KOI Financial Policies and Procedures: Difference between revisions
JoshFreese (talk | contribs) →All Organization Financial Policy: Added Materiality steps. |
Brycecantell (talk | contribs) m →Purpose, scope, and definitions: Undoing tutorial edit |
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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- | Review cadence: Semi- | ||
== Purpose, scope, and definitions == | == Purpose, scope, and definitions == | ||
=== Purpose === | === Purpose === | ||
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* For compliance with grants | * For compliance with grants | ||
* For compliance with audits | * For compliance with audits | ||
* For reference by KOI | * For reference by KOI | ||
=== Recognition of Capitalism and Harm === | === Recognition of Capitalism and Harm === | ||
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Finance Comrades forbidden from holding authorization duties. Bank Signatories are forbidden from holding record-keeping duties. | Finance Comrades forbidden from holding authorization duties. Bank Signatories are forbidden from holding record-keeping duties. | ||
=== | === Materiality === | ||
==== Materiality for evacuee expenses ==== | ==== Materiality for evacuee expenses ==== | ||
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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 | 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 into dedicated funds. The IRS | 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. | 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. | ||
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===== Programs (undesignated) Fund ===== | ===== Programs (undesignated) Fund ===== | ||
Programs is | 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. | All Evacuee Expenses come from the programs fund. Any other expense that is for the mission of KOI also comes from the Programs Fund. | ||
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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 | 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. 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. | ||
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==== 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 | ||
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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, | 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 | 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: | ||