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More About This Title Model Policies and Procedures for Not-for-Profit Organizations, Fourth Edition
English
In the challenging world of not-for-profit management, executives are held responsible for virtually every aspect of their organization's activities, such as legal issues, marketing, lobbying, editorial, membership operations, budgeting, and, of course, finance. For one person to be an authority in every area, however, is virtually impossible.
Completely revised and expanded, the Fourth Edition of this invaluable tool is useful as a guide to nonprofit accountants, financial managers, and executives new to the area of financial management. Addressing the accounting, internal control, and office administration issues that confront executives in nonprofit organizations, this book:
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Helps professionals develop formal policies in accounting and finance
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Shows how to strengthen an organization's financial procedures while assuring board members that they are meeting fiduciary responsibilities
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Provides more than 200 sample policies and forms both in the book and on the accompanying Web site offering downloadable and customizable versions of those forms
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Covers major topics including accounting and financial policies, office administration policies, and internal control and risk reduction policies
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Contains dozens of new model accounting and financial policies and forms, covering Sarbanes-Oxley issues, codes of ethics, identity theft, fraud, binding arbitrations, compensation committees, new bank rules, fiduciary obligations of board members, and many more topics
Model Policies and Procedures for Not-for-Profit Organizations, Fourth Edition offers provocative strategies for financial management and serves as a road map to sound fiscal and organizational structure for nonprofit organizations.
English
Edward J. Mcmillan, CPA, CAE, is a Certified Public Accountant and Certified Association Executive, and is a nationally recognized speaker on not-for-profit financial and management topics since 1992 for the United States Chamber of Commerce, the American Society of Association Executives, the American Institute of Certified Public Accountants, the American Chamber of Commerce Executives, and the International Association of Convention and Visitor Bureaus. He has written six books, and is also the author of numerous articles, which have appeared in such publications as Association Management, Leadership, and Dollars and Cents.
English
List of Forms xvii
About the Author xxi
Preface xxiii
Section 1 Internal Financial Statement Formats 1
Statement of Financial Position 2
Consolidated Statement of Unrestricted Activities 4
Statement of Unrestricted Activities by Function 5
Statement of Temporarily Restricted Activities 6
Statement of Permanently Restricted Activities 6
Statement of Changes in Net Assets 6
Section 2 Chart of Accounts 7
Chart of Accounts Issuance Form 8
Assets 9
Clearing Accounts 12
Liabilities 13
Net Assets 14
Revenues 15
Expenses 18
Functions 22
Section 3 The Policies and Procedures Manual 23
Important Note: The sample policies and procedures found in Section 3 (Parts 1 through 6) are also available in MS Word format on a Web site designed for this book:
Part 1 Accounting and Financial Policies 25
Accounting and Financial Interns 25
Accounting Computer File Back-Up Procedure 26
Accounting Information Releases 28
Accounting Method 28
Accounts Payable Accruals 29
Accounts Receivable Write-Off Procedures and Authority (Bad Debts Procedures) 29
Amortization 31
Annual Leave Accrual 32
Board-Designated Funds 32
Budget 33
Budget and Finance Committee 33
Cancellation of Purchase Order 34
Capitalization Cutoff Points 36
Chart of Accounts 36
Check Imprinter Machine 38
Check Preparation and Mailing 38
Clearing Accounts 38
Collection Procedures 39
Contributions 41
CPA Firms: Audited Financial Statements 41
CPA Firms: The Engagement Letter 44
CPA Firms: The Management Letter 44
CPA Firms: Selection of Firm 47
CPA Firms: Use of Other Firms 47
Credit Card Receipts 48
Date and Time Received Stamp 48
Deferred Revenues 49
Deposit of Receipts 49
Depreciation 50
Discounts Lost 50
Discounts on Accounts Receivable 51
Donated Property 51
Endowment Funds 53
Expense Reimbursements—Chief Staff Executive 53
Finance Department Employee Orientation 54
Financial Statement Preparation and Distribution 54
Grants and Contracts 55
Holding Funds for Other Organizations 55
Inventory: Give-Aways 55
Inventory: Receiving 57
Inventory Valuations 57
Inventory: Write-Off 58
Investment Policy 60
IRS Forms: Form 990-T 62
IRS Forms: Form 1099 62
Journal Entries 64
Leasehold Improvements 66
Leases 66
Loans/Lines of Credit 67
Lobbying Expenditures 67
Long-Term Debt 67
Monthly Budget Meetings 68
Nondeductibility of Dues 68
Nondistribution of Earnings 69
Nonsuffi cient Funds Checks 69
Occupancy Expenses 71
Optional Proxy Tax 71
Overhead Allocation 72
PAID Stamp 72
Payment Terms 73
Permanently Restricted Net Assets 75
Permanent Travel Advances 75
Petty Cash Fund Disbursements 77
Photocopying Expenses 80
Postage Log 82
Prepaid Expenses 84
Purchase Orders 84
Quid Pro Quo Contributions 87
Records Retention 87
Refunds 93
Reimbursement of Board/Committee Expenses 93
Rent 94
Repairs and Improvements 94
Reserves 95
Return Policy 95
Salaries and Fringe Benefits Accruals 95
Sales Tax Collection 96
Sales Tax Exemption Certificate 96
Serial Numbers (Fixed Assets) 96
Spousal Travel 97
Telephone Expenses 97
Temporarily Restricted Net Assets 100
Travel Advances 100
Travel Expenses 102
Unrelated Business Income Tax (UBIT) 107
Unrestricted Net Assets 107
Voided Checks 108
Write-Off of Old Checks 110
Part 2 Office Administration Policies 113
Absenteeism and Tardiness 113
Affinity Programs 113
Age Discrimination in Employee Act (ADEA) 114
Alcohol and Controlled Substances 114
Amendments to Policies and Procedures 115
Americans with Disabilities Act 115
Anniversary Date 116
Annual Leave Payments 116
Antitrust 116
Antivirus 117
Aptitude/Ability Tests 117
At-Will Employment 117
Background Checks—Prospective Employees 118
Ballots 120
Bartering Prohibited 120
Bereavement (Funeral) Leave 120
Bid Requirements 121
Binding Arbitration 123
Board of Director Fiduciary Responsibilities 124
Bulletin Boards 126
Business Cards 126
By-Laws 126
Certificate of Authority 126
Committee Meeting Attendance 128
Committee Meeting Attendance by Members 128
Computer Passwords 128
Conditions of Employment Agreement 129
Confidentiality of Information 132
Consolidated Omnibus Budget Reconciliation Act (COBRA) 135
Consumer Protection Act 135
Contract Signing Authority 135
Correspondence 136
Credit Rating Release 138
Data Processing Manual 138
Disciplinary Action 138
Discrimination 139
Diversity 139
Document Shredding 140
Document Sign-Out Form 140
Dress Code 142
E-Mail and Internet 142
Emergency Contact Form 145
Employee Retirement Income Security Act (ERISA) 147
Equal Opportunity Employer 147
Equal Pay Act 147
Evaluations (Staff) 148
Executive Sessions 148
Exit Interview 148
Facilities 149
Fair Labor Standards Act (FLSA) 149
Family and Medical Leave Act (FMLA) 151
Fax Machine 151
Federal Identification Number 152
Fire Protection 152
Form I-9/Immigration Reform and Control Act (IRCA) 152
Forms Manual/Retired Forms Manual 153
Form W-4 154
Fringe Benefits 154
Fringe Benefits Day 155
Garnishments 155
Grievances and Complaints 155
Hold Harmless Agreements 156
Holidays 158
Hours of Operation 158
Inclement Weather 158
Independent Contractor Files 159
Independent Contractors 159
Injuries/Worker’s Compensation 163
Job Descriptions 165
Jury Duty 165
Key Employee Insurance 165
Key Employees 166
Leave without Pay 168
Leaving the Office 168
Legal Audit 168
Legal Counsel Attendance at Board Meetings 169
Legal Protection for Board and Staff 170
Libel/Slander 172
Lines of Credit 172
Loans—Employees 174
Lobbying Activities/Omnibus Budget Reconciliation Act (OBRA) 174
Lobbying Disclosure Act (LDA) 174
Logo 175
Mailing List Sales 175
Management Day 176
Mandatory Vacations/Leave 178
Maternity Leave 178
Military Obligations 178
Minutes of Board and Committees 179
Music 179
Music Licensing 179
Nepotism 180
Nicknames 180
Noncompete Agreements 180
Occupational Safety and Health Act (OSHA) 183
Office Decor 183
Office Equipment 183
Office Supplies 185
Open Board of Directors Meetings (Sunshine Laws) 185
Outside Employment 185
Ownership of Records 186
Paternity Leave 186
Permissions/Waivers 186
Personal Leave 188
Personnel Records 188
Plagiarism 188
Policy Amendment, Deletion, or Additions 190
Political Action Committees (PACs) 192
Political Education Funds 192
Postal Permit 193
Press Releases/Media Contacts 193
Protection of Member/Contributor/Customer/Employee Confidential Information 195
Quarterly Staff Meetings 195
Reasonable Accommodation 196
Reference Letters 196
References (Former and Current Employees) 196
Registered Agent 197
Reinstatement of Benefits 197
Remote Access to Computer Network 197
Resignation 199
Rest Periods 199
Safe and Safe Combination 199
Safe Deposit Box 202
Safety Committee 205
Sexual Harassment 207
Smoking 207
Software Licenses (Anti-Piracy) 207
Staff Conduct 208
Staff Contact by Board Members 208
Staff Training 208
Statutory (Legally Mandated) Employee Benefits 209
Suggestions 209
Taking Work Home 211
Tellers’ Committee 213
Temporary Employment Agencies 213
Time Off to Vote 215
Time Sheets 215
Trademark 217
Unemployment Compensation 217
Uniformed Services Employment and Reemployment Rights Act (USERRA) 217
Use of Premises 218
Utilization of Office Equipment 221
Vacancies 223
Voice Mail 223
Worker’s Compensation Insurance 223
Weapons 224
Wrongful Dismissal (Avoidance) 224
Year-End Manual 224
Part 3 Internal Control and Risk Reduction Policies 227
Acronyms 227
Approved Vendor Listing 229
Automobile Insurance 231
Bank Account Reconciliations 231
Bank Statement Mailings 232
Bonding Eligibility 233
Business Interruption Insurance 233
Cash Register Issues 233
Cash Transactions 234
Certificate of Insurance 235
Changeover Audit 235
Check 21 Issues 235
Check Disbursements 236
Check and Wire Transfer Signatures 239
Check Signers 239
Check Stock 240
Check Supply 241
Control Over Checks and Cash 241
Convention Cancellation Insurance 242
Credit Cards 242
Credit Card Statements 246
Deposit Security and Restrictive Endorsements 246
Direct Deposit 247
Documenting a Fraud Action Plan 248
Employee Credit Cards (Elimination) 251
Errors and Omissions Insurance 251
Fidelity Bond (Employee Dishonesty Insurance) 252
General Liability Insurance 252
Ghost Employees 252
Ghost Vendors 254
Gifts 256
Insurance 259
Insurance Committees 259
Inventory Issues 260
Kiting 261
Lockbox 262
Malpractice Insurance 264
Manual Checks 264
Officers and Directors Liability Insurance 264
Payroll Processing 265
Payroll Tax Issues 265
Positive Pay 266
Professional Liability Insurance 266
Property Insurance 267
Segregation of Duties 267
Statement of Auditing Standard No. 99 (SAS99) 267
Two Signature Checks 268
Umbrella Insurance 268
Unannounced Bank Statement Reconciliation 268
Window of Opportunity for Embezzlement 269
Wire Transfers 273
Part 4 Disclosure of Information Policies 275
Disclosure of Information 275
Disclosure of Records, General Public, Requests Made in Person 279
Disclosure of Records, General Public, Requests Made in Writing 279
Disclosure of Records, Members or Contributors, Requests Made in Writing 280
Disclosure of Records, Members or Contributors, Requests Made in Person 280
Board of Directors’ Examination of Records 280
Form 990-T 281
Part 5 The Sarbanes-Oxley Act of 2002 283
The Sarbanes-Oxley Act of 2002 283
Code of Ethics for Financial Management 284
Rotation of the Independent CPA Firm Partner 286
Whistle-Blower Protection 286
Internal Audit Committee 287
Certification of Financial Statements 288
Conflict of Interest Form 290
Summary 292
Part 6 State Issues 293
State Issues 293
Access to Accounting Records 293
Committee Meeting Attendance 293
Disclosure of Forms Filed with State 294
Executive Sessions 294
Loans 294
Minutes 294
Open Meetings 294
Posting Meetings 294
Registration as Fundraiser 295
Registered Agent 295
Personnel Files 295
Glossary of Accounting and Financial Terminology 297
Index 303
