Fiscal control policy

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Revision as of 06:50, 28 November 2013 by James Hare (talk | contribs) (→‎ARTICLE II - BUDGETING: Recasting—we do not necessarily want a lame duck Board to adopt the budget)
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ARTICLE I - PURPOSE

1. Purpose. The purpose of this policy is to ensure that Wikimedia District of Columbia manages its financial resources in a manner consistent with law and best practices for U.S. nonprofit organizations.

ARTICLE II - BUDGETING

1. Drafting and Initial Approval. Thirty days prior to the beginning of a fiscal year, the Treasurer shall prepare a draft budget. The budget represents a good faith projection of the revenues, expenses, and cash balances for the fiscal year. At or before the beginning of the new fiscal year, the Board of Directors shall review the draft and recommend a budget for the approval by the members.

2. Budgetary Gaps. In the event a new fiscal year begins and no budget has been approved by the members, spending shall continue at levels authorized by the last approved budget. Best efforts shall be made to reconcile such expenditures with the new budget once one is adopted.

ARTICLE III - FUNDS AND EXPENDITURES

1. Bank Accounts. Wikimedia District of Columbia shall maintain a checking account at Wells Fargo Bank, constituting the general treasury of the Corporation. The President and the Treasurer may open or cause to be opened such additional accounts as may be necessary to comply with donation agreements the Corporation may enter into, provided that such accounts are reported to the Board of Directors. All bank accounts shall be held in the name of the Corporation, using the Corporation's Employer Identification Number, and shall list only the President and the Treasurer as account signers.

2. Authorization of Expenditures. Expenditures shall only be authorized by the President or through a resolution of the Board of Directors, subject to the restrictions established by the Bylaws and the Delegation of Authority Policy.

3. Disbursement of Expenditures. Following the authorization of an expenditure, its disbursement shall take place through one of the following ways:

(a) Small Disbursements. The President may carry out disbursements of under $100 without approval of the Treasurer, provided that such expenditure is authorized by the budget. All disbursements made directly by the President shall be reported promptly to the Treasurer with appropriate documentation.
(b) Disbursement by Treasurer. For disbursements of $100 or greater, the Treasurer shall within seven business days carry out the disbursement, provide written or oral authorization to the President to carry out the disbursement at his or her own discretion, or object to the disbursement. The Treasurer may object to a disbursement if it would constitute an improper use of funds or would jeopardize the financial well-being of the Corporation.
(c) Disbursement in the Absence of the Treasurer. Should the Treasurer fail to take any action in seven business days, the President is authorized to carry out the disbursement at his or her own discretion. Disbursements carried out under this authority shall be promptly reported to the Board of Directors with appropriate documentation. If the Treasurer anticipates that he or she will be unavailable to render decisions regarding disbursements for an extended period of time, he or she is encouraged to inform the Board of Directors of such absence and to allow for the appointment of a temporary replacement.

4. Payment Instruments. The President and the Treasurer shall each be granted a debit card and online banking account, and shall receive access to the Corporation's check stock and online merchant accounts. The President and the Treasurer shall keep payment instruments secure and prevent their misuse. Cash or other payment instruments shall not be used except where subsequently authorized by the Board of Directors.

5. Related Policies. The procedures for expense reimbursement and grant disbursement are documented in the Expense Reimbursement Policy and the Grants Policy respectively.

ARTICLE IV - DONATIONS

1. Processing Receipts. The Treasurer shall be responsible for processing the receipt of cash and other payments, for depositing payments and gifts into the appropriate bank account, and for providing receipts for transactions. Officers other than the Treasurer who receive payments on behalf of the Corporation shall remit such payment to the Treasurer for processing.

2. Recognition of Donations. For donations of $25 or above, the Treasurer shall prepare a letter acknowledging the donation, as well as any restrictions or conditions placed on the donation. The letter may be sent electronically.

3. Restrictions. Restrictions or conditions placed on a donation shall be noted in the Corporation's financial records. In the event that the Corporation cannot adhere to a stipulated restriction, the donation shall be returned. In the event the donor's intent is unclear or communicated orally, the Treasurer shall request written confirmation regarding the donor's intent. The nature of the restriction, including its being lifted altogether, may be altered only with the donor's written permission.

4. Solicitations. All solicitation documents shall accurately report on the tax deductibility status of donations made to the Corporation. Should a specific program of the Corporation be mentioned in such solicitations, donations resulting from these solicitations shall be restricted toward the use of the mentioned program unless the donor agrees to waive such restriction or if the solicitation includes an explicit disclaimer that donations will not be restricted.

5. Cash. Precise records shall be kept of cash received and disbursed in the course of operations. Cash received shall be promptly deposited into the Corporation's bank account.

ARTICLE V - ACCOUNTING

1. Accounting Standards. The Treasurer shall maintain financial records that are consistent with the United States Generally Accepted Accounting Principles (U.S. GAAP), particularly with respects to FASB 116 and 117.

2. Chart of Accounts. The Treasurer shall maintain a chart of accounts consistent with the line items designated in the budget.

3. Accrual Basis. The Treasurer shall recognize revenues upon their being pledged, regardless of the timing of the receipt of cash. The Treasurer shall recognize expenses upon their being incurred, regardless of the timing of the expenditure of cash. Invoices and similar documents are sufficient to demonstrate the accrual of revenues and expenses under this policy.

4. Monthly Reporting. Each month, the Treasurer shall submit a report to the Board of Directors. This report shall include revenues and expenses relative to the budget, as well as the balance sheet of the Corporation.

5. Capital Depreciation. At the end of each fiscal year, the Treasurer shall calculate depreciation for the Corporation's fixed assets. Depreciation for a fixed asset shall accrue over a five-year period and be calculated using the straight-line depreciation method unless the Treasurer determines in his or her discretion that an alternative period or calculation method is appropriate for a specific asset or category of assets. All depreciation calculations shall be included in the annual financial report of the Corporation.

6. Closing of Books. On the last day of the fiscal year, the Treasurer shall close the books and report the revenue and expenses for the fiscal year.

7. Documentation. The Treasurer shall store documentation regarding the Corporation's finances on a secure server, such that the Board of Directors and the Audit Committee may access the documents as necessary. Physical documents shall be stored in a location known to the Board of Directors and be digitized promptly.

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