Policy and Procedures Manual - sia.sk.ca 4 Financial... · Chapter 4 Financial Management ... off and filed with other receivables, ... 7. For any membership related revenues other

Policy and Procedures

Manual

Chapter 4 Financial Management & Control

July 2016

Chapter 4

Financial Management & Control Table of Contents

4.1 Budgeting, Financial Reporting & Forecasts

4.2 Revenues

4.3 Expenses

4.4 Assets

4.5 Cash Management

4.6 Audit

Statement of Policy and Procedure: Revenues Page 1 of 2

4.1 Budgeting and Reporting Version: July 21, 2016

STATEMENT OF POLICY AND PROCEDURE

Chapter & Policy #: Financial Management & Control, 4.1, version 1

Approved by: Provincial Council Effective Date: July 27, 2016

Applies to: Councillors, Branch Executives, ED & Registrar and staff

Approval Date: July 27, 2016

Enforced by: ED & Registrar Replaces Version: N/A

INTRODUCTION 1. The Saskatchewan Institute of Agrology (SIA) has set up financial management, budgeting, and reporting

tools to manage the Institute’s financial resources. The methodologies follow recognized accounting practices. Results and processes are reviewed yearly by an independent auditor, with results reported to the Provincial Council and to the Institute’s members at the Annual General Meeting (AGM).

PURPOSE 2. The purpose of this policy is to describe the financial reporting and control that SIA provides to support

work of the Institute.

POLICY 3. The SIA will use recognized financial software and supporting systems to manage the Institute’s finances. 4. A high level budget/forecast will be prepared as part of the development of the Institute’s multi-year

strategic planning process. 5. An annual operating and capital budget will be prepared for review and approval by the Provincial Council

prior to the beginning of each new fiscal year.

DEFINITIONS 6. See Definitions.

RESPONSIBILITY 7. It is the responsibility of Council to approve a multi-year strategic plan and budget.

8. It is the responsibility of the Executive Director & Registrar (ED & Registrar) to coordinate development of

the annual operating and capital budgets in conjunction with staff and that these budgets support the approved strategic direction of the Institute.

Statement of Policy and Procedure: Budgeting & Reporting Page 2 of 2

SUPPORTING DOCUMENTS

9. # 4.2, Statement of Policy & Procedure, Revenues 10. # 4.3, Statement of Policy & Procedure, Expense 11. # 4.4, Statement of Policy & Procedure, Assets

Procedures

FINANCIAL SYSTEMS 1. The Institute uses Simply/Sage 50 Accounting to maintain the accounting records. Payroll is outsourced

to Payworks, a payroll processing company. Beanstream Internet Commerce Inc® is used as the merchant account for the SIA.

BUDGET PREPARATION 2. At the beginning of the fourth (4th) quarter of each fiscal year, the ED & Registrar will confer with the

Communications and Marketing Coordinator on any strategic or emerging issues that may affect assumptions in the coming year’s budget.

3. The Communications and Marketing Coordinator will prepare a draft budget for review by the ED &

Registrar utilizing previous year and current year results, in conjunction with any adjustments identified by other staff and/or the ED & Registrar.

4. Once approved by the ED & Registrar, a preliminary budget is presented to the Council in October of

each year for review. After adjustments, a final budget for the coming year is presented to Council in December for review and final approval. Once approved, the budget remains fixed for the year.

FINANCIAL REPORTING 5. The Communications and Marketing Coordinator prepares monthly financial statements consisting of a

current income statement, balance sheet, and notes to the financial statements. The monthly report also shows performance of key financial categories compared to performance in previous years. The income statement shows monthly variances of each revenue and expense item compared to year to date expectations.

6. In July, the Council conducts a mid-year financial review. Beginning with the June 30 month-end a year

end projection is added to the financial reporting package each month. 7. The December 31 year-end statement is prepared by the Communications and Marketing Coordinator

once the year closes, typically at the end of January. Once approved by the ED & Registrar, the completed statement is reviewed by the auditors in February. Audited statements are typically completed in the first week of March in preparation for review and approval at a March Council meeting.

. 8. The SIA has six different branches including Yorkton, Saskatoon, Northeast Branch, Northwest Branch,

Southwest Branch and Regina. Unaudited financial statements from each of these Branches are included as part of the SIA audit in a separate schedule. It is the responsibility of Branch Executive to ensure these are delivered to the SIA office by no later than January 15th of each year, in order to facilitate completion of the audited statements.


4.2 Revenues Version: July 21, 2016




Applies to: Councillors, Branch Executives, ED & Registrar and office staff



INTRODUCTION

1. The Saskatchewan Institute of Agrology (SIA) sources of revenue include membership fees, event

income, sponsorship revenue, career postings, and material sales. The bulk of the revenue comes through membership fees.

PURPOSE

2. The purpose of this policy is to describe the revenue practices of the SIA.

POLICY

3. Membership fees are set by Council with the approval of the membership, with fees for new, reinstated, and dual members prorated by quarter. Articling members pay a reduced fee for their first year.

4. Registration charges for the annual convention, continuing professional development events, and sale of

materials are set at the discretion of the ED & Registrar, or their designate at the provincial office and/or by executive in different Branches as appropriate.

5. Web-based member information collection and fee collection shall be subject to the most stringent

security practices.

6. Funds provided for memberships in the coming fiscal year shall be assigned to deferred revenue and realized as revenue in the year for which membership is assigned.

7. Goods offered for sale shall be priced to recover all costs associated with them.

8. Investments include restricted (legal fund) and non-restricted funds, which are invested and managed by

RBC Securities. There is an annual review of investments and the contract with the Ed & Registrar during the annual audit during February of each year. (See 4.5 #12)



RESPONSIBILITY

10. It is the responsibility of the ED & Registrar to develop a draft budget for the coming year based on previous year’s performance combined with any other known costs associated with strategic initiatives and/or emerging issues.

Procedures

MEMBERSHIP REVENUE 1. There are six types of members, Professional Agrologists (PAg); Agriculture Technologists (AT); Articling

Agrologists (AAg); Articling Agriculture Technologists (AAT), Retired Members, and Student Affiliates. Membership fees can differ for each type of member. There are additional fees including application fees, a reinstatement fee, late payment fees, and fees associated with the transfer in of members from out of province. Up to date membership fees are posted on the SIA website.

2. Each October, the SIA will send notices to all registered members with information regarding registration

renewals for the upcoming year. Members have the option to pay the fee through credit card, online debit, or cheque. Cash payments are accepted only at special events, including branch events, or for student memberships.

3. All membership fees are due by December 31 of the preceding year of membership.

4. A late fee will be assessed if payment is not received by January 15.

5. Anyone who has not paid their annual registration fee by February 15 of the year of membership will be removed from the register.

6. Once payment is received, a staff member will update the membership database with payment information. A receipt is generated and emailed to the member from the membership database called Contact Manager System (CMS). This system is linked to the website. Membership invoices are printed off and filed with other receivables, and recorded in daily transaction reports.

7. For any membership related revenues other than the membership fees, an order is generated in CMS. Once payment is received for the order a receipt is generated and then emailed to the member. One copy is then printed for the office and placed in the Accounts Receivable binder and recorded in the daily transaction reports.

NON MEMBER REVENUE 8. For non-member related revenue including continuing professional development events, sponsorship,

and career postings, a staff member will code the revenue, and generate an invoice through the Institute’s Contact Management System (CMS). Most orders, with the exception of sponsorship revenue, are handled through this system. Sponsorship revenue is coded separately and invoiced through SIA’s accounting system, Simply Accounting.

9. Once payment is received, a receipt is generated and sent to the customer.

Statement of Policy and Procedure: Expenses Page 1 of 4

4.3 Expenses Version: July 21, 2016







INTRODUCTION 1. The Saskatchewan Institute of Agrology (SIA) expenses include program expenditures (salaries or

supplies associated with program delivery), administration costs (rent, software, board costs, communications, office supplies, etc;) and human resources costs (salaries, benefits, pensions, etc;), and cost of goods sold.

PURPOSE 2. The purpose of this policy is to provide guidance on the treatment of expenses of the organization as well

as identify and implement appropriate controls over expenses.

POLICY Purchase of Goods 3. All purchases of goods and services or agreements to purchase goods and services shall be subject to

appropriate authorization.

4. Costs will be recognized at the time they are incurred unless they qualify for treatment as an asset under the capitalization policy.

Contracts 5. All contracts or agreements that materially affect the direction or finances of the organization shall be

reviewed and authorized by the Council. In particular, without restricting this, any contract with a total value over $10,000 shall be reviewed and authorized by the Council.

6. All contracts over $10,000 should be subjected to an RFP process, except as authorized by Council.

Expenses 7. All employees or board members travelling on organization business will adhere to the travel guidelines

for expenses as published by the Institute. These follow the expense policies of the Government of Saskatchewan and are updated April 1 and October 1 of each year.



RESPONSIBILITY 9. It is the responsibility of the Provincial Council to approve expenses for the coming year as part of the

budget approval process and to assure itself that expenses are being managed and effectively controlled.

10. It is the responsibility of the Executive Director and Registrar (ED & Registrar), and the other signing designates, to ensure that expenses are appropriately authorized, that they are consistent with the intent of the budget, and that appropriate internal controls monitor all expenses.

11. It is the responsibility of the Communications and Marketing Coordinator to ensure that all staff follow the

procedures outlined for the expense policy and that discrepancies are brought to the attention of the ED & Registrar.

SUPPORTING DOCUMENTS 12. Policy & Procedure # 2.6, Vendor Contracts 13. Policy & Procedure # 2.7, Insurance

14. Policy & Procedure # 4.3, Expenses

15. Policy & Procedure # 4.4, Assets

16. Policy & Procedure # 5.3, Compensation and Working Conditions.

Procedures

ACCOUNTS PAYABLE 1. The Institute has three types of expenses: payroll; expenses incurred by staff and council; and all other

“general” expenses. 2. Most expenses are general expenses, and are received by invoice, through email or regular mail. 3. Expenses are verified by a staff member prior to being processed for payment. 4. Payment of expenses is done through cheque, Visa, or through an authorized direct bank withdrawal.

PAYROLL EXPENSES 5. Payroll is contracted out to Payworks, a payroll processing company. 6. Employees are paid every 2 weeks, which is one week following the end of each pay period. 7. All staff use timesheets to record their hours of work. These are completed every two weeks.

8. Time sheets of staff are approved by the ED & Registrar. Time sheets of the ED & Registrar are signed by a Council member with pre-approved signing authority.


9. The Communications & Marketing Coordinator, or their designate, processes the payroll through Payworks, which creates payroll reports at the time of processing. The Payworks reports are then provided to the bookkeeper to record the information into Simply Accounting.

10. Payworks maintains online accounts for all staff members. RRSP Remittances 11. The SIA provides matching RRSP contributions to each employee as per their employment contracts. 12. The amounts are remitted online by the Communications and Marketing Coordinator, or their designate,

to Industrial Alliance, an SIA benefits provider. 13. The amount is paid via pre-authorized withdrawal. 14. The Communications and Marketing Coordinator, or their designate, provides reports from Industrial

Alliance to the bookkeeper for recording in Simply Accounting. Vacation Pay 15. Vacation pay for each employee is based on the vacation policy and procedures and is outlined in each

individual’s employment contracts.

16. Accrued vacation time is updated by the bookkeeper from employee timesheets. It is recorded as a separate balance sheet item.

17. Employees may carry over 5 vacation days per year and may request additional carry-over in advance of

year-end. This will be recognized as part of the Institute’s liabilities for staff remittances on the balance sheet.

STAFF AND COUNCIL EXPENSES

18. Staff and council must fill out and sign an expense claim form, together with supporting documentation, for all expenses incurred on SIA related business.

19. The Communications and Marketing Coordinator, or their designate, will validate the information to

ensure the claim follows the Institute’s expense guidelines. 20. Once validated, the ED & Registrar reviews the claims of staff, and authorizes payment. The Council’s

signing authorities will authorize the ED & Registrar’s expenses. 21. The Communications and Marketing Coordinator, or their designate, will prepare the cheque and record

the transaction in Simply Accounting. 22. The ED & Registrar approves the expenditure and signs the cheque once it is ready. The

Communications and Marketing Coordinator, or their designate, obtains a second signature from a Council member with pre-approved signing authority.

23. The cheque is then sent as payment.

GENERAL EXPENSES

24. General expenses consist of all expenses incurred by SIA other than payroll and staff and/or Council

expense claims. 25. Once an invoice is received, the invoice is validated, stamped, dated, and coded to an expense account.


26. The invoice is then entered into the Accounts Payable (A/P) sub ledger in Simply Accounting by the Communications and Marketing Coordinator, or their designate.

27. Once the invoice is approved for payment, the Communications and Marketing Coordinator, or their

designate, will prepare the cheque from Simply Accounting. 28. The ED & Registrar reviews the background documents, and internal validation, and signs the cheque if

payment is approved. If there are any discrepancies he/she will seek additional information before approving the payment.

29. Once approved by the Executive Director, the Communications and Marketing Coordinator, or their

designate, will obtain a second signature on the cheque from a Council member with pre-approved signing authority.

30. The cheque is then sent out for payment. Use of Credit (Visa) 31. The SIA has an RBC Royal Bank Business Visa that is used for online office purchases, small

transactions, event expenses, and other smaller purchases. 32. The Visa card is kept in the accounting office at SIA in a lockable cabinet, all staff have access to the

Visa, however; it is only used for pre-authorized purchases. 33. Visa receipts are collected by the Communications and Marketing Coordinator, or their designate, and

coded into Simply Accounting via the A/P sub-ledger. 34. The Visa reconciliation occurs monthly when the statement is received. Debit Card 35. The Institute has a Bank of Montreal (BMO) debit card for the BMO bank account, however; it is only

used to view the account on-line in order to check balances and to print statements. The BMO debit card is kept in the accounting office at SIA in a lockable cabinet, all staff have access to the BMO debit card, but it cannot be used for purchases.

Petty Cash 36. The SIA office does not use Petty Cash. PST/GST 37. The Communications and Marketing Coordinator, or their designate, will ensure that all invoices and

receipts processed capture the amount of PST/GST paid. The Bookkeeper will complete the GST form for payment of GST owing in February of each year.

38. The Branches do not charge GST on events.

Statement of Policy and Procedure: Assets Page 1 of 3

4.4 Assets Version: July 21, 2016







INTRODUCTION 1. Assets represent major expenditures of resources, so they need special care and attention. In addition,

management and the council have a duty to protect assets and use them effectively in carrying out the organization’s mandate. For the SIA assets include: Monetary assets (cash, investments, and accounts receivable) Fixed assets (furniture, computers, software, leasehold improvements) Promotional Inventory assets

Note: Monetary assets (cash, investments (managed by RBC Securities), and accounts receivable) are covered in Policy # 4.2 (Revenues).

PURPOSE 2. The purpose of this policy is to provide appropriate controls over the purchase, recording and disposition

of assets.

POLICY 3. All capital assets over $250.00 will be capitalized.

4. Straight-line depreciation will be used within the following timeframes:

Computers will be depreciated over 3 years.

Furniture, including desks, tables, cabinets, etc; will be depreciated over 4 years.

Lease hold improvements will be depreciated over 7 years.

5. Fixed asset purchases or leases approved in the capital budget must be authorized by the ED & Registrar.

6. Fixed asset purchases not approved in the capital budget must be approved by Council. 7. All fixed asset purchases will follow expense authorization procedures. 8. The organization shall carry insurance at replacement levels for all fixed assets. 9. Physical inventories of both fixed assets and sales inventories will be conducted at year-end and

reconciled to current records. Discrepancies will be investigated and reported to the ED & Registrar.

10. In the event of dissolution, assets will be used to meet the SIA’s financial obligations and any residual assets will be disposed of as directed by Council.


DEFINITIONS 11. See Definitions. RESPONSIBILITY 12. It is the responsibility of the Provincial Council to approve the capital budget for the coming year and to

assure itself that capital costs are being managed and controlled effectively. 13. It is the responsibility of the ED & Registrar, to ensure that expenses are authorized appropriately,

consistent with the intent of the capital budget, and that appropriate internal controls are established over asset purchases.

14. It is the responsibility of the ED & Registrar, to ensure that appropriate insurance coverage and security

measures are in place to protect the organization’s major assets. 15. It is the responsibility of the Communications and Marketing Coordinator, or their designate to perform an

inventory and reconciliation of assets and promotional inventory annually.

Procedures

CAPITAL PURCHASES

1. Authorization for any capital asset purchase must be approved in advance.

2. Staff will determine if additional insurance is required, and obtain that insurance if necessary.

ASSET RECORDS 3. The following information will be recorded for each fixed asset.

Description

Date acquired

Value at acquisition

Accumulated amortization,

Date of disposition

Details, including proceeds, of disposition.

4. At year-end, the Communications and Marketing Coordinator, or their designate, will conduct a physical

inventory and investigate any discrepancies that arise. Results will be provided to the Bookkeeper, who

will adjust the inventory to reflect the actual fixed assets on hand.

5. At the end of the useful life of an asset, the asset may be sold, disposed of, or given away. The difference

between the amortized value of the asset and the proceeds of the disposition will be booked as a gain or

loss.

INVENTORY 6. At least once annually, and usually at year-end, the Communications and Marketing Coordinator, or their

designate, will perform a reconciliation of promotional inventory to sales records for each product.


7. Differences between the physical count and the opening inventory will be investigated by the

Communications and Marketing Coordinator or their designate, with results reported to the ED & Registrar.

Statement of Policy and Procedure: Cash Management Page 1 of 2

4.5 Cash Management Version: July 21, 2016




Applies to: Councillors, Branch Executives, Executive Director and office staff


Enforced by: Executive Director and Registrar

Replaces Version: N/A

INTRODUCTION 1. Cash is critical to any organization and it is vital to ensure that it is managed responsibly and available

when required. PURPOSE 2. The purpose of this policy is to provide guidance on the treatment of the cash balances of the SIA as well

as ensure there are appropriate controls for handling cash.

POLICY 3. The SIA will have a minimum of two signing authorities for cheques, the ED & Registrar, and one of two

council members, as appointed by council. 4. The Institute will have two investment funds as follows:

A restricted investment reserve fund, to hold funds to deal with legal challenges.

A non-restricted fund to hold general surpluses from operation of the Institute. 5. Investment of the legal fund is reviewed by the external auditor. 6. Interest from the investment funds is a budget revenue line for operations.

DEFINITIONS 7. See Definitions. RESPONSIBILITY 8. It is the responsibility of Council to set guidelines for targets for cash balances and investments, reflecting

prudent stewardship of member funds.

Statement of Policy and Procedure: Cash Management Page 2 of 2

9. It is the responsibility of the ED & Registrar to manage cash and investments according to guidelines set by the Council and to ensure that regular reconciliations of bank balances and bank deposits are carried out, that inventory and accounts receivable levels are monitored, and that investments and cash balances are reviewed monthly.

Procedures

ACCOUNTS RECEIVABLE 1. The Institute accepts credit, debit, cheques, or money orders as payment methods. 2. All SIA staff can accept payments, including credit card payments over the phone. 3. Beanstream Internet Commerce Inc® is used as the merchant account for the SIA. The bulk of revenue is

received through this account. 4. The SIA office handles most of the registration for most of the Branch events. Revenue received is

provided back to the Branches, minus merchant service charges. 5. When cash is collected, it is deposited on a weekly basis by the ED & Registrar, or their designate. 6. The Institute does not use petty cash.

BANKING 7. For credit card and debit card payments, the Communications and Marketing Coordinator and/or

Bookkeeper will reconcile the amount deposited in the bank account to “Beanstream” reports. “Beanstream” is a third party electronic payment processing service. The revenue transaction is then recorded in Simply Accounting.

8. Cheque payments are recorded into Simply Accounting once a bank deposit has been made.

9. The Communications and Marketing Coordinator, or their designate, will prepare the bank deposits on a weekly basis. Deposits are reviewed by the bookkeeper during the monthly reconciliation.

10. Bank deposits are done once a week by the ED & Registrar or Communications and Marketing Coordinator or their designate. Cheque payments are recorded into Simply Accounting once a bank deposit has been made.

11. Deposits consist mainly of cheques. Cash is rarely deposited as SIA received cash on a limited few occasions (branch events and student affiliate memberships). (Note: Branch executives do handle some cash from events)

INVESTMENT RESERVE FUND 12. The investment reserve fund is invested by RBC Securities, which is a member of the Canadian

Securities Administrators, under the direction of the ED & Registrar and reviewed by the external auditor.

13. Interest from the fund is part of the annual budget as a revenue item for operations.

Statement of Policy and Procedure: Audit Page 1 of 2

4.6 Audit Version: July 21, 2016




Applies to: Councillors, Branch Executives, ED & Registrar



INTRODUCTION 1. Ensuring that an external audit is performed is a critical responsibility of the Executive Committee of the

SIA in their role as the Finance & Audit Committee for Council. The Executive Committee is responsible for overseeing the audit process while staff, under the direction of the ED & Registrar is responsible to ensure that auditors have access to all of the information that they require in a timely fashion.

PURPOSE 2. The purpose of this policy is to ensure the annual audit is supported by Council and conducted effectively

and efficiently. The responsibilities of Council, in their oversight role, are outlined in the Policy and Procedures of the Finance and Audit Committee under Governance.

POLICY 3. The SIA will provide all needed support to ensure that the annual external audit is conducted effectively,

and efficiently, and in a transparent manner.


RESPONSIBILITY 5. It is the responsibility of the Provincial Council, through the Executive Committee, to provide oversight to

the audit and the auditor’s performance, and to ensure that expectations of the auditors and staff are clear.

6. It is the responsibility of the ED & Registrar and his/her staff to support the Executive Committee where

needed and to support the auditors in their work.

Statement of Policy and Procedure: Audit Page 2 of 2

Procedures

PRE-AUDIT PREPARATION 1. A representative of the Executive Committee, the ED & Registrar, and lead staff from the Institute that will

support the field work of the audit, will meet with the auditor approximately 2 to 4 weeks prior to the audit to discuss the audit process. Items reviewed will include:

Timeline for the audit including time frame for document review, field work, review by the ED & Registrar, review by the Executive Committee, and finalization and approval of the audit by Council.

Standard document requests and timelines to provide them.

Any special requests for the audit from the Provincial Council (this may or may not be in-camera). 2. Highlights of the pre-audit meeting should be a component of the engagement letter from the audit firm to

management. 3. The Communications & Marketing Coordinator, with support from the bookkeeper and other staff, will

prepare the documents for the auditor as specified, and any additional documentation that is requested in the course of the audit process.

AUDIT

4. Work space and access to all files are to be provided to the auditors during their field visit.

5. All reasonable effort will be made by staff to respond to the auditors request for information in a professional and timely fashion.

DRAFT AUDIT

6. The ED & Registrar and staff will review the draft statements for accuracy and work with the auditors to correct any apparent deficiencies.

7. Once management has approved the draft statements, a final draft will be prepared for presentation to the Provincial Council for review and approval.

POST-AUDIT

8. On approval of the audit report by Council, the auditor will send the finalized audit statements (amended if necessary) for distribution to members, along with a management letter.

9. The audited statements are sent to all members by email a minimum of 14 days in advance of the Annual General Meeting.

10. The summarized statements are presented at the AGM by the Treasurer of Council.

Documents

Policy and Procedures Manual - sia.sk.ca 4 Financial... · Chapter 4 Financial Management ... off and filed with other receivables, ... 7. For any membership related revenues other