Finance Policy and Procedures

Finance Policy and Procedures

1. Accrual System

The YWCA maintains the accounting system on an accrual basis.

2. Checks and Balances

The YWCA maintains the following system of checks and balances to ensure security:

All checks issued require two signatures by either the president, vice presidents, treasurer or executive director. No checks are signed without accompanying documentation.

Two persons handle all checks and cash.

Receipts are issued in triplicate for each transaction: one copy to the payee, one to the accumulative spindle and one to accompany the cash/checks given to the bookkeeper.

All checks are endorsed to the YWCA upon receipt.

The register is emptied and contents forwarded to the bookkeeper at the end of each receptionist shift (three times per day).

The bookkeeping department keeps all cash and checks in a locked place between bank deposits.

A minimum amount of cash is kept on hand according to the needs of the program:

$40 is kept in the register for change

drop-ins for classes (tickets are issued and checked against cash at the end of the day).

An imprest petty cash account is kept with a maximum of $500 on hand. Issuance of funds is limited to the bookkeeper and controller, must be documented with receipts, and signed for by the payee. It is balanced monthly and monitored by the executive director.

Bank deposits are made in a timely fashion.

All receptionists and bookkeeping staff are bonded.

All records are kept confidential, under lock or in a bank safe deposit box, as appropriate, and are accessible only to authorized personnel (See Attachment A).

No funds are issued without proper documentation, i.e. check requests, receipts, etc.

3. Financial Reports and Audits

Operating Statement: Line item reports are prepared monthly and include the operating income and expenses (broken out into five columns: budget, current month, year-to-date, percent of yearly and year-to-date last year). The Investment/endowment statement is also distributed monthly.

Functional budgets are prepared at the beginning and end of the fiscal year and reviewed at that time. Functional income and expense is broken down by program category, management or fundraising. Indirect expenses are determined by space allocation (based on actual building space used) and time allocation (based on twice yearly time analysis studies.)

Expense standard is no more than 25% allocated to administration and fundraising and no more than 10% budget variance from proposed to actual budget.

All records are maintained for 7 years.

An audit by an outside Certified Public Accountant is prepared yearly. This includes a thorough examination of all records, a management letter and certification that the YWCA meets the appropriate accounting standards. A more extensive audit is prepared for submission to the Office of Criminal Justice Planning as specified in their grant requirements.

4.Oversight

The Finance Committee is composed of five to eight Board and non-board members who are knowledgeable in financial matters. The committee meets monthly to review financial statements, reports on special purchases, investments, fund development progress reports, capital expenses and future needs. The treasurer, the controller and the executive director sit on the committee, ex-officio without vote.

The treasurer presents a report on the income and expenses, year-to-date, to the Board of Directors monthly.

The Advisory Committee is composed of five to nine community members with expertise in business, law, finance, and investments who receive reports at meetings two times per year and may be individually consulted on special projects or needs.

The Board of Directors reviews the budgets in detail in January (proposed) and June (revised). Materials are mailed in advance with a detailed explanation attached and discussed at length in the meetings. Formal action follows.

The Finance Committee reviews the audit yearly.

The Finance Committee yearly tours the bookkeeping processes from the front counter receipting and money handling, through the ledger entries, banking and storage systems. This enables them to become knowledgeable of the systems they are accountable for and provides an opportunity to constantly clarify and improve the systems.

The executive director authorizes all department expenditures over $100, usually signs all checks and inspects documentation on a continuous basis.

5. The Investment Portfolio

The investment portfolio consists of accumulated funds set aside for special purposes and includes the following:

Endowment funds are either donor-designated or Board designated. The principal is maintained and the income generated may be spent according to the donor’s Board's wishes. Dividends may be spent. Capital gains may be spent or reinvested according to the advice of the Finance Committee.

Special Funds established by the Board in accordance with donor’s guidelines.

Examples:

- The Helen Flack Fund for Leadership Development

- The Williams Multicultural Fund

- The Ruth Cody Fund

- The Ernestine Putnam Fund

The Clara Dooner Phillips Fund

The Theresa Wilbur Paist Fund

- The Kay Philips Fund to Further Diversity

The Finance Committee with approval of the Board may designate bequests received by the YWCA.

Stocks or bonds received as bequests are generally sold at the fair market price at the time of receipt and the moneys invested in mutual funds or short term vehicles. Stocks or bonds received as contributions are sold and proceeds put into the operating checking account.

Investment performance is reviewed by the Finance Committee monthly and twice yearly in depth with outside experts brought in.

Special attention is given to diversification among stable mutual fund families, and between stocks and bonds investments.

Dividend income from the investment portfolio is used in the yearly operating account.

A detailed policy and procedures statement on the investments is attached.

6. A checking account is maintained for the operating account backed by one interest bearing savings account.

7.Payroll

A separate payroll journal is maintained for the payroll accounting.

Paychecks are issued on the 1st and 16th of the month.

All paychecks are documented by time sheets. The employee's supervisor must approve all time sheets.

Cumulative records are kept on each employee's vacation, holiday and sick leave time earned and taken. Vacation time is monitored and accumulation past a two-year's equivalent is limited.

Standard deductions are made. Payments to the appropriate state and federal agencies are made semi-monthly, quarterly and at year-end.

Participation in the YWCA Retirement Fund is mandatory for all employees working over 1000 hours per year after two years of employment with the YWCA. This is 503.A non-contributory retirement plan. The employer pays 10% plus 1% for administration. Funds are forwarded monthly to the national retirement fund office.

Optional deductions include payments for family membership health coverage, contributions to the YWCA or United Way, and additional retirement payments. Funds collected are maintained as a liability and amounts forwarded by check to the appropriate body according to the stated schedule (monthly, quarterly or as billed)

8. Capital expenditure and depreciation

Capital expenditures are considered those of a permanent nature and exceeding $1,000. Authorization is required by the Finance Committee for non-budgeted amounts over $500. Depreciation is computed using the straight-line method over estimated useful lives ranging from 5-10 years for furnishings and equipment and 40 years for the building.

9. Timelines

- W-2’s to employees by January 31.

- 1099s to independent contractors by January 31.

- Consolidated payroll information to state or federal agencies by February 28.

- Retirement payments monthly as billed

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