KOI Financial Policies and Procedures: Difference between revisions
JoshFreese (talk | contribs) →Restorative Steps for Misappropriation: Added in natural consequences for misappropriation of funds. |
JoshFreese (talk | contribs) →Fund Management: Added language on unrestricted and restricted funds. |
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* Additional authorizers for transactions for future transactions from the person who misappropriated funds. | * 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 authorization steps for all transactions involving the person who misappropriated funds. | ||
* Additional documentation | * Additional documentation requirements for transactions involving the person who misappropriated funds. | ||
* Removal from the transaction process entirely for 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. | * Redelegation of tasks for a volunteer who misappropriated funds. | ||
* Using funds from a restricted fund for expenses not allowed by said restricted fund. | |||
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. | 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. | ||
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* Intentional misstatement of financial statements | * Intentional misstatement of financial statements | ||
* Using KOI's funds for purchase of illegal goods. | * 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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== 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 required 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 our 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 6 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 == | ||