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KOI Financial Policies and Procedures: Difference between revisions

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Adopted by Board of Directors of KOI on: TBD
Adopted by Board of Directors of KOI on: TBD


Review cadence: Semi-annually
Review cadence: Semi-
 
== Purpose, scope, and definitions ==
== Purpose, scope, and definitions ==
=== Purpose ===
=== Purpose ===
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* To ensure the fiscal health and safety of the organization
* To ensure the fiscal health and safety of the organization
* For compliance with grants
* For compliance with grants
* For compliance with gudits
* For compliance with audits
* For reference by KOI volunteers
* For reference by KOI


=== Recognition of Capitalism and Harm ===
=== Recognition of Capitalism and Harm ===
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Headings should be used to create a table of contents and easy navigation of the reader. Any images should have alt text with them. Headings should be nested appropriately for the ease of navigation of the user.
Headings should be used to create a table of contents and easy navigation of the reader. Any images should have alt text with them. Headings should be nested appropriately for the ease of navigation of the user.


Each section should ideally come with a dedicated section for the policy of the financial operation and with the procedure of the financial operation. A Policy is a malleable set of guidelines to ensure any procedure properly follows sound and compliant decisions by KOI. A procedure is the steps to enact the policy.
Each section should ideally come with a dedicated section for the policy of the financial operation and with the procedure of the financial operation. A Policy is a malleable set of guidelines to ensure any procedure properly follows sound and compliant decisions by KOI. A procedure is the steps to enact the policy. Policy should be drafted before procedures, and should (ideally) change very little. Procedures are expected to change often due to systems changing, and the evolving nature of the non-profit space.
== Definitions ==
== Definitions ==
=== Actors ===
=== Actors ===
'''Volunteer''' - An individual who has been onboarded into KOI, including alias and chat platform access, and who donates labor toward the furtherance of KOI’s goals and programs
'''Active KOI Volunteer''' - An individual volunteer who has contributed no fewer than 10 hours the previous calendar month
'''Director''' - A director is a volunteer who, for purposes of governmental and inter-organizational interfacing, holds a titled position within the organization but does not have authority for governance - which remains restricted only to the board of directors (e.g. chair, secretary, treasurer).
'''Governing Board Director''' -  A volunteer who has a titled  governance position within the organization as laid out in the organization’s bylaws and is registered as such by government entities (secretary of state, Internal Revenue Service, etc.)
'''Board Treasurer''' -  The volunteer board member who is listed as the treasurer to the Internal Revenue Service and the secretary of state of Washington State.
'''Finance Comrade''' - A finance comrade is a KOI volunteer who has explicit, and approved, access to our accounting system and/or our bank portal. They are also tasked to record financial transactions and to compose budgets.
'''Evacuee''' - A member of the trans community that is being advocated for by KOI to acquire freedom of movement, self-determination and autonomy to create a new life in Washington State.
'''Authorizer''' - A volunteer who holds the power to initiate a transaction of funds from, and to, KOI.


* '''Volunteer''' - An individual who has been onboarded into KOI, including alias and chat platform access, and who donates labor toward the furtherance of KOI’s goals and programs
'''Signatory''' - A signatory is a KOI volunteer who has authorization powers, and can sign checks for the bank account.
* '''Active KOI Volunteer''' - An individual volunteer who has contributed no fewer than 10 hours the previous calendar month
* '''Director''' - A director is a volunteer who, for purposes of governmental and inter-organizational interfacing, holds a titled position within the organization but does not have authority for governance - which remains restricted only to the board of directors (e.g. chair, secretary, treasurer).
* '''Governing Board Director''' -  A volunteer who has a titled  governance position within the organization as laid out in the organization’s bylaws and is registered as such by government entities (secretary of state, Internal Revenue Service, etc.)
* '''Board Treasurer''' -  The volunteer board member who is listed as the treasurer to the Internal Revenue Service and the secretary of state of Washington State.
* '''Finance Comrade''' - A finance comrade is a KOI volunteer who has explicit, and approved, access to our accounting system and/or our bank portal. They are also tasked to record financial transactions and to compose budgets.
* '''Evacuee''' - A member of the trans community that is being advocated for by KOI to acquire freedom of movement, self-determination and autonomy to create a new life in Washington State.
* '''Authorizer''' - A volunteer who holds the power to initiate a transaction of funds from, and to, KOI.
* '''Signatory'''<!-- Definition needed -->


=== Accounting/Finance Definitions ===
=== Accounting/Finance Definitions ===
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'''Accounts Payable''' - A GL account that holds all of the expenses owed by the organization, yet not paid. Accounts payable is also a collection of processes to track expenses and disburse funds for expenses.
'''Accounts Payable''' - A GL account that holds all of the expenses owed by the organization, yet not paid. Accounts payable is also a collection of processes to track expenses and disburse funds for expenses.


'''Going Concern''' - A going concern means the organization can meet all of its liabilities, and is no danger of losing liquidity. Despite its description, it is a good thing.
'''Going Concern''' - A going concern means the organization can meet all of its liabilities, and is no danger of losing liquidity. Despite its name, it is a good thing to have a going concern.


'''Liabilities''' - Liabilities are legal obligations for future disbursements, or services. The most common of these are loans, accounts payable, and unearned revenue.
'''Liabilities''' - Liabilities are legal obligations for future disbursements, or services. The most common of these are loans, accounts payable, and unearned revenue.


'''Assets'''<!-- Definitions needed -->
'''Assets -''' Assets are a tangible, or intangible, thing owned by the organization that posseesses financial value, or can produce financial value. Cash, buildings, patents, and goodwill are examples of such.
 
'''Equity -''' Equity is the remaining interest owned by the owners, and the organization of an entity after liabilities. As a non-profit, the equity is referred to as "Net Assets" and there are no capital owners.


'''Equity'''
'''Fund -''' A fund is an appropriated portion of Net Assets for specific purpose or program.


'''Fund'''
'''Restricted Fund -''' A Restricted Fund is a Fund that is set aside for a specific purpose and/or program, and cannot be re-appropriated to another fund or released without oversight.


'''Restricted Fund'''
'''GL Account -''' A GL (General Ledger) Account is a classification of a transaction category that is tracked by those responsible of the financials.


'''GL Account'''
'''Misappropriation -''' Misappropriation is the disbursement, and spending, of funds in a method that wasn't the original intention of the disbursement.


'''Misappropriation'''
'''Fraud -''' Fraud is the misappropration of funds/disbursements that intentionally violate the internal controls of the organization with the intention of misrepresentation and non-disclosure.


'''Fraud'''
=== Other Definitions ===
=== Other Definitions ===
'''In Good Standing''' - The default state for active KOI volunteers who have not been censured, disavowed, or asked to leave the organization and are otherwise meeting all requirements outlined in the organization’s bylaws and rules.
'''In Good Standing''' - The default state for active KOI volunteers who have not been censured, disavowed, or asked to leave the organization and are otherwise meeting all requirements outlined in the organization’s bylaws and rules.
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Internal controls prevent fraud and ensure proper spending of the funds of KOI.  
Internal controls prevent fraud and ensure proper spending of the funds of KOI.  


=== Separation of Powers ===
=== Separation of Duties ===
Separation of powers (sometimes called segregation of powers) is an internal control that prevents misuse of funds by ensuring every transaction has at least two eyes on it. Ideally, each transaction would have at least three KOI volunteers involved with it.
Separation of Duites (sometimes called segregation of duties) is an internal control that prevents misuse of funds by ensuring every transaction has at least two eyes on it. Ideally, each transaction would have at least three KOI volunteers involved with it.


KOI recognizes the following three powers in a transaction process:
KOI recognizes the following three duties in a transaction process:


* '''Authorization''' – Authorization is the power to approve a transaction. These can include expense approvals, check signatory powers, contract signatory powers, payroll initiation, etc.
* '''Authorization''' – Authorization is the power to approve a transaction. These can include expense approvals, check signatory powers, contract signatory powers, payroll initiation, etc.
* '''Custody –'''  Custody is the physical holding of the funds of KOI. This can include physical checks, P2P transaction app access, credit cards, and cash
* '''Custody –'''  Custody is the physical holding of the funds of KOI. This can include physical checks, P2P transaction app access, credit cards, and cash
* '''Record Keeping''' - Record keeping is the logging, and documentation of transactions. Examples include paper files, journal entries, employee records, billing, and payables, financial statement preparation, etc.
* '''Record Keeping''' - Record keeping is the logging, and documentation of transactions. Examples include paper files, journal entries, employee records, billing, and payables, financial statement preparation, etc.
* '''Materiality'''
The most dangerous duty to have combined with another is authorization.
** Materiality for evacuee expenses
 
** Materiality for non-evacuee expenses
Finance Comrades forbidden from holding authorization duties. Bank Signatories are forbidden from holding record-keeping duties.
 
=== Materiality ===
 
==== Materiality for evacuee expenses ====
Materiality will determine the amount of scrutiny an evacuee expense incurs. A set amount will be determined and referable by the Finance Committee. There can be multiple scales of materiality for an evacuee expense.
 
The lowest on the materiality threshhold will involve the following:
 
* The least amount of authorizers needed.
* The least amount of documnetation
* The least amount of natural consequences in cases of misappropriation.
 
The highest amount of materiality will involve the following:
 
* Clearest enforcement of Internal Controls
* Concise recording of authorization, and authorizors.
* Contracts if needed.
* The clearest understanding of natural consequences when it comes to misappropriation and fraud.
 
If there is a prohibited transaction for an evacuee, there will be no materiality threshold and scrutiny will be in place.
 
==== Materiality for non-evacuee expenses ====
Materiality will determine the amount of scrutiny an non-expense incurs. A set amount will be determined and referable by the Finance Committee. There can be multiple scales of materiality for an evacuee expense.
 
The lowest on the materiality threshhold will involve the following:
 
* The least amount of authorizers needed.
* The least amount of documnetation
* The detail in a Journal Entry Workpaper
* The least amount of natural consequences in cases of misappropriation.
 
The highest amount of materiality will involve the following:
 
* Clearest enforcement of Internal Controls
* Concise recording of authorization, and authorizors.
* Contracts if needed.
* Highest detail required for a Journal Entry workpaper.
* The clearest understanding of natural consequences when it comes to misappropriation and fraud.
 
=== General Ledger Account Control ===
 
A General Ledger Account (GL Account) is a category for an expense, revenue item, or a balance sheet item (such as a liability, asset, or equity). Every financial transaction with KOI (Cash or not) must be tracked in an account.
 
A GL Account should have:
 
* A balance
* A descriptive name
* A description for external, and internal, use.
* A Unique GL Numerical Code
* A GL Account Category (Expense, Revenue, Assets, etc.)
 
GL Accounts can only be approved before they are added to the Accounting System by a KOI volunteer with Authorization powers. The only exception is new/retired GL Accounts can be approved during the budgeting process with the entire organization. Only members of the Finance Committee can add GL Accounts into the Accounting System.
 
==== GL Account Numbering ====
GL Account Codes are numbered numerically in a consistent manner according to the category. For example, all payroll liabilities always begins with the number 21. If there are to be more sub accounts than four numbers would allow, then the number of digits in a GL Account Code can be extended. For example, Evacuee Support: Medical Support: Emergencies code is 650502, which is 6 digits long.
 
 
The current system is as follows:
{| class="wikitable"
|+
!Account
!Sub Account
!Sub Account (Level 2)
!Numerical Prefix
|-
|Asset
|
|
|1
|-
|Asset
|Bank Accounts
|
|10
|-
|Liabilities
|
|
|2
|-
|Liabilities
|Payroll Liabilities
|
|21
|-
|Net Assets (Equity)
|
|
|3
|-
|Revenue
|
|
|4
|-
|Revenue
|Fundraising
|
|43
|-
|Expenses
|
|
|6
|-
|Expenses
|Evacuee Support
|
|65
|-
|Expenses
|Evacuee Support
|Transport
|6501
|-
|Expenses
|Evacuee Support
|Medical Support
|6505
|-
|Expenses
|Payroll Taxes
|
|6720
|}


== Misappropriation and Fraud Control ==
== Misappropriation and Fraud Control ==
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* Using appropriated funds for an evacuee for another documented expense purpose than initially reported
* Using appropriated funds for an evacuee for another documented expense purpose than initially reported
* Using appropriated funds for one evacuee than initially stated
* Using more appropriated funds for one evacuee than initially stated
* Unauthorized transactions for sundries for KOI
* Unauthorized transactions for sundries for KOI
* Using funds from a restricted fund for expenses not allowed by said restricted fund.
Accountability involves all sides knowing where errors and harm has been done. Acknowledgement of the misappropriation will be communicated by the Finance Committee to the KOI Volunteer. If the misappropriate was initiated by and Evacuee, the Finance Committee will notify the Evacuee's Care Coordinator.
There will be no set consequence or reprisal for misappropriation. However, there will be natural consequences in order to protect the internal controls of KOI, and the sustainability of the organization.
These consequences can involved one, or more, of the following:
* Written acknowledgement of the misappropriation.
* Written next steps by the individual who misappropriated on how to prevent future misappropriation.
* Additional authorizers for transactions for future transactions from the person who misappropriated funds.
* Additional authorization steps for all transactions involving the person who misappropriated funds.
* Additional documentation requirements for transactions involving the person who misappropriated funds.
* Removal from the transaction process entirely for the person who misappropriated funds.
* Redelegation of tasks for a volunteer who misappropriated funds.
The priority for deciding which consequence to enact upon the person who misappropriated funds should always be based upon the internal controls, and sustainability, of KOI. Never should shame/guilt be used when deciding next steps after misappropriation of funds.


=== Restorative Steps for Suspected, and/or confirmed Fraud ===
=== Restorative Steps for Suspected, and/or confirmed Fraud ===
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* Obscuring transactions, or hiding them.
* Obscuring transactions, or hiding them.
* Intentional misstatement of financial statements
* Intentional misstatement of financial statements
* Using KOI's funds for purchase of illegal goods.
* Using funds from a restricted fund for another purpose.
* Using restricted funds for inappropriate purposes, and not disclosing it.


All actors, from evacuees to directors, are capable of creating harm via fraud. No actor external, or internal, should have any heightened suspicion unless the roles they hold within the organization might cause such a suspicion.
All actors, from evacuees to directors, are capable of creating harm via fraud. No actor external, or internal, should have any heightened suspicion unless the roles they hold within the organization might cause such a suspicion.
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The main aim is not punishment, shame, or guilt. It should be to protect KOI, those harmed, and the harmer as well.
The main aim is not punishment, shame, or guilt. It should be to protect KOI, those harmed, and the harmer as well.
== Systems, Application and Information Security ==
== Systems, Application and Information Security ==
=== Accounting System - Xero ===
The accounting system used by KOI must contain the following functionalities:
* User and Audit Logs of Logins, and transaction modifications.
* Transaction Recording
* Financial Statement Reporting
*Journal Entry Logging
*Bank Reconciliation
*User Management
The Accounting system should only be completely accessible by KOI Volunteers who have record keeping privileges (Finance Comrades and the Board Treasurer). No one with signatory powers should be able to reconcile bank statements and record transactions in the accounting software. Read only accounts are highly suggested for those on the board and those with signatory powers.
Xero is the Accounting System used by KOI.
=== Fundraising Systems ===
Fundraising systems should be utilized to log the donor transactions for KOI. They should:
* Log the donor who donated
* Log the donation date
* Log the fund donated to.
Ideally, such systems should also accept donations easily and electronically.
Donation systems might contain donor information such as bank information and credit card numbers. It is important to protect this data and ensure only folks with need to know privileges have access to said systems.
Donations need to curated when received to ensure no fund restrictions are in place.
==== Zeffy ====
Zeffy is the primary donation platform for KOI. Individuals who wish to donate directly to KOI are referred to our Zeffy link.
Zeffy donations include the following, and more:
* The donor name
* The restriction of the donation (if any)
*The donation method
*The cadence of the donation
*The date of the donation
*The donation referral
*The date deposited in KOI's bank account
Exports of donations can be done via the zeffy web portal. Such exports should be kept with KOI as backup documentation of the purpose of the donation,and the donor.
Finance Comrades, the Board Treasurer, and anyone with development tasks are allowed to use the Zeffy system and see exports. However, due to the confidential nature of the donations, only those with a completed background check can access zeffy. This requirement will always supersede general KOI policies.
==== Benevity ====
Benevity is KOI's main workplace donation platform. Employees can ask their employer to have paycheck deductions
Benevity donations can include the following, and more:
*The donor name
* The restriction of the donation (if any)
*The date of the donation
*The donation referral
*The date deposited in KOI's bank account
In addition, Benevity can also collect corporate matches for their employee's donations.
The matching donations can include:
*The matching organization
* The restriction of the donation (if any)
*The date of the donation
*The employee the donation is matching
*The date deposited in KOI's bank account
It is important to record such information for record keeping purposes.
Finance Comrades, the Board Treasurer, and anyone with development tasks are allowed to use the Benevity system and see exports. However, due to the confidential nature of the donations, only those with a completed background check can access zeffy. This requirement will always supersede general KOI policies.
To access Benevity, the account must have a Mutli-Factor Authentication feature turned on. Currently, that MFA feature is SMS only.
=== Office Applications - Google Drive ===
Google Drive, sometimes called Google Docs, is a cloud based application that features the following office applications:
* Rich Text Editing (Sometimes called Word)
* Multi-cell spreadsheet (Called Sheets)
* Presentation Slides (Called Slides)
In addition, the google drive can host pdfs and other documents in a cloud based environment. Documents can be shared with anybody who wants access, and they can be shared with only a few KOI members.
The Finance Committee will use Google Drive for primary document retention, budgeting, and other finance tasks that are required.
Due to the current political climate, and the possible capitulation of Google with a hostile government, it is recommended only primary documents that do not contain volunteer/evacuee names be stored on Google Drive.
=== Office Applications - Cryptpad ===
Cryptpad is a cloud based application environment that features the following office applications:
* Rich Text Editing (Sometimes called Word)
* Multi-cell spreadsheet (Called Sheets)
In addition, cryptpad can host pdfs and other documents in a cloud based environment. Documents can be shared with anybody who wants access, and they can be shared with only a few KOI members.
The Finance Committee will use Google Drive for retention of documents that contain sensitive information such as Bank Statements, Evacuee names, payroll records, etc.
=== Communication - Element/Matrix ===
The Finance Committee communicates needs, issues, task delegations, meeting times, etc. via the KOI Matrix Server with the Client Element. There is a Finance Committee channel where all of the Finance Comrades and the Board Treasurer communicate. The channel is also open to any other KOI volunteer, and it is encouraged other KOI volunteers join to provide oversight on the KOI Finance Committee.
Expenses are brought to the entire KOI volunteer organization for review. Emoji reacts do not count as approval or veto'ing of an expense. Approval via Matrix does not count as approval of expenses for legal reasons.
== Cash Management ==
== Cash Management ==
=== Cash Management Policy ===
==== Managing Cash Flow ====
The cash in and out is an important factor for the sustainability of the organization. In order for KOI to continue on as an organization, the organization needs to be able to meet the following obligations (by priority):
# Budgeted Monthly Evacuee Expenses
# Budgeted Monthly Payroll Expenses (if it exists)
# Budgeted Monthly Rent Expenses (if renting a building)
If there is ever a low cash balance for the organization, the Finance Committee must create a cash report listing:
* End of Month Bank Account Balances
* End of Month Credit Card Balances
* End of Month Line of Credit Balances
* Budgeted Evacuee Expenses for the Month
* Budgeted Payroll Expenses for the Month (If Any)
* Budgeted Payables for the month.
* Budgeted Receivables (if any) for the month
Ideally, this should be a spreadsheet allowing the Finance Committee to easily determine and report the next steps the organization can take.
If expenses, and operations, are large enough, then the Finance Committee must issue this report monthly regardless to provide transparent status of the finances to the organization.
==== Bank Account Balances ====
Bank Account Balances should have set minimum balances. At the beginning of the month, the main checking account should be replenished to the the budgeted amount of expenses for evacuees for the month. The Bank account should never be below a set amount to ensure there are funds to be spent on the evacuees. The bank account shouldn't be above the replenish balance to ensure only a certain amount of funds would be vulnerable to a rogue actor who would wish to empty the bank account.
Any funds not currently in the checking account should be in the savings account.
Only those with authorization powers can transfer funds between bank accounts. Those with record keeping powers must have access to bank information in some channel, including a read-only method of the bank accounts.
==== Petty Cash Handling ====
The organization will not work with cash as much as possible. Cash will not be disbursed to evacuees. Cash will not be a mode of payment with vendors. Cash donations will be immediately deposited and not held by the organization outside of a depository institute.
If there ever is a petty cash fund within the organization outside of a depository institute, there a few requirements.
* Cash has to be counted on a periodic basis.
* The Petty Cash account will have to go through reconciliation on a set periodic basis.
* Separation of controls will be held (Authorizor, vs. Record Keeper vs. Custodian) with no exceptions.
* Withdraws from the Petty Cash account will need two signatories.
== Organization Budgeting ==
== Organization Budgeting ==
To have a functioning Non-profit, a composed budget is required every year for KOI. A budget must be composed also for Grant applications, and to strengthen the internal controls of the organization.
To have a functioning Non-profit, a composed budget is required every year for KOI. A budget must be composed also for Grant applications, and to strengthen the internal controls of the organization.
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If the budget is not approved by the organization, then there is no operational budget. The budget has to be recomposed, and re-submitted.
If the budget is not approved by the organization, then there is no operational budget. The budget has to be recomposed, and re-submitted.


The draft budget should be available on an accessible platform where changes can be tracked, and colloborated
The draft budget should be available on an accessible platform where changes can be tracked, and collaborated.


The following committees are responsible for:
The following committees are responsible for:
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In the scenario where KOI secures the funds to hire paid staff, the Wage Schedule will be composed by the Finance Committee based upon the inputs of the Board.
In the scenario where KOI secures the funds to hire paid staff, the Wage Schedule will be composed by the Finance Committee based upon the inputs of the Board.
If there is a new expenditure/program that materially effects the organization, then either:
* The budget must be amended, or
* An entire re-forecast of the budget must occur.
A Re-forecasted budget, or budget amendment, must be approved by majority vote in the Finance Committee. The Finance Committee must alert the rest of the organization about the changes in the budget.


=== Budgeting Procedure ===
=== Budgeting Procedure ===
== Fund Management ==
== Fund Management ==
=== Fund Policy ===
=== Fund Policy ===
As a 501(c)(3), KOI is responsible in dividing the net assets (equity) into dedicated funds. The IRS requires KOI to track expenses by funds, and to report expenses per funds in a statement of functional expenses on the tax return document the 990. The spending of expenses per fund is made transparent to the public on the 990 and on Washington State's Secretary of State's website.
KOI is required to keep track of only three Funds: Management, Fundraising, and Programs. However, to properly operate KOI keeps track of additional funds as need be.
Until restricted revenue is received by KOI, only expense transactions need a fund classification. If KOI is to ever receive restricted revenue, then all revenue should be assigned a Fund category when recorded.
Donors are never allowed to donate to a designated fund, restricted or not.
Expenses cannot be moved from fund to fund without justification. Expenses that are reimbursed for a restricted fund cannot be moved to another fund to be reimbursed again (double-dipping).
In a similar manner to the General Ledger Accounts, Funds can only be added by the Finance Committee, and they can only be approved by authorizers.
==== Unrestricted Fund Policy ====
Unrestricted funds have no set micro-budget, no set grantor/funder, and fewer stakeholders. No check-in, or approval, has to be done to spend from these funds.
===== Management Fund =====
Management is an unrestricted fund for expenses that are not for the mission of KOI, but are meant to ensure the going concern of the organization.
Common Examples include:
* Server Hosting expenses.
* HR expenditures
* Accounting and Finance expenditures
* Compliance expenditures
===== Fundraising Fund =====
Fundraising Fund is an unrestricted fund meant for raising more funds for KOI as an organization.
Common Examples include:
* Expenditures for a donation drive.
* Payments made to independent artists for a fundraiser
* Printing of pamphlets soliciting donations
* Payment to a Grant Writer to apply for Grants
* Revenue received by a sponsor for a fundraiser.
===== Programs (undesignated) Fund =====
Programs is the general fund that allows KOI to do the work for the mission. Unless otherwise stated, these funds are unrestricted. There can be restricted funds that are sub-funds of the Programs Fund.
All Evacuee Expenses come from the programs fund. Any other expense that is for the mission of KOI also comes from the Programs Fund.
==== Restricted Fund Policy ====
Restricted funds are avoided when possible. However, specific grants/contracts may require some funds to be set aside and restricted. When a fund is restricted, all expenses from said fund must be approved by an authorizer who is designated to be a steward of said funds. Restricted Funds require a budget, or a line item in the organization budget. When expenses are spent from a restricted fund, the Board must be updated in terms of the status of the budget of the fund.
Expenses spent from a restricted fund cannot be used for another restricted fund, or for expenses that should be used for Fundraising, Management, and/or Undesignated Program expenditures.
Restricted funds may be granted in two ways:
===== Reimbursement =====
A restricted fund may require expenditures from KOI for a certain purpose with the expectation of reimbursement of said expenses later. Budgets must be kept of the status of expenditures to provide the funder for reimbursement. Expenses cannot be moved to another fund to be reimbursed again, or multiple times. Expenses cannot be moved to an unrestricted fund after reimbursement.
===== Spend-down =====
A restricted fund may involve a designated donation, or grant, that requires the funds be spent in a specific manner. When this occurs, KOI tracks the expenses and produces a budget at the end of a reporting period indicating how much has been spent. Such funds may require unspent funds to be returned to the grantor if they aren't spent for the specific purpose of the fund. These funds cannot be used for other restricted funds, or unrestricted purposes. A budget must be composed for such funds and stewards of said funds must be aware of the status of such funds.
===== Volunteer Mutual Aid Fund =====
Currently, KOI only has one restricted fund. The Volunteer Mutual Aid fund was created to prevent burnout of volunteers. These funds may not be used for other purposes besides aiding the Volunteer. Unspent funds after a set amount of months will be returned to the unrestricted program funds. For more information, please see [[Volunteer Mutual Aid Fund|the page on the Volunteer Mutual Aid Fund.]]
=== Fund Procedure ===
=== Fund Procedure ===
== Evacuee Expenses ==
== Evacuee Expenses ==
=== Evacuee Expenses Policy ===
Expenses to support Evacuees from hostile states is the main mission of the Kawaguchi O'Connor Initiative.
  Evacuee Disbursement Budgeting Worksheet
 
===== Evacuee Expenses Policy =====
KOI must construct a per-evacuee budget of support expenses. The budget is presented to the organization in an all-organization meeting independent of the all-organization budget. The meeting will discuss, vote, and approve (or veto) the composed budget. The date and attendees must be noted.
 
The budget must consist of:
 
* The Category (Analogous to the GL Account)
* Estimated Frequency (Monthly, Weekly, etc)
* Preferred method of disbursement
* Max cap per disbursement
* Max disbursement per category per evacuee
* Anticipated spending per evacuee
* Authorization requirements.
 
The Finance Committee then is responsible for inputting, and reconciling, the approved budget into the all-organization budget.
 
==== Expense Authorization for Evacuee Expenses ====
 
===== Documentation Only =====
Expenses that require only documentation must be disclosed to the organization. No Authorization is needed.
 
===== Pre-Authorization =====
Authorization is sought from the organization before the disbursement is initiated. The nature of the expense, the evacuee, and justification is presented. If there is a general consensus the transaction should move forward, the expense request must be recorded. A signatory, or someone with authorization powers, will then record their approval. The disbursement then can move forward. A consensus can be veto'd by one or two folks.
 
===== Post-Authorization =====
Authorization is sought from the organization after the disbursement is initiated. The nature of the expense, the evacuee, and justification is presented. If there is a general consensus the transaction was appropriate, the expense request must be recorded. A signatory, or someone with authorization powers, will then record their approval. A consensus can be veto'd by one or two folks. If no authorization is provided, then the Finance Committee will initiate the next steps listed in the policy for the Misappropriation of funds.
 
===== Authorization Not required =====
No authorization or documentation is required for expenses that are so marginal the extra labor would not be worth it. No misappropriation or fraud should be possible with such expenses, or if possible, for it not to be worth it. Only rarely should such an expense skip authorization.
 
===== Reoccurring Expense Authorization =====
Occasional expenses require one authorization for a budgeted set disbursement that continues on a reoccurring basis. The authorization process is the same as when an Expense requires pre-authorization, but the transaction is disclosed to be reoccurring, and not to change.
 
The following table lists the Evacuee Support expenses and their authorization requirements.
{| class="wikitable"
|+
!Expense Category
!Pre-Authorization
!Post-Authorization
!Documentation Only
!No Authorization or Documentation
|-
|SNAP Supplement
|
|
|X
|
|-
|Clothing
|X
|
|
|
|-
|Non-emergency Medical Visits
|X
|
|
|
|-
|Emergency Medical Visits
|
|
|X
|
|-
|Public Transportation
|
|
|
|X
|-
|Rideshare
|X
|
|
|
|-
|Evacuee Vehicles
|X
|
|
|
|-
|Legal Documentation
|X
|
|
|
|-
|Evacuation
|X
|
|
|
|-
|Housing
|X
|
|
|
|-
|Furnishments
|X
|
|
|
|-
|Medical Sundries
|
|
|X
|
|-
|Living Sundries
|
|
|X
|
|-
|Miscellaneous Gender Affirming Care
|
|
|X
|
|}
 
==== Evacuee Support Expense Documentation ====
Each expense should have a corresponding primary document that includes:
 
* Amount of the expense
* Date of the Expense
* Vendor(s) if not an evacuee being reimbursed
* Primary Unique ID (If Available)
 
Expenses Documentation should be stored in a digital space that is accessible to the Finance Committee.
 
===== Prohibited Evacuee Expenses =====
Evacuees, and Care Coordinators, are prohibited from purchasing the following as "Evacuee Support Expenses":
 
* Purchase of illegal items or illegal services.
* Purchase of Nicotine, Cannabis, and Alcohol for anyone under 21.
* Gambling.
* Purchase of firearms.
* Political campaigning.
 
If such expenses were to occur, then a misappropriation of funds (at the minimum) is considered to have occurred.
 
==== Evacuee Expense Authorization ====
Expenses that require authorization must have:
 
* The name of the KOI volunteer that approved the expense.
* The name of the KOI Volunteer that proposed the expense
* The date of the approval
 
A KOI Volunteer cannot approve their own expense.
 
Expenses that do not require authorization are either budgeted to include documentation only, or are a re-occurring expense that has pre-authorization to occur.
 
Those with record-keeping, or custody, powers cannot authorize an expense.
 
=== Evacuee Expenses Procedures ===
=== Evacuee Expenses Procedures ===
== Non-Evacuee Accounts Payable ==
== Non-Evacuee Accounts Payable ==
=== Non-Evacuee Accounts Payable Policy ===
=== Non-Evacuee Accounts Payable Policy ===
==== Expense Authorization options ====
===== Documentation Only =====
Expenses that require only documentation must be disclosed to the organization. No Authorization is needed.
===== Pre-Authorization =====
Authorization is sought from the organization before the disbursement is initiated. The nature of the expense, and justification is presented. If there is a general consensus the transaction should move forward, the expense request must be recorded. A signatory, or someone with authorization powers, will then record their approval. The disbursement then can move forward. A consensus can be veto'd by one or two folks.
===== Post-Authorization =====
Authorization is sought from the organization after the disbursement is initiated. The nature of the expense, and justification is presented. If there is a general consensus the transaction was appropriate, the expense request must be recorded. A signatory, or someone with authorization powers, will then record their approval. A consensus can be veto'd by one or two folks. If no authorization is provided, then the Finance Committee will initiate the next steps listed in the policy for the Misappropriation of funds.
===== Authorization Not required =====
No authorization or documentation is required for expenses that are so marginal the extra labor would not be worth it. No misappropriation or fraud should be possible with such expenses, or if possible, for it not to be worth it. Only rarely should such an expense skip authorization.
===== Reoccurring Expense Authorization =====
Occasional expenses require one authorization for a budgeted set disbursement that continues on a reoccurring basis. The authorization process is the same as when an Expense requires pre-authorization, but the transaction is disclosed to be reoccurring, and not to change.
==== Expense Documentation ====
Each expense should have a corresponding primary document that includes:
* Amount of the expense
* Date of the Expense
* Vendor(s)
* Primary Unique ID (If Available)
Expenses Documentation should be stored in a digital space that is accessible to the Finance Committee. In addition, the disbursement should be designated to come out of a specific fund.
=== Non-Evacuee Accounts Payable Procedure ===
=== Non-Evacuee Accounts Payable Procedure ===
== Credit Cards ==
== Credit Cards ==
Line 304: Line 846:
If a card is approaching the spending limit, the card holder may request a signatory to complete an early payment. The board treasurer can confirm if there are cash reserves available for such a payment.
If a card is approaching the spending limit, the card holder may request a signatory to complete an early payment. The board treasurer can confirm if there are cash reserves available for such a payment.


Credit card holders may attach the credit card to a peer-to-peer (P2P) monetary option<!-- recommend "service" --> such as Venmo, Cash App, Paypal, etc.
Credit card holders may attach the credit card to a peer-to-peer (P2P) monetary service such as Venmo, Cash App, Paypal, etc.


Credit card holders may use the credit card for recurring expenses, and may<!-- Recommend "only need approval for the first instance" or similar. Also perhaps add something about needing re-authorization if the cost of the recurring expense changes beyond a set percentage of the primary amount. --> only ask for approval once due to the consistent nature of the expense.
Credit card holders may use the credit card for recurring expenses. These expenses need approval for the first instance. Afterwards, no further authorization is needed barring changes in the purpose of the transaction, amount, or timing.<!-- Recommend "only need approval for the first instance" or similar. Also perhaps add something about needing re-authorization if the cost of the recurring expense changes beyond a set percentage of the primary amount.
 
Josh - Good point. I rephrased it. -->  


If there is an unknown, and/or unauthorized, transaction on the card, the card holder must notify the signatories within 24 hours of the posting date.
If there is an unknown, and/or unauthorized, transaction on the card, the card holder must notify the signatories within 24 hours of the posting date.
Line 328: Line 872:


==== Cessation of Credit Card use ====
==== Cessation of Credit Card use ====
Credit card cessation is required when:
Credit card use cessation is required when:


* Violation, or violations, of policy threaten KOI’s sustainability and going concern
* Violation, or violations, of policy threaten KOI’s sustainability and going concern
Line 339: Line 883:
The immediate next step is to close the credit card. No further credit card can be issued to the credit card holder unless it was determined there was an error in the decision of cessation.
The immediate next step is to close the credit card. No further credit card can be issued to the credit card holder unless it was determined there was an error in the decision of cessation.


Only the board treasurer, the board chair, and the executive director<!-- Recommend noting more explicitly that all three are required. --> can make the decision to cease use of a credit card for a credit card holder. No vote is required out of the three, but disclosure must be made. No veto regarding such a decision can be made.
Only the board treasurer, the board chair, or the executive director<!-- Recommend noting more explicitly that all three are required. - Clarifying that only one is needed to deny CC usage. --> can make the decision to cease use of a credit card for a credit card holder. No vote is required out of the three, but disclosure must be made. No veto regarding such a decision can be made.


Once there is a decision to remove the credit card from the credit card holder, the decision must be disclosed to the credit card holder, the evacuees depending on the credit card, the finance committee, and to the bank. A bank signatory will then close the account<!-- Close the account, or just the card? -->.
Once there is a decision to remove the credit card from the credit card holder, the decision must be disclosed to the credit card holder, the evacuees depending on the credit card, the finance committee, and to the bank. A bank signatory will then close the card.


Further consequences can include:
Further consequences can include:
Line 356: Line 900:
=== Credit Card Procedure ===
=== Credit Card Procedure ===
== Volunteer Mutual Aid Fund ==
== Volunteer Mutual Aid Fund ==
See Mutual Aid Fund Policy and Procedure.
The policy regarding the [[Volunteer Mutual Aid Fund]] is a separate policy that has to be separately approved.


== Accounts Receivable - Donations ==
== Accounts Receivable - Donations ==
=== Donations - Policy ===
=== Donations - Policy ===
KOI accepts donations as a form of community support. The donations should be logged appropriately as revenue.
Almost all methods of donations are accepted such as cash, checks, ACH. In-kind donations are accepted on a case by case basis.
Restricted donations, or advised donations, are not accepted.
Workplace donations that are accepted must track the employee that donated, the organization that matches the donation (if there are matching donations).
Documents should be kept that showcase the fund destination requested by the donor, the donor themself, the amount of the donation, and the date of the donation.
Ideally, there is a donation CRM that keeps track of the donors and the donations. End of year donation receipts should be provided by KOI for all non-anonymous donors.
If there is a transaction fee for the donation, the transaction fee should be recorded separately, and the donation should be recorded at gross value.
If there is an organization that conflicts with the values of KOI, or the mission of KOI, KOI has every right to reject the donation and refund the donor.
=== Donations - Procedure ===
=== Donations - Procedure ===
== Accounts Receivable - Grants ==
== Accounts Receivable - Grants ==
=== Grant Curation and Tracking - Policy ===
=== Grant Curation and Tracking - Policy ===
Government, or Foundation Grants, can be accepted by KOI if there is a capacity determined to be available for such opportunities.
To accept such grants, they must be approved by a KOI Volunteer with Authorization powers. Any contracts, Memorandum of Understandings, Documentations, etc. must be kept accessible for those who are managing the Grant's funds, and the Finance Committee.
A Grant must have:
* A designated purpose if not unrestricted.
* A set time to spend funds.
* A set budget to spend said funds.
* A delegated KOI Volunteer to manage said funds.
The Finance Committee will designate a new fund for the Grant while the Grant is active. The fund can only be marked as inactive once the audit of the last year the grant was active has been completed.
All received monies for the grant must be classified under the appropriate fund in the Accounting software. All expenses for the grant must be allocated from the dedicated fund for the Grant.
===== Grant Curation =====
KOI will accept any Grant offered by a Government entity as long as it is for the mission of KOI.
KOI will not accept Grants/Funds from organizations that:
* Participate in systemic Transphobia/Queerphobia.
* Participate in Genocide of Indigenous Peoples.
* Participate in the oppression of BIPOC individuals.
=== Grant Curation and Tracking - Procedure ===
=== Grant Curation and Tracking - Procedure ===
== Bank, and Credit Card, Reconciliation ==
== Bank, and Credit Card, Reconciliation ==


=== Account Reconciliation Policy ===
=== Account Reconciliation Policy ===
Account reconciliation is an important internal control to ensure proper record keeping, transparent records, and an accountable finance staff. Accounts are reconciled within 15 days of the statement being received. Each transaction on the statement must have a matching transaction recorded in the accounting software.
Accounts that require regular reconciliation include:
* Bank Statements
* Credit Card Statements
* Line of Credit Statements (If Any)
External Account statements must include:
* Statement beginning date
* Statement ending date
* Account beginning balance
* Account ending balance
* Account aggregate outflows
* Account aggregate inflows
Account Reconciliation must ensure the following matches between the accounting system and the account statement:
* Account beginning balance
* Account ending balance
* Account aggregate outflows
* Account aggregate inflows
Copies of the statement and a Reconciliation report must be made available to all who inquire within a certain amount of days. Only volunteers with Recordkeeping privileges (The Finance Committee) may reconcile an account. The Accounting software must track who did the reconciliation, when, and if an account reconciliation is ever undone. An audit log must be available for Account Reconciliation.
If there is an unsolvable issue when it comes to reconciliation, the unaccountable amount may be put into a GL Account for Account Reconciliation issues. The board must be notified if an account reconciliation fails, and the GL Account had to be used.
Account reconciliations should ideally be completed after all transactions are accounted for. If there are any logistical issues in meeting such a deadline, an account can be reconciled as long as holding GL accounts for revenue and expenses are used.


=== Account Reconciliation Procedure ===
=== Account Reconciliation Procedure ===
== Payroll ==
== Payroll ==
=== Payroll Policies ===
=== Payroll Policies ===
KOI will prepare Payroll when funds are available for sustainable employment to assist our community. The Finance Committee will own the responsibility of budgeting for the organization to be able sustainable to pay employees.
The Organization's ultimate goal is to value the labor of the individuals and to pay payroll. There will be no value judgment in regards to valuing that labor via the Volunteer Mutual Aid Fund, Non Employee Contracting, and/or a paycheck. The decision to provide a wage to individuals will solely be based on logistics, finances, and legality.
KOI's Payroll will only be based upon a hourly wage, and not on a based salary.
==== TImesheets ====
A substantiation of labor will be provided to the person responsible for implementing payroll. Most likely, this will be a timesheet.
The document will list:
* The Pay Period
* The Employee
* The timesheet approver
* The funds used to pay for the wages
* The days worked
* The aggregate hours worked.
* Any Paid time Off
The employee will be responsible for all components of the timesheet. The employee and the approving individual are responsible for a timely submission of the timesheet.
Pay may not be withheld for an un-submitted timesheet. However, timesheets are required for legal compliance. Accountability will be implemented in case of timesheet tardiness. Natural consequences will be implemented, including separation of the employee and the organization.
==== Part- Time vs. Full Time ====
An employee can be considered Part-time or Full-time. An employee is considered full time if they work over 30 hours per week for KOI, and work every week for KOI. Part-time employees can work on their own time, but they will not receive certain benefits. The benefits Part-time employees will not be eligible for will be explicitly stated.
==== Paid Time Off ====
Paid Time off must be provided in the following methods
====== Sick/ Medical Time ======
Sick/Medical Time is a yearly allocation of Medical time that is immediately accessible by the employee upon hire. Sick time is not accrued. Sick time will not roll over to next year. Employees are encouraged to look at PFMLA options in situations where medical situations are acutely catastrophic to the continued work of the employee. Sick time must comply with the local laws of the City of Seattle. Sick time does not need to be communicated ahead of time before being utilized. Proper intentional communication is required between all parities to ensure sick time is correctly recorded to ensure all parties remain compliant with local laws.
====== Vacation Time ======
Vacation Time is accrued based upon a fixed rate decided beforehand based upon the hours, or days, worked. A probationary period will prevent usage of Vacation time, but not accrual, when an employee is onboarded. A cap on the amount of accrued vacation time will be pre-decided and communicated to the employee. Vacation time will also have a roll-over limit between years. Vacation time must be requested a set time period beforehand to ensure proper delegation of tasks.
====== Holiday Time ======
KOI will decide upon Holidays that all employees can partake in throughout the year. There will be a set amount of days provided to the employee to take time off to celebrate holidays that appeal to the employee's cultural values and heritage.
====== Bereavement ======
In the event of a death in the immediate family, family two connections away, and/or death of a chosen family member, the employee can request bereavement. Bereavement can be used for the immediate day of learning of said passing, possible administrative burdens in regards to the death, and/or funerals. Bereavement is unlimited for employees.
===== Other Time Off =====
====== FMLA ======
Family and Medical Leave is unpaid time the employee can take off to take care of themselves, or of a family member. The FMLA must be requested a set period of time before being utilized. There must be a set return date, and a set check in date.
====== PFMLA ======
Paid Family and Medical Leave is provided by Washington State. Employees cannot be required to, but are highly encouraged to create a PFMLA web profile with the Employee Security Department (ESD) of Washington State. PFMLA can be used for taking care of a loved one, or self, when going through an acutely catastrophic medical issue that prevents the employee from working for KOI. The employee must communicate the need to be on PFMLA, along with supporting documentation, as required by ESD. The employer will also abide by the responsibilities listed by ESD.
The Employee will provide a proposed date of return, or a check in date, to KOI.
====== Unpaid Time Off ======
If an employee needs to take time off work without pay, they can reasonably request in a way that is similar in requested vacation time. KOI will communicate a max amount of time a full-time employee can take off before considering their job abandoned.
==== Overtime ====
Overtime is classified as either over 40 hours per work week, and over the total hours for the pay period. If an employee works overtime, they will be paid 1.5 their hourly rate. Exempt salaried employees are exempt from Overtime.
Overtime must have written, and referable, documentation from the approver of the timesheet '''BEFORE''' overtime is worked. Overtime worked with authorization sought after the overtime is worked is considered unauthorized.
Unauthorized overtime brings natural consequences, including legal/compliance issues for KOI. If there are repeated instances of unauthorized overtime, all parties will reach a restoration of expectations.
===== Moonlighting =====
Employees may work other non-employee gigs, or hold other jobs with other organizations. Employees may NOT submit timesheets requesting payment for work done, or for paid time off, that they are requesting payment from another organization. An example could be an employee requests vacation for May 26th 2026, but also work those same 8 hours for another organization. This is considered a form of fraud, and natural consequences can follow including a possible separation between KOI and the employee.
==== Payroll Processing ====
Timesheets are aggregated and multiplied by the hourly rate assigned for said employee for the pay period. The disbursement from the organization to the employees will be done on the pay check day. The pay check day should be after the pay period to provide sufficient time to correct timesheets, plan fund disbursements, and budget accordingly.
Once the disbursements are completed, the total Payroll Wage expenses should be logged in the Accounting System.
Payroll Tax Liabilities must be calculated and logged in the Accounting System. Deposits, payroll tax returns, and disbursements must be done on a timely manner to ensure KOI is compliant with payroll laws of all levels of government.
Payroll non-tax liabilities must also be calculated which can include:
* Retirement Account Contributions
* Garnishments
* Charitable Contributions
* Health Insurance Contributions
* Union Dues (If Applicable)
=== Separation or resignation ===
If an employee will cease employment with KOI, the Employee deserves severance to maintain a life of stability in a hostile capitalist society. However, KOI would be very fortunate to provide severance to every employee. KOI will provide such severance only if the cash budgeting can afford it, and if such severance can stabilize the employee's financial life post-separation.
If vacation time is promised to be paid off to an employee who separated with KOI, then the vacation time should be paid out. There should also be a balance sheet account to hold the balance of unpaid vacation time.
=== Payroll Procedures ===
=== Payroll Procedures ===
== Compliance, Audits, and Government Filings ==
== Compliance, Audits, and Government Filings ==
KOI will retain copies of every compliant, audit, and/or government filing and keep it organized in case there are any need to refer to past filings.
=== Federal – Internal Revenue Service ===
=== Federal – Internal Revenue Service ===
==== Annual Filings - 990 ====
==== Annual Filings - 990 ====
The 990 is the annual filing with the IRS as a non-profit. The deadline for such filings is May 15th, or October 15th (if an extension was filed).
To file a 990, the prior year's financials must be completed and closed (meaning, no modifications allowed). Ideally, the financial statements would be audited if required for a grant.
To file a 990, the following pieces of information is required:
* List of Board of Directors
* Compensated Directors
* Major Donors
* An end of year Income Statement for the prior year.
* A end of year Balance sheet statement for the prior year.
* A list of expenses per Management, Programs, and Fundraising.
The 990-N is the annual filing KOI can file in place of the 990 if certain requirements are met. KOI currently doesn't meet those requirements, and it will unlikely be able to due to the financial obligations of supporting evacuees.
==== Payroll Filings 940 and 941 ====
==== Payroll Filings 940 and 941 ====
If KOI were to ever have payroll, regular payroll filings would need to be filed. During payroll, employee deductions for Unemployment Insurance (UI or FUTA) would be held in a liability account. The 940 report would need to be filed before the end of the month following the end of the prior quarter.
During payroll, employee deductions for federal withholding, social security, and medicare would be held in a liability account. At the same time, employer contributions to social security and medicare will be expensed and held in a liability account. At the end of the month after the quarter ends KOI will pay the aggregate totals reported in a 941 form to the IRS.
If it works better for KOI, a deposit system can be used to keep on top of the payroll liabilities through the quarter.
==== Annual W-2's and W-3s ====
If there were payroll in a calendar year, the W-2s and W-3s are due at the end of January of the following year. The W-3 will contain the aggregate information for all of the boxes of the W-2s filed for the year. Ideally, this is filed electronically.
==== Annual 1099's and 1096's ====
If there are payments to Non-employee contractors (individuals, sole proprietorship) or Single member LLC's, KOI must collect a W-9 from said vendor if the aggregate amounts paid for the year meet, exceed, or will exceed $600.00. KOI will then file the 1099's by the end of January following the year, along with a 1096 that will consolidate all of the payments of the 1099s.
=== Washington State – Secretary of State ===
=== Washington State – Secretary of State ===
==== Corporation Annual Filing ====
Every year, KOI is required to file an annual report with the State of Washington's Secretary of State. The report is due by the end of the month of July.
Information disclosed must include:
* Current Business Address
* Current Registered Agent
* Total Revenue of the organization for the last fiscal year.
==== Charity Annual Filing ====
Every year, KOI is required to file an annual report with the State of Washington's Secretary of state for the Charity Profile. The report is due by the end of the month of November.
Information disclosed must include:
* Current Business Address
* Current Board of Directors
* Beginning and Ending Asset Balance
* Revenue from Donor Solicitations
* Non-Donor Revenue
* Total Program Expenditures
* Total Expenditures
=== Washington State – Department of Revenue B&O ===
=== Washington State – Department of Revenue B&O ===
Every Year, KOI will file the annual Excise tax by April 15th 2026 electronically via dor.wa.gov and the Secure Access Washington (SAW) Account.
=== Washington State – Payroll ===
=== Washington State – Payroll ===


==== ESD Filing ====
==== ESD Filing ====
After payroll is calculated and Unemployment withholdings are withheld, KOI will file an electronic return with ESD via the SAW account for the fiscal quarter. Funds will be sent to ESD electronically, or by paper check. The due date for the filings is the last day after the last fiscal quarter. It is recommended a csv is prepared well before the filing to make the filing easier. Instructions can be found on esd.wa.gov.


==== LnI Filing ====
==== LnI (Labor and Industries) Filing ====
Before KOI begins withholding LnI withholdings, a Business Type Class must be designated for all workers, and the appropriate rate written down. These rates can be found on lni.wa.gov (Most likely 5308 - Community Action). The rate is multiplied by the amount of hours worked in a payroll period, and withheld from pay to be allocated in a payroll liability account. At the end of the quarter, the LnI return is filed by multiplying the total amount of payroll hours for the prior fiscal quarter by the LnI rate chosen. The return is due by the last day of the month following the fiscal quarter. The return is filed on lni.wa.gov, and it is recommended a CSV of the hours of the prior quarter be prepared ahead of time.


==== PFMLA Filing ====
==== PFMLA Filing ====
KOI will need to determine what amount of the premiums will be paid by KOI, and what amount will be paid by the employee. Once those rates have been decided, the employer withholdings are expensed and put into a payroll tax liability, and the employee deductions are put into a payroll tax liability. At the end of the month following the end of a fiscal quarter, a summary of hours, payroll wages, and PFMLA withholdings is submitted to ESD electronically through a SAW account. A payment is sent to ESD by check or ACH option on the SAW Account.


==== WA Cares Filing ====
==== WA Cares Filing ====
KOI will need to request if any employee wants to exempt themselves from WA Cares. The employee deductions are put into a payroll tax liability during every payroll. At the end of the month following the end of a fiscal quarter, a summary of hours, payroll wages, and WA Cares withholdings is submitted to ESD electronically through a SAW account. A payment is sent to ESD by check or ACH option on the SAW Account.


=== King County ===
=== King County ===
No report currently required by King County.
=== City of Seattle ===
=== City of Seattle ===
To remain compliant with the City of Seattle, KOI will file a business tax return with the City digitally via [https://www.filelocal-wa.gov/ File Local] .This report is due at the end of April of every year.
Retrieved from "https://wiki.koinitiative.org/index.php/KOI_Financial_Policies_and_Procedures"