ABORIGINAL SPORT CIRCLE OPERATIONAL POLICES. Name: Financial Management Date Approved: April 22, 2015

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1 ABORIGINAL SPORT CIRCLE OPERATIONAL POLICES Type: Governance Authority: Board of Directors Name: Financial Management Date Approved: April 22, 2015 General & Legacy Fund Date Revised: INTRODUCTION The Financial Policy is applicable to both the General and Legacy Funds and is based on each fund being budgeted, accounted for and monitored as separate entities. DESCRIPTION The document comprises a series of actions and policies covering the following areas of financial management: Segregation of Funds Integration of financial operations and reporting Budgeting Monitoring and Measurement Ancillary Documentation & Policies Approval/Authorization Matrix Annual Check List 1

2 FUNDS The audited financial statements of the Aboriginal Sport Circle will report the status of three funds General Fund, Legacy Fund, and Invested in Capital. General Fund core operations of the ASC Legacy Fund support to athletes, other expenses, income for investments, status of investments etc. Invested in Capital purchase of capital assets funded by the General Fund CORE OBJECTIVES The financial management policy ensures that: All revenue is collected and reported in a timely manner Only authorized expenses are incurred and procured in the most cost efficient and effective manner possible All expenses and commitments are recorded in a timely manner Expenses are only incurred when sufficient funds are on hand to cover the expenditures Actions The following actions will be undertaken in order to support the core objectives. 1. All revenue received shall be deposited into the appropriate bank account and recorded in the monthly financial statements in a timely manner. 2. The purchasing policy shall be followed at all times. 3. All expenses and commitments will be part of an audit trail and shall be recorded in the financial statements and other associated schedules in a timely manner. 4. Prior to making expense commitments steps must be taken to ensure that sufficient funds will be on hand to cover such commitments from an overall ASC perspective and that sufficient monies are available in the appropriate budget category. 2

3 INTEGRATED FINANCIAL MANAGEMENT OBJECTIVE The objective is to ensure that the financial operations of the Aboriginal Sport Circle are transparent and to therefore allow those responsible for monitoring and managing the organization to review and comment on the monthly reports. The monthly reports will show the financial and operational progress as it relates to the approved undertakings of the organization. Actions The following actions will be undertaken in order to support the objective. The integration of the Sport Canada submission into the financial reporting chart of accounts i.e. Expenses attributable to the Sport Canada submission(s) can be easily identified within the financial reporting template and costed by program. See Sport Canada Contribution Guidelines, Sport Support Program, Multisport Service Organization Component link available in Budgeting section. The financial statements must reflect all transactions in a timely manner Monthly financial comparatives from the previous year s financial statements are included Written report and explanation of variances to budget and prior year/significance of variances will be provided Financial projections to year end will be prepared and provided to the Board of Directors The financial statements will be integrated with the approved annual budget BUDGETING OBJECTIVE The objective is to achieve through an integrated process an accurate and conservative estimate of the revenue required to fund the activities of the Aboriginal Sport Circle that support the program objectives for the year. Actions The following actions will be undertaken in order to support the objective. The Sport Canada Contribution Guidelines, Sport Support Program, Multisport Service Organization Component will be reviewed annually 3

4 The approved budget shall support the annual program goals of the ASC The approved budget shall be broken down by month The Aboriginal Sport Circle will move to a rolling three year budget Budget Life-cycle The budgeting process is key to an organization s sound financial management and comprises two parts Budget setting, in which budgets are normally established prior to the beginning of each fiscal year, Budget management, in which budgets need to be monitored and controlled. If either is not properly executed, the financial management of the organization will be at risk. The budget life-cycle is applicable to both the General and Legacy Funds even though it is anticipated that the operations of the Legacy Fund will be extremely limited. The Aboriginal Sport Circle operates on a three year rolling budget cycle with reviews and updates built into each phase for each year. Month Action Responsibility September Update budget projections to year end and assess status of objectives re Sport Canada submission Executive Director reporting to Board of Directors Agree on objectives for future years Board of Directors to Executive Director November Draft/update budgets based proposed objectives Executive Director reporting to Board of Directors December Review budgets and provide instruction to finalize or rework Board of Directors to Executive Director January Approval Board of Directors February Submit Sport Canada program applications Executive Director with copy of board motion 4

5 Monitoring & Measurement The monitoring and measurement addresses; What is prepared When it is prepared Who it is prepared for Who approves what has been approved WHAT WHEN WHO APPROVAL Financial Statements Monthly Prepared by Accountant for Executive Director within 10 business days of month end Copy of financial statement and related approval Variance analysis Quarterly Prepared by Accountant for and in collaboration w/executive Director within 15 business days of the appropriate month end Copy of variance analysis Projections/ Quarterly Prepared by Executive Director in collaboration with Copy of forecast to year Accountant within 15 business days of the appropriate projections/forecast end month end Annual budget Annually Prepared by Executive Director and senior staff; Copy of approved budget and risk Accountant involvement see budget cycle /Sport Canada submission assessment (includes Sport Canada submission) Cheque Monthly Prepared by Accountant for Executive Director within Cheque listing included in listing/funds 15 business days of the month end minutes of board/executive transfer meeting Receivables Quarterly Prepared by Accountant for Executive Director within Receivables report report 15 business days of the appropriate month end Commitment Monthly Prepared by Accountant for Executive Director to sign Commitment summary availability and present summary *see below ANCILLARY DOCUMENTATION & POLICIES 5

6 The following documentation will be prepared along with the monthly financial statements and be available for presentation/internal audit purposes. Commitment availability policy* Monthly cheque listing Bank reconciliation Commitment Availability The Board of Directors will be governed in the approval of commitments by the availability of unencumbered cash. There must be at least enough unencumbered cash in the accounts of the appropriate fund to cover 100% of any commitment, prior to a commitment being authorized by the Board. Definition of Unencumbered Cash Unencumbered cash shall mean: The current balance of all deposits of the in the appropriate ASC fund and *equivalents less All open commitments (that is, the unexpended portions of any commitments) less Any contract close-out or cancellation charges or fees that are in existence less Salaries and Costs for three months to allow for ongoing operations *Equivalence to Bank Deposits For the purposes of this Commitment Availability Policy and to determine the equivalent of bank deposits, the Board of Directors shall be allowed to consider a letter from a funding agency indicating the availability of specific amounts of funds to the Aboriginal Sport Circle at specific times. However, such equivalencies can only be included if the Board of Directors have taken steps to confirm that all deliverables guaranteed in respect to the funding are complete or are in progress and on schedule. 6

7 Monthly cheque listing/funds transfer A monthly listing of all cheques issued by the Aboriginal Sport Circle and all transfers made by the Aboriginal Sport Circle shall be prepared on a monthly basis and by made available for review by the Board of Directors. Bank reconciliation Reconciliations for all bank accounts held by the Aboriginal Sport Circle shall be prepared on a monthly basis and by made available for review by the Board of Directors or designate. Receivables Report A report detailing individual balances owing to the Aboriginal Sport Circle and identified on any balance sheets as such shall be prepared and made available for review by the Board of Directors or designate. Other Policies The following policies are also to be followed. Cheque/Fund Transfer Policy and Cheque Security The Aboriginal Sport Circle will not use any system that requires pre-signed cheques or pre-authorized transfers. A board signing officer will always be the final signature or authorization on any All blank cheques shall be kept in a secure location with a level of security appropriate to the overall level of risk. Any fund transfers shall be performed using secure passwords and under no circumstances shall signing officers divulge such passwords to other signing officers or any other person. 7

8 Source Information Source information is defined as information required supporting the deposit of funds or the expenditure of funds. Such source information shall be maintained in a secure location on ASC premises with a level of security appropriate to the overall level of risk. Source information shall not be maintained in any other location and shall not be moved off premise without the written permission of the Chair or by secure courier. Credit Cards The Aboriginal Sport Circle shall not maintain credit cards. Asset tracking system The Executive Director shall ensure that all assets owned by the Aboriginal Sport Circle are used for the primary benefit of the Aboriginal Sport Circle. The Executive Director shall ensure that all general assets are tracked and accounted for. Any assets purchased and assigned to individual directors, officers or staff shall be catalogued and signed in and out by the recipient. Any director, officer or staff member in possession of such assets shall agree to return such assets upon the request of the Executive Director. Any personnel use of such assets by a director, officer or staff member that results in the ASC incurring additional costs shall be liable to reimburse the ASC for such costs. 8

9 Approval/Authorization Matrix In order to control the commitment and spending of funds it is critical for everyone within the organization to understand how certain instruments (purchase orders, contracts, cheques etc) are authorized and by whom. Of primary importance is the understanding and acceptance that approval cannot come from the direction of a board member no matter their standing but can only come through the mechanisms set up and approved by the Board of Directors. Therefore, for the approval policy to be overruled the board must sanction such a decision through board motion, or assign an officer(s) or staff to make such a decision by passing a board motion. The levels are normally assigned to the likes of the senior staff, Executive Director, Finance Chair, Board President / Vice President etc. INSTRUMENT VALUE RANGE AUTHORIZATION General banking authority Board of Directors by board motion (opening/closing/transfer of accounts) Cheque Signing/Fund Transfer (General Fund) Two of Executive Director or Chair or Vice Chair or Treasurer with Chair or Vice Chair or Treasurer the second and final signatory Cheque Signing/Fund Legacy Chair + one of Chair or Vice Chair or Treasurer Transfer (Legacy Fund) Contracts/Purchase Orders $500 to $1,000 Executive Director or staff delegated by Executive Director Contracts/Purchase Orders $1,001 to $5,000 Executive Director or Chair or Vice Chair or Treasurer with e mail authorization acceptable Contracts/Purchase Orders $5,001 and greater Two of Executive Director or Chair or Vice Chair or Treasurer with e mail authorization acceptable Chair Expenses Vice Chair or Treasurer Vice Chair, Treasurer, Board members expenses Executive Director has right of approval for all regular meeting expense claims. For others Chair must approve. Executive Director Chair or Vice Chair or Treasurer Staff Executive Director 9

10 Annual Check List Deliverable April May June July Aug Sept Oct Nov Dec Jan Feb March Financial Statements Variance Analysis Projections to year end Audited Financial Statements Budget Start Draft budget Budget review Budget approved (includes Sport Canada submission) Budget submission to Sport Canada Cheque listing/fund transfer Receivable Report Commitmen t availability Bank reconciliatio ns 10