors the preparation of the annual audited financial reports and approves them this allows NCOM to ensure that this aspect of the National Office s obligations under the Fair Work (Registered Organisation) Act 2009 is met» Approves expenditure that is significantly outside budget this allows NCOM to monitor expenditure above budget» Considers and approves the remuneration of paid officials in the National Office this allows NCOM to ensure that officials are appropriately remunerated and that there is compliance with the budget. NCOM will also receive the minutes of the meetings of Trustees (see below). Role of Trustees Meeting The Trustees control the property of the Union, subject to the direction of the National Council. As part of the Finance Committee, they also scrutinise the accounts. The Trustees role is one of scrutiny, as opposed to financial decision making. The Trustees meet monthly to conduct their scrutiny role. In relation to financial management, the Trustees Meeting:» Approves the payments of creditors and scrutinises payments (including prompt payments), wages, employment benefits, travel expenditure, fuel card payments and credit card payments this allows the Trustees to scrutinise the transactions of the National Office» Reviews quarterly financial reports for the National Office, including a profit and loss statement, a balance sheet, a cashflow forecast and a report against the capital budget this allows the Trustees to understand the financial health of the National Office. Matrix on Board Page 12

13 The Trustees receive the minutes of NCOM meetings. Role of National Secretary One of the roles of the National Secretary is to run the National Office. The National Office conducts national campaigns to further the interests of members. The National Secretary does his or her work under the overall direction of the National Council, and the more regular direction of NCOM. In relation to financial management, the National Secretary:» Ensures that there are sound financial policies and procedures in place and that they are followed this ensures sound financial processes within the National Office and compliance with obligations under the Fair Work (Registered Organisation) Act 2009» Provides National Council, NCOM and the Trustees with relevant financial information this ensures that National Council, NCOM and the Trustees have the information necessary to carry out their roles» Ensures the preparation of the annual audited financial reports under the direction of NCOM this ensures that this aspect of the National Office s obligations under the Fair Work (Registered Organisation) Act 2009 is met» Ensures that the operations of the National Office are conducted within the budget approved by NCOM and that expenditure that is significantly outside budget is approved by NCOM this helps TWU stay financially viable» Ensures laws are complied with including those outlined in the Fair Work (Registered Organisation) Act 2009, tax law and employment law this protects TWU and its staff. The National Secretary may delegate these functions to the National Assistant Secretary, in line with the Rules. Matrix on Board Page 13

14 4. Financial training Event Date Event Date Creation of Policy: Review date 1: Endorsement by NCOM: Review date 2: Under the recent changes to the Fair Work (Registered Organisations) Act, the Rules of all Unions and branches must be amended to require all officials of the Union and branches who have financial management duties to attend financial training. The training:» Must be approved by the General Manager of FWA» Must cover the official s financial duties» Must be done within 6 months of the person taking office or if the person is already in office within 6 months of the law coming into force. The law is likely to come into force on the 30 June It is unclear how far this provision reaches, and we recommend the National Office seek the advice of their lawyers or the Australian Council of Trade Unions on who requires training under this law. It may well extend to all members of NCOM and of the National Council. We recommend that once it is clear who requires training, the National Office should devise a policy to ensure that all included officials are provided with approved training. Matrix on Board Page 14

15 5. Annual financial reports Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: All Unions need to prepare annual financial reports for the membership and Fair Work Australia (FWA). This Policy will look at how the Full Report and the Concise Report are prepared each year. The Full Report includes a General Purpose Financial Report (GPFR) and an Operating Report. The Concise Report includes the Operating Report, a truncated version of the GPFR and some extra information. Chapter 8 of the Fair Work (Registered Organisations) Act 2009 (RO Act) outlines the requirements for annual financial reporting for Unions. These are supplemented by the Financial Reporting Guidelines issued by the Australian Industrial Registry and adopted by FWA. FWA has also produced some very useful factsheets on this topic. TWU s Rules also discuss the annual financial report and appointment of the auditor. Selection of the auditor In accordance with the Rules each year the National Council appoints a properly qualified auditor (Rule 80). The RO Act sets out the necessary qualifications for the auditor (Chapter 8, Part 3, Division 4). The National Office is committed to independent auditing of the accounts and will work transparently with the auditors. The National Office is also committed to ensuring continual improvement in financial management. One aspect of this is ensuring that there are fresh eyes looking at the National Office s finances periodically. This can occur through an external review of financial practices, or as a result of a change of Financial Controller or auditor. In the absence of external reviews or changes in the Financial Controller, the National Secretary will recommend a change in auditor at least every 6 years. This also works to reduce the risk of complacency and collusion. Preparation of the annual financial reports The annual financial report is prepared in the following way: 1. As TWU follows the calendar year, preparation work for the audit occurs from November through January. The Financial Controller prepares the draft Full and Concise Reports. These are provided to the auditor. 2. The auditor conducts their on- site audit in February (approximately). 3. Relevant changes are made to the Full and Concise Report, based on the auditor s feedback. 4. The National Assistant Secretary and the Financial Controller meet to agree on the Full and Concise Reports. Matrix on Board Page 15

16 5. The National Assistant Secretary submits the Full and Concise Report to NCOM, for approval and signing, which is documented in the NCOM minutes. NCOM also passes a resolution that members can be provided with a copy of the Concise Report as opposed to the Full Report. 6. The auditor views the NCOM minutes approving the Full and Concise Report before signing the auditor s report. 7. The Full and Concise Report, including the signed auditor s reports are tabled at the National Council meeting. The National Council votes on adopting the Full and Concise Reports. 8. The Full and Concise Reports, including the signed auditor s reports, are then passed by NCOM again. This must occur on or before 30 June each year. Provision of reports to members The Concise Report is provided to members, in accordance with the requirements of the Fair Work (Registered Organisations) Act 2009, on or before 31 May each year. Reporting to Fair Work Australia The Financial Controller lodges the following documents with FWA within 14 days of NCOM s final approval of the Full and Concise Reports:» A copy of the Full Report» A copy of the Concise Report» A certificate signed by the National Secretary, as the designated officer of the National Office, certifying that: the documents lodged are copies of the documents provided to members the documents lodged are copies of the documents presented to a meeting of the Committee of Management. The Financial Controller liaises with FWA regarding any questions FWA have about the reports. The Union is also required to lodge with FWA a statement showing the particulars of each loan, grant or donation of an amount exceeding $1,000 made by the National Office during the year. This statement is prepared by the Financial Controller, and approved and signed by the National Secretary. The Financial Controller ensures the statement is lodged with FWA within 90 days of the end of the year. Management letter The auditor also provides the Union with what is known as a management letter. This letter sets out any issues the auditor has with the internal processes. The National Assistant Secretary, with the Financial Controller, prepares a plan of action to respond to the issues raised in the management letter. Once this letter is received it is provided to NCOM along with the plan of action, for discussion. Matrix on Board Page 16

17 6. Budgets Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: This Policy outlines the annual operational and capital budgeting process. The operational budget estimates expenditure for the general running of the National Office each year. The capital budget includes projected expenditure on capital purchases for the coming year. Budgets are important tools for ensuring that there are sufficient funds for the TWU to be able to perform its work, and to ensure that expenditure is within means. The annual budgeting process The National Assistant Secretary, Chief of Staff and Financial Controller prepare draft operational and capital budgets in September each year. The draft budgets are provided to the Trustees Meeting for comment and input, and to NCOM for comment or approval at its October meeting. Following the NCOM meeting the budgets may need to be amended. Every effort is made to ensure that the budgets are approved by NCOM by the November meeting, or December meeting at the latest. Budgets for campaigning activity are prepared as part of the operational budget. Whilst specific campaign spending cannot always be forecast, an aggregate operational budget is set based on strategic priorities. Specific campaign budgets and any amendments to them do not require the approval of NCOM unless the aggregate operational budget is likely to be breached. However, every effort is made to provide NCOM with specific campaign budgets and any amendments to them. Once the operational budget is approved the Financial Controller enters them into the financial reporting system. Capital budgets are prepared considering the asset replacement and new asset requirements of the coming year, particularly taking into account computing and motor vehicle needs. Monitoring expenditure against budget The adopted budgets are the reference point against which actual income and expenditure can be compared to ensure that TWU is financially on track. The profit and loss statements that form part of the regular reports for the National Assistant Secretary, National Secretary, Trustees and NCOM indicate expenditure against the operational budget. Capital purchases against the capital budget are reported as part of the quarterly reports to NCOM and the Trustees Meeting. Matrix on Board Page 17

18 Reviewing the budget The campaign, operational and capital budgets are reviewed quarterly by the National Assistant Secretary, Chief of Staff, Financial Controller and by the Trustees Meeting. Consideration is given to whether the budgets are sufficient to meet the expenditure needs of the National Office. If the budgets need amending, revised budgets are prepared and provided to NCOM for consideration, discussion, amendment and approval. Matrix on Board Page 18

19 7. Banking Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: The Banking Policy should be read in conjunction with the Procurement (see Section 8), Credit card (see Section 9) and Payroll (see Section 10) policies. These policies detail how expenditure is approved. The Banking Policy outlines how approved expenditure is paid, as well as how bank accounts are maintained. Bank accounts The National Office currently has four general bank accounts and two investment accounts. Any changes in these bank accounts require the authorisation of any two of the National Secretary, National Assistant Secretary (if in accordance with a current authorised delegation), and the three Trustees, with at least one of the people being a Trustee. Changes to bank accounts include opening and closing of accounts, issuing of credit cards and changes in authorisers. The Financial Controller conducts bank reconciliations at least monthly. Approval of invoices once received Goods and services are purchased in accordance with the Procurement Policy (see Section 8). Once an invoice or bill is received it is provided to the Financial Controller. The Financial Controller checks it against the Purchaser Order Form and considers whether the goods received match those ordered. Any aberrations are noted. The process for each type of bill or invoice is as follows:» One- off purchases and ongoing services (eg electricity) For one- off purchases the Financial Controller provides the invoice or bill to the person who approved the purchase, usually the National Assistant Secretary or Chief of Staff. For ongoing services the Financial Controller provides the invoice or bill to the Chief of Staff. The National Assistant Secretary or Chief of Staff checks that the invoice reflects the nature of the goods or services received and the price agreed. They can take advice from the Financial Controller on this, who is also responsible for raising concerns about any inconsistencies. If the Chief of Staff or National Assistant Secretary have concerns about the invoice or bill they will ensure it is investigated and if appropriate pursued with the supplier. These concerns will be noted in writing and kept with the invoice or bill. When the Chief of Staff or National Assistant Secretary is satisfied that the invoice or bill is accurate and justified they: (1) sign it indicating that the goods or services received reflect Matrix on Board Page 19

20 those ordered; (2) indicate which MYOB account and cost centre it refers to; and (3) provide any supporting documentation.» Credit card bills The Financial Controller obtains invoices, receipts or signed notes (see Section 9 for the nature of these notes) from cardholders for all transactions. The bills are provided to the Chief of Staff. They consider the bill in light of the usual expenditure. When the Chief of Staff is satisfied that the bill is accurate and justified they: (1) sign it; and (2) indicate which MYOB account and cost centre it refers to.» Fuel card bills For the fuel card attached to the general use National Office vehicle, the Financial Controller checks receipts against the line items in the fuel card bill. The Financial Controller provides the bills for all fuel cards to the Chief of Staff. They consider the bill in light of the usual expenditure. When the Chief of Staff is satisfied that the bill is accurate and justified they: (1) sign it; and (2) indicate which MYOB account and cost centre it refers to.» Cab charge statements The Financial Controller will provide individual cab charge statements to all cardholders. Cardholders are required to provide receipts or signed notes (see Section 9 for the nature of these notes), to justify cab charge usage and note the meeting or event attended. The cab charge statements are then provided to the Chief of Staff. They review the bill in light of the information provided by cardholders and usual expenditure. When the Chief of Staff is satisfied that the bill is accurate and justified they: (1) sign it; and (2) indicate which MYOB account and cost centre it refers to. If the Chief of Staff has concerns about the use of the credit cards, fuel cards or cab charge cards he will raise these issues with the cardholders. As the Chief of Staff has a credit card and cab charge card, and may use a fuel card, it is important to note that the Trustees also play an oversight and monitoring role of the use of credit cards, fuel cards and cab charge cards. Once all the invoices and bills have been signed off by the National Assistant Secretary or Chief of Staff, where this has not happened already, the Financial Controller enters them into MYOB. Once approved, credit cards, fuel cards and Epac payments are paid by direct debit. All other invoices need the authorisation outlined in the below section Authorisation and payment of wages and urgent payments or Authorisation of remaining invoices depending on the nature of the invoice before they can be paid. Wages are processed weekly. Time Sheets, and Holidays and Allowances Sheets, are approved in line with the Payroll Policy (see Section 10). The Financial Controller enters wages in MYOB. Wages then need to go through the authorisation process in outlined in Authorisation and payment of wages and urgent payments. Authorisation and payment of wages and urgent invoices Any payments that can be left until the monthly Trustees Meeting are left until that time. They are dealt with in the section Authorisation of remaining invoices. Matrix on Board Page 20

21 This section deals with authorisation and payments of invoices that cannot wait until the Trustees Meeting (urgent payments) and wages. The Financial Controller enters wages and urgent payments into the online banking system. This process occurs weekly before staff pay day. The Financial Controller then meets with the National Assistant Secretary. Meetings are minuted. The meeting can be face- to- face or over the phone. The process for the meeting is: 1. The opening and closing bank statement balances are checked 2. The Financial Controller provides the National Assistant Secretary with the relevant documents for each urgent invoice or bill, and the overall wage calculation. If the meeting is over the phone, the Financial Controller mails, or scans and s, the relevant documents to the National Assistant Secretary. 3. National Assistant Secretary considers each urgent invoice and the wage calculation. 4. If the National Assistant Secretary is of the view that the invoices and wages have been appropriately incurred they sign them indicating they authorise them. The National Assistant Secretary also checks that the online banking entry for the invoice or wage payment is accurate. 5. If the National Assistant Secretary has concerns about the invoices, the matter is discussed between the Financial Controller and National Assistant Secretary until resolved. The Financial Controller must remove from the online banking system any payments which the National Assistant Secretary has not authorised until the National Assistant Secretary authorises them. 6. The National Assistant Secretary approves for payment in the online banking system the invoices and wages they have authorised. The Financial Controller then prepares a summary sheet for the wages and urgent payments, which is ed to a Trustee. The Financial Controller takes the Trustee through the document over the phone. The Trustee checks the online payment entries against the summary sheet. If the Trustee is happy that the online banking entries reflect the summary sheet, they approve the payments in online banking system. In the absence of the National Assistant Secretary in the above meetings, payments can be authorised by two Trustees. One Trustee must consider the individual invoices and wage calculation, like the National Assistant Secretary usually does. Authorisation of remaining invoices The Financial Controller enters the invoices that are held over until the Trustees Meeting into the online banking system before the Trustees Meeting. The Trustees Meeting is a monthly meeting attended by the three Trustees, the National Assistant Secretary and Financial Controller. The Trustees Meetings are minuted. The meetings are face- to- face (quarterly) or over the phone (otherwise). The process for the meeting is: Matrix on Board Page 21

22 1. The Financial Controller provides the Trustees and National Assistant Secretary with the relevant documents for each outstanding invoice or bill. If the meeting is over the phone, the Financial Controller mails, or scans and s, the relevant documents to those not attending in person. 2. The Trustees and National Assistant Secretary consider each invoice. 3. If the Trustees and National Assistant Secretary are of the view that the invoices and wages have been appropriately incurred they sign them (or a cover sheet) indicating they authorise them. The Trustees and National Assistant Secretary also check that the online banking entry for the invoice is accurate. 4. If the Trustees or National Assistant Secretary have concerns about the invoices, the matter is discussed within the meeting until resolved. The Financial Controller must remove from the online banking system any payments that the Trustees or National Assistant Secretary have not authorised until they authorises the payments. 5. The National Assistant Secretary and one Trustee then approve for payment in the online banking system the invoices the meeting has authorised. If the National Assistant Secretary is absent, another Trustee can approve the online banking payment instead. The Trustees Meeting also oversee all payments made by the National Office. For full details of what happens at the Trustees Meeting, see the Terms of Reference for Trustees Meetings. All records of financial transactions are maintained by the Financial Controller Cheque authorisations Where cheques are required, for example to replenish petty cash, the National Assistant Secretary or Chief of Staff instructs the Financial Controller to draw up a cheque. The cheque must be signed by two of the three Trustees. Any payments out of the Training Fund require a cheque signed by the National Secretary and two Trustees. Matrix on Board Page 22

23 8. Procurement: purchasing goods and services Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: The National Office is committed to making the best use of members fees. This Policy provides guidelines on how goods and services can be purchased in the National Office. Authority for purchases Different levels of expenditure require different approval. These are set out below:» All purchases within the budget approved by NCOM, can be approved by the National Secretary,» All urgent or unforseen purchases outside budget, can be approved by the National Secretary, as long as those purchases are put before NCOM at the earliest opportunity» The National Secretary may delegate authority around purchases in writing to the National Assistant Secretary in accordance with the Rules» To ensure the day- to- day running of the office and campaigns, the National Secretary may delegate to Chief of Staff in writing the authority to approve all one- off purchases for no more than $5,000 (or where annual spend is under $5,000) with all such approvals being subject to the scrutiny of the Trustees Meeting. The Chief of Staff will confer and seek the approval of the National Assistant Secretary if in any doubt that a particular item falls into this authorised expenditure category. Where possible, appropriate approvals are sought before goods and services are purchased. It is acknowledged that pre- approval is difficult for purchases on credit cards, fuel cards and cab charge cards. See Section 9 for additional safeguards that have been put in place for these cards. It is noted that with the exception of petty cash purchases and direct debits, purchases are subject to scrutiny ahead of actual payment authorisation by Trustees. Purchasing principles The National Office adheres to a number of principles when determining which suppliers to choose. They are: 1. Value for money The National Office is entrusted with the money of our members, and strives to obtain value for money when purchasing goods and services. 2. Avoidance of conflicts of interest The National Office is committed to ensuring that purchasing is protected from conflicts of interest (see the section on Conflicts of interest and Purchasing ). Matrix on Board Page 23

24 3. Preference for Australian made goods and services The National Office is committed to Australian workers and considers whether goods are Australian made when making purchasing decisions. 4. Commitment to labour values As a Union, the National Office values commitment to similar values. We consider suppliers understanding of labour values in determining where we purchase. Conflicts of interest and purchasing The National Office is committed to avoiding conflicts of interest in purchasing. This helps ensure fairness in purchasing and protects membership fees from misuse. In relation to conflicts of interest, the Fair Work (Registered Organisations) Act 2009 requires:» All officers of TWU to disclose within the Union and then to members any material personal interests they or a close relative have that might impact on the affairs of the Union» Any payments to the people or organisations that an officer has a material personal interest in must be disclosed to the membership.» Any payments to related parties to the TWU need to also be disclosed to the membership. Related parties include officers, their spouses, their relatives and any entities controlled by TWU. The purpose of this section of the Financial Policies and Procedures is not to ensure compliance with these sections of the Fair Work (Registered Organisations) Act However, the information compiled as a result of these sections helps inform our purchasing practices. As a result of these sections a list containing all related parties and people and organisations with whom officers have a material personal interests can be compiled by the Financial Controller. The Chief of Staff, as someone with decision making power in relation to purchases, also adds to the list any material personal interests and related parties. The Financial Controller keeps this list (the Conflict of Interest List) and provides a copy to the Chief of Staff and National Assistant Secretary. The National Assistant Secretary advises the Financial Controller whenever a new interest is notified to TWU. The Financial Controller ensures that the Conflict of Interest List is updated, and updated copies are provided to the Chief of Staff and National Assistant Secretary. When purchases are made the person authorising the purchase will ensure that wherever possible the supplier is not on the Conflict of Interest List provided by the Financial Controller. Tenders All purchases, where the cost of the good or service is more than $100,000 annually, are subject to a tender process. The tender process is overseen by NCOM. Matrix on Board Page 24

25 The tender process is as follows: 1. The Chief of Staff, in conjunction with the National Assistant Secretary, prepares a Call for Tenders document 2. The Call for Tenders documents are provided to NCOM for comment and approval 3. Once the Call for Tenders document is approved, it is distributed widely to possible suppliers and TWU networks 4. Once tenders are received, the Chief of Staff and National Assistant Secretary consider each supplier against the purchasing principles. All suppliers on the Conflicts of Interest List are discarded unless there is good reason for including them. The Chief of Staff and National Assistant Secretary compile a list of potential suppliers and indicate how they compare to the purchasing principles. 5. The list is provided to NCOM for consideration and selection of the successful supplier. This decision is noted in the NCOM minutes. Where the supplier chosen is on the Conflicts of Interest List, any payment made is disclosed in line with the Fair Work (Registered Organisations) Act This process is repeated every three years for ongoing suppliers, where the annual spend is more than $100,000. The Trustees are advised of the progress of any tender processes in their Trustees Meetings. Preferred supplier list The Financial Controller prepares and maintains a Preferred Supplier List. The Preferred Supplier List is compiled using the following process: 1. The Financial Controller identifies and lists each operational area where the National Office make regular purchases with an annual spend under $100,000. All areas where the annual spend is over $100,000 are subject to a tender process. 2. For each relevant area, the Financial Controller considers at least three suppliers, where this is reasonable. 3. The Chief of Staff and National Assistant Secretary consider the three suppliers for each area and choose a preferred supplier. The decision regarding the preferred provider is made with the purchasing principles in mind. The Chief of Staff and National Assistant Secretary check whether the preferred supplier is included on the Conflict of Interest List. Any suppliers on the Conflict of Interest List should be avoided. Where this is not possible, for example where there are no other available suppliers or the alternate suppliers are not viable alternatives, this is noted. Payments to these people or organisations require disclosure in line with the Fair Work (Registered Organisations) Act The Financial Controller reconsiders the Preferred Supplier List whenever the Conflict of Interest List is updated. Matrix on Board Page 25

26 The Preferred Supplier List is reviewed at least every two years, using the process outlined above. The process is also followed when a new preferred supplier is needed. Process for purchases The process for purchases where there is a preferred supplier is as follows: 1. The relevant staff member fills in a Purchase Order Form. 2. The staff member seeks the approval of the Chief of Staff or National Assistant Secretary, depending on the amounts involved. See the Authority for Purchases section above. If the Chief of Staff or National Assistant Secretary approves the purchase they sign the Purchase Order Form. 3. Once approval is obtained in accordance with this procedure, the good or service may be purchased by the relevant staff member, or where appropriate, the Financial Controller, Receptionist or Assistant to the National Secretary. The Purchase Order Form is provided to the Financial Controller. Where there is no preferred supplier, the following process should be followed for purchases between $25,000 and $100,000: 1. The relevant staff member obtains two quotes for the work where time permits. 2. The relevant staff member advises the National Assistant Secretary or National Secretary of the services needed and the quotes obtained. 3. For matters that do not require NCOM approval (see Authority for Purchases above), the National Assistant Secretary or National Secretary decides on the supplier based on the purchasing principles. The National Assistant Secretary or National Secretary choose a supplier that is not on the Conflict of Interest List wherever possible. Where this is not possible, for example where there are no other available suppliers or the alternate suppliers are not viable alternatives, this is noted. Payments to these people or organisations require disclosure in line with the Fair Work (Registered Organisations) Act For matters that do require NCOM approval (see Authority for Purchases above), the National Assistant Secretary or National Secretary takes the quotes to an NCOM meeting. NCOM considers the suppliers against the purchasing principles. NCOM chooses a supplier that is not on the Conflict of Interest List. Where this is not possible, for example where there are no other available suppliers or the alternate suppliers are not viable alternatives, this is noted. Payments to these people or organisations are likely to require disclosure in line with the Fair Work (Registered Organisations) Act Once the supplier has been chosen the relevant staff member completes the Purchase Order Form and the National Assistant Secretary or National Secretary signs it. 6. Once approval is obtained in accordance with this procedure, the good or service may be purchased by the relevant staff member or where appropriate the Financial Controller, Receptionist or Assistant to the National Secretary. The purchase order is provided to the Financial Controller. Matrix on Board Page 26

27 Where there is no preferred supplier, the following process should be followed for purchases under $25,000: 1. The relevant staff member obtains a quotation for the work. 2. The staff member seeks the approval of the Chief of Staff or National Assistant Secretary, depending on the amounts involved. See the Authority for Purchases section above. If the Chief of Staff or National Assistant Secretary approves the purchase they sign the Purchase Order Form. 3. The Chief of Staff or National Assistant Secretary considers the supplier based on the purchasing principles. If the Chief of Staff or National Secretary have any concerns regarding the supplier and their quote in terms of value for money, commitment to labour values or whether the goods are Australian made they ask the relevant staff member to obtain further quotes or negotiate with the existing supplier. The Chief of Staff or National Assistant Secretary choose a supplier that is not on the Conflict of Interest List. If this is not possible, for example where there are no other available suppliers or the alternate suppliers are not viable alternatives, this is noted. Payments to these people or organisations are likely to require disclosure in line with the Fair Work (Registered Organisations) Act Once the supplier has been chosen the relevant staff member completes the Purchase Order Form and the Chief of Staff or National Assistant Secretary signs it. 5. Once approval is obtained in accordance with this procedure, the good or service may be purchased by the relevant staff member or where appropriate the Financial Controller, Receptionist or Assistant to the National Secretary. The purchase order is provided to the Financial Controller. Where the purchase is urgent, the process is sped up and truncated, with only one quote obtained. The Chief of Staff or National Assistant Secretary consider the purchasing principles as much as possible when approving urgent purchases. The value and frequency of urgent purchases are kept to a minimum. For purchases on credit cards, fuel cards and cab charge cards see Section 9. The process set out for credit card purchases is different to the process set out above, but where possible the above processes are followed, even if the goods or services are eventually purchased on credit card. Matrix on Board Page 27

28 9. Credit cards, fuel cards & cab charge cards/vouchers Event Date Event Date Creation of Policy: 22 Nov 2012 Review date 1: Endorsement by NCOM: Review date 2: Credit cards allow National Office to purchase goods and services where it is not practical to pay by cheque or bank transfer. They are also a potential source of fraud. These two considerations are balanced in this Policy, to protect the National Office as well as enable its work to be done. Credit cards Currently the National Secretary, National Assistant Secretary and Chief of Staff are issued with credit cards. The card limit of the National Secretary and National Assistant Secretary is $15,000 and the card limit for the Chief of Staff is $10,000. The issuing of new credit cards and the increase in credit card limits require the authorisation of any two from the following authorised signatories the National Secretary, National Assistant Secretary, and the three Trustees, with at least one of the authorisers being a Trustee. Credit cards are only used for work related expenditure. The only exception is for fuel purchased by the National Secretary and National Assistant Secretary, which can be purchased on credit cards and used for personal reasons in accordance with employment conditions. All credit cardholders sign a statement indicating that:» The card will only be used for work related purchases (except for the fuel exception noted above)» The card will not be used for cash withdrawals» The card will not be used by anyone other than the authorised holder of the card» That receipts will be obtained for all purchases. Where this is not possible the cardholder will make a note about the nature and amount of the purchase at the time that the purchase was made and this will be signed by the cardholder provided. The note will be provided to the Financial Controller.» Where it is found that the cardholder has misused their card for personal purposes, whether intentionally or accidentally, they agree to repay the National Office the money spent. Credit cards are only used where necessary and payment via invoice is preferred over the use of credit cards. Credit card statements are paid by direct debit, but they undergo the following scrutiny:» The cardholder must provide written receipts or signed statements for each line item in the credit card Matrix on Board Page 28

29 » The cardholder must notate those receipts with the relevant MYOB account and cost centre, for entry into the accounts» The Chief of Staff views the credit card statements and considers it in light of the usual expenditure. If the Chief of Staff is satisfied that the bill is accurate and justified they sign it for processing» The Trustees review the credit card statements at their quarterly meetings at the National Office. Fuel cards The issuing of new fuel cards require the authorisation of any two from the following authorised signatories the National Secretary, National Assistant Secretary, and the three Trustees, with at least one of the people being a Trustee. Fuel cards are attached to National Office vehicles. Fuel for the National Office vehicles allocated to the National Secretary and National Assistant Secretary is preferably purchased using credit cards, rather than fuel cards. However, for fuel purchases for National Office vehicles by National Office staff, fuel cards are used. Fuel cards are used in accordance with employment conditions. The employment conditions of some staff allow for reasonable personal use of National Office vehicles, including fuel. Where personal use of National Office vehicles or fuel cards is not included in employment conditions, fuel cards, like vehicles, are only used for work related purchases. All receipts for purchases on fuel cards are kept and provided to the Financial Controller. Fuel card statements are paid by direct debit, but undergo the following scrutiny:» For the fuel card of the general use National Office vehicle, the Financial Controller checks the statement against receipts» The Chief of Staff views the fuel card statements and considers them in light of the usual expenditure. If the Chief of Staff is satisfied that the bill is accurate and reasonable they sign it for processing. The relevant MYOB account and cost centre is noted on the statement, for entry into the accounts» The Trustees review the fuel card statements at their quarterly meetings at the National Office. Cab charge cards and vouchers Cab charge cards are provided to National Office official and staff who require them. The issuing of new cab charge cards require the authorisation of any two from the following authorised signatories the National Secretary, National Assistant Secretary, and the three Trustees, with at least one of the authorisers being a Trustee. Cab charge cards are only used for work related taxi travel. All cab charge holders sign a statement indicating that:» The card will only be used for work related taxi travel» The card will not be used by anyone other than the authorised holder of the card Matrix on Board Page 29