Financial Policies and Procedures

RELATIONSHIP TO BY-LAWS

These financial policies and procedures shall be implemented at all times consistently with the society’s by-laws.

 

FISCAL YEAR

The fiscal year of the society is April1 through March 30.

           

BUDGET

I. Budget Calendar. The budget year shall be the same as the fiscal year of the society.

II. Budget Format. The budget shall be in a format substantially consistent with the society budget format.

III. Budget Process.

A. Presentation of Budget. The Managing Director shall present a general annual budget for the operation of the society to the board of directors for action no later than the March board meeting each year.

B. Board action. The board of directors will receive the report and recommendation of the Managing Director and adopt a budget based thereon.

IV. Administration of Budget. Written documentation of expenses shall be provided to the society’s administrative office for payment of budgeted expenses. Expenses not anticipated and approved by the budget (either in type or amount) shall be referred to the board for review and direction as to payment.

 

BANK ACCOUNTS

I. Creation. The society shall maintain such bank accounts and investments as consistent with the society’s investment policy and as authorized by the board of directors from time to time.

A. Signature Authority. The following individuals have signatory authority on Hoi Philoi bank accounts: The Chairman, The Managing Director, The Treasurer.

III. Signature Requirements. The society has authority to issue cheque up to and including any amount. For any cheque that are greater than Rs. 50,000, the Office Bearers must review the documentation and approve payment in writing before the cheque is issued.

IV. Transfer of Funds. No funds shall be transferred by the society to or from investment accounts without approval of the board of directors.

 

RECEIPTS

I. General. All society receipts for deposit shall be sent to the bank for handling. In the event the Treasurer receives receipts for deposit, they shall be sending to the bank for deposit into the society’s bank account.

II. Recognition of Income. Revenue will be recognized over the period to which it relates. Such amounts earned, but not received, will be reported as receivables. Such amounts received, but not earned, will be reported as deferred revenue. Membership fees are non-refundable and shall be recognized as income upon receipt. Revenue restricted by donor or other outside parties will be reported as an increase in unrestricted net assets if a restriction expires in the year in which the revenue is recognized. All other restricted revenue will be reports as an increase in temporarily restricted net assets.

III. Accounts Receivable. All receivables shall be treated as fully collectible. Accordingly, no allowance for doubtful accounts is required. If accounts become uncollectible, they will be charged to operations when that determination is made.

IV. Cheque. All cheque shall be restrictively endorsed immediately upon receipt by the Treasurer or the Management Company with the notation, “For Deposit Only, [Bank Name], [Account Number].” Copies will be made of all cheque received and they, together with any corresponding invoices to which they pertain, will be maintained by the society.

V. Cash. All receipts of cash will be accompanied by the issuance of a cash receipt by the society or any of its agents in a position to accept cash. The cash receipts shall be sequentially numbered and indicate the amount received, the purpose of the receipt, and be signed by the individual who received the cash on behalf of the society. The society shall maintain control of the cash receipts book at all times.

VI. Deposits. All funds received for deposit by the society shall be promptly recorded and deposited into the society’s bank account within a week of receipt. Deposits shall be made intact and cash shall not be returned back upon deposit.

 

DISBURSEMENTS

I. Disbursements. Except as approved by the board of directors pertaining to cash, all disbursements shall be made by pre-numbered cheque.

II. Cash Disbursement Vouchers. Documentation shall be prepared for each invoice or request for reimbursement that details the date of the cheque, cheque number, payee, amount of cheque, and description of expense account(s) to be charged. Invoices or accompanying receipts will be attached as backup to the cheque stub.

III. Chequebook. The society shall maintain cheque-book. Signatories to the society bank account shall be the Chairman, the Managing Director and the Treasurer. All individuals with signatory authority must be authorized by appropriate resolution of the board of directors.

IV. Cheque Preparation and Issuance. The society shall be responsible for preparing and processing all cheques to vendors. The society employee responsible for preparation and processing of cheques shall not have signature authority over the cheque account. Cheques shall be send promptly upon signature and after all authorizations are received.

V. Disbursement Authorization. The signatories are authorized to make payments from the operating account for expenses within the approved budget up to and including Rs. 1,00,000. Payments for unbudgeted expenses and payments for budgeted expenses above Rs. 1,00,000 must be authorized in writing by the board of directors.

VI. Expense Verification. Before signing any cheque, all cheque signatories shall review invoices and supporting documentation to verify that it is a legitimate expense of the society. The society shall verify vendor invoices for accuracy in quantities ordered and received, prices charged, and overall clerical accuracy. All paid invoices and supporting documentation shall be stamped “paid” to avoid duplicate payment and shall include the date of payment and number and amount of the cheque. Invoices from unfamiliar or unusual vendors shall be reviewed and approved by the Treasurer before payment.

VII. Expense Reimbursements. Requests for reimbursement of expenses incurred by society officers, directors or members on behalf of the society shall be checked for mathematical accuracy and reasonableness before approval. All requests for reimbursement shall be supported by receipts or other appropriate documentation and shall include a statement of the purpose for which the expense was incurred.

VIII. Voided Cheques. Voided cheques shall be defaced and kept on file.

IX. Prepaid Expenses. Expenses related to meetings and conferences to be held in future periods will be classified as prepaid expenses and will be recognized as expenses in the period during which the meeting or conference occurs.

X. Unpaid Invoices: Unpaid invoices shall be maintained in an unpaid invoice file.

 

BOOKS AND RECORDS; FINANCIAL REPORTING

I. Chart of Accounts. The society’s financial reporting will be consistent with a Chart of Accounts attached as necessary.

II. General. The society shall create and maintain all financial books and records. All such books and records shall be open to review by the Treasurer, other members of the board, and other authorized agents of the society at all times.

III. Monthly Financial Reports. On a monthly basis as soon as practicable after receipt of the monthly bank account statement and reconciliation of the internal financial records to the bank account statement, the society shall provide to the Treasurer the following reports, who shall, in turn, promptly report in writing on the state of the society’s finances to the board:

A. A Statement of Activities showing monthly financial activity and reflecting beginning account balances, a detailed list of all cleared cheques and other debits, a detailed list of all cleared deposits and other credits, ending account balances, a detailed list of all outstanding but uncleared debit or credit transactions, and ending book balances. In addition, the monthly Statement of Activities shall report year-to-date financial activity and show variances compared to the annual budget. The Treasurer shall, after reviewing the same, cause the monthly Statement of Activities to be forwarded to all officers and directors of the society to be considered as part of the agenda of the next meeting of the board.

B. A copy of the monthly bank statement reflecting all cheque account and other account activity, and any other monthly statements pertaining to the deposit or investment of society funds.

C. Documentation shall be maintained of all cheques or other documents resulting in the debit of funds from any society financial account. Documentation shall be maintained of all deposits or transfers of funds into any society financial account. The Treasurer shall be provided with all information relating to deposits and debits on a monthly basis accompanying the monthly bank reconciliation.

D. A Reconciliation Detail report showing the reconciliation between the cheque register and the monthly bank statement.

IV. Annual Financial Reports. On an annual basis as soon as practicable after receipt of the monthly bank account statement for the twelfth month of the fiscal year, the society shall provide to the Treasurer the following reports:

A. Annual Profit and Loss Statement showing income and expenses by budget category;

B. End of Year Balance Sheet showing all society assets and liabilities as of the last day of the fiscal year; and the Treasurer or Managing Director shall cause copies of all annual financial reports to be provided promptly to all members of the board.

V. Publication of Annual Financial Reports. Annual financial reports of the society shall be made available to any member who requests the same.

VI. Other Financial Reports. The society shall provide financial reports of all member meetings, including preliminary budgets and interim and final reports of income and expenses.

 

 

CONTRACTS AND FINANCIAL COMMITMENTS

I. Board Authority. No employee, agent, independent contractor or other representative of the society shall bind the society to any contract involving a financial commitment of the society except upon the authorization of the board of directors, recorded in the minutes.

II. Signed Contracts. All written contracts between the society and any vendor or other provider of goods or services to the society or its membership shall be signed on behalf of the society by its Chairman or the Managing Director.

 

AUDIT COMMITTEE AND ANNUAL FINANCIAL REVIEWS

I. Audit Committee. The board as a whole shall act as an Internal Audit Committee to fulfill its oversight responsibilities with respect to the audit of the society’s books and financial records and ensure a system of internal controls that the society has established. The board shall annually hire an independent external auditor to audit the financial records.

II. Internal Audit Committee Responsibilities. The Audit Committee’s responsibilities may include:

A. Acting as liaison to the society’s external auditor.

B. Selection and review of the independent external auditor and review of the annual fees to be paid for services rendered by the external auditor and each proposed audit plan developed by management and the external auditor.

C. Review with the independent external auditor of the society’s annual financial statements and reports.

D. Review and evaluation of the management letter (if any) received from the independent external auditor and discussion of recommendations for any changes necessary to remedy problems identified in the letter.

E. At the completion of the audit, review the audit fieldwork process with the auditor. Obtain an understanding of the auditor’s evaluation of management and whether the auditor encountered any difficulties or had any disagreements with management during the audit. Review all journal entries proposed by the auditors.

F. Interact with management to implement and monitor the internal control structure and to take steps to insure that the possible risks of fraud or embezzlement are mitigated.

G. Ensure that tax filings are completed timely.

H. Understand the society’s internal controls and have policies in place to update them as needed.

I. Periodically review the society’s insurance coverage and determine its adequacy.

J. Make recommendations necessary to improve the society’s efficiency and/or remedy problems identified by the committee or others.

K. Identify and monitor related party transactions and review the conflict of interest, ethics and related party disclosure policies periodically and update as needed.

L. Monitor any legal matters that could impact the financial health and reporting of the society.

M. Institute and oversee any special investigatory work as needed.

III. Access to Records. The society shall cooperate by providing the outside auditor access to such books and records of the society as are necessary to carry out the audit function.

 

DOCUMENT RETENTION AND DESTRUCTION POLICY

This Document Retention and Destruction Policy of Hoi Philoi identify the record retention responsibilities of members of the Board of Directors, and administrative and service providers for maintaining and documenting the storage and destruction of Hoi Philoi documents and records.

I. Rules. Board of Directors, and administrative and accounting service providers are required to honor these rules: (a) paper or electronic documents indicated under the terms for retention below will be transferred and maintained by the Managing Director or its equivalents; (b) all other paper documents may be destroyed after three years; (c) all other electronic documents may be deleted from all individual computers, data bases, networks, and back-up storage after one year; and (d) no paper or electronic documents will be destroyed or deleted if pertinent to any ongoing or anticipated government investigation or proceeding or private litigation.

II. Terms for retention.

A. To be retained permanently: Governance records – Charter and amendments, Bylaws, other society documents, governing board and board committee minutes. Tax records – Filed tax returns/reports and supporting records, tax exemption determination letter and related correspondence, files related to tax audits. Intellectual property records – Copyright and trademark registrations and samples of protected works. Financial records – Audited financial statements, attorney contingent liability letters.

B. To be retained for three years: Lease, insurance, and contract/license records – Software license agreements; vendor, hotel, and service agreements; independent contractor agreements; employment agreements; consultant agreements; and all other agreements (retain during the term of the agreement and for three years after the termination, expiration or non-renewal of each agreement). Correspondence files, past budgets, bank statements, publications, employee manuals/policies and procedures, survey information.

C. To be retained for one year: All other electronic records, documents and files.

III. Exceptions. Exceptions to these rules and terms for retention may be granted only by the board of directors.

 

CONFLICTS OF INTEREST

Officers and staff of the society shall not have any personal or business interest that may conflict with their responsibilities to the society. In the event any matter comes before the board of directors for action concerning which an officer or staff or any member of an officer or staff’s family has a personal or business interest, the officer or staff shall fully disclose the same and shall not participate in any consideration of or decision related to the matter.

 

AMENDMENTS

Hoi Philoi financial policies and procedures are subjected to change but only with the approval of the board of directors.

 

 

 

 

 

(K. J. LALBIAKNGHETA)                                               (EMANUEL LALHRIATZUALA RALTE)

                 MD                                                                                             Chairman