INTERNAL CONTROLS POLICY
Internal control is a system of checks and balances that keeps any one person from having complete control over a financial transaction. Proper internal control is crucial, not only to help protect the organization against theft, fraud, and loss due to unethical or illegal behavior, but also to inspire confidence in donors, regulators, and others.
The Board of Directors is responsible for authorizing all bank accounts and check signers. Financial institutions where Garnet Lake Conservation Association (herein referred to as GLCA) accounts are maintained are notified on an annual basis of any changes in check signers, following the transition of officers or changes in staff with check signing responsibilities. This is the joint responsibility of the President and Treasurer.
Financial reports shall be presented to the Board of Directors for review on a quarterly basis. The Treasurer will prepare an annual financial compilation. An annual review and audit will be conducted by a member of GLCA appointed by the Board.
Applicable financial and administrative guidelines relating to specific grant funding shall be followed.
2. BANK STATEMENTS and RECONCILIATIONS
The Treasurer and the Board President will have access to the “on-line” bank information and will download and print the statements monthly for all accounts. All passwords will be kept secured.
The Treasurer will perform an account reconciliation monthly and maintain records of such. Quarterly, the Treasurer will report to the BODs account balances, income, expenses and number of members in good standing.
All checks must be accounted for. Checks outstanding over 90 days must be periodically investigated, with payment stopped and an entry made restoring such items to cash if appropriate.
3. ANNUAL BUDGET
The Budget is a crucial tool for ongoing financial control. The Treasurer will prepare a draft for discussion with the Board prior to the June Board meeting, with the input and requests of Committee chairs. The final budget will be presented for approval to the Board by the end of the fiscal year and to the GLCA membership at its annual meeting.
The Treasurer will provide an annual financial report to the Board of Directors at its regularly scheduled board meeting and prior to the annual membership meeting. The annual financial report will consist of an income and expense vs. previous year and budget, financial position and net asset reports and will be reviewed by the Board to compare actual expenses and receipts to the budget. Significant departures from the budget will be noted in the report, along with other financially related results and trends of interest to the Board.
4. CASH and CHECK RECEIPTS
Cash and Check receipts must be deposited within 7 days of receipt. Incoming checks must be restrictively endorsed, “for deposit only” with the organization’s name, when received.
Incoming cash must be counted and receipts/bank deposits developed by two persons authorized to perform these functions with records of cash received totaled and initialized by authorized persons. Cash collection documentation totals must be compared and reconciled to bank deposit receipts on a regular basis. Bank deposit receipts for cash must be compared and attached to the original bank deposit slips. Adequate physical controls must be maintained over cash receipts from the time of receipt to deposit in the bank.
Contributions and grants received in bank accounts electronically via Electronic Funds Transfer (EFT) will be posted to accounts within 3 days of receipt.
5. CASH DISBURSEMENTS
a. Spending Authority
Authority to spend over budget is subject to Board approval. The Board must approve in advance any expense that is not in the budget.
b. Check Authorization
The Board of Directors must provide approval for all disbursements not previously identified and approved in the annual budget. Supporting documentation must accompany checks when presented for signature.
All non-recurring disbursements must be made by check. Recurring disbursements may be set up electronically with vendor via Electronic Funds Transfer with prior GLCA President approval.
Signing of blank checks is strictly prohibited. Checks must be made payable to specific payees based upon appropriate documentation; and never to “cash” or “bearer”. Prior to preparing checks, receiving reports should be compared to vendor invoices for accuracy. Checks must be prepared from vendor invoices only and not from a vendor statement.
Dual signature approvals are required for all checks over $1000, including any of two of the following: president, vice president, secretary, treasurer, GLCA director. Access to blank checks must be limited to persons authorized to prepare checks. Any voided/spoiled checks must be marked “Void”, shredded with the signature portion removed and retained in a secure place.
d. Use of Credit Card and Other Credit Accounts
Credit Cards and other Credit accounts are not authorized at this time for GLCA.
6. TRAVEL AND EXPENSES
GLCA Board Members and Directors must submit a detailed expense record, with supporting documentation, in order to be reimbursed for expenses. The Board of Directors must preapprove travel expenses.