Early Learning Coalition
of North Florida, Inc.
Accounting and Financial Policies and Procedures Manual
TABLE OF CONTENTS
Introduction / 9
Chapter 1 – GENERAL POLICIES
F101 / Coalition Structure / 11-12
The Role of the Board of Directors
Committee Structure
Executive/Administrative Committee Responsibilities
The Roles of the C.E.O. and Staff
F102 / Accounting Department Overview / 13-14
The Coalition
Responsibilities
Standards for Financial Management Systems
F103 / Internal Controls / 15-17
Policy
Definitions
Procedure
F106 / Suspected Misconduct / 18-22
Introduction
Definitions
Reporting Responsibilities
Whistleblower Protection
Investigative Responsibilities
Protection of Records – Federal Matters
Disciplinary Action
Confidentiality
Disclosure to Outside Parties
F107 / Security / 23-24
Accounting Department
Access to Electronically Stored Accounting Data
Storage of Back-up Files
Storage of Sensitive Data
Destruction of Consumer Information
General Office Security
F109 / General Ledger and Chart of Accounts / 25-28
Chart of Accounts Overview
Distribution of Chart of Accounts
Control of Chart of Accounts
Account Definitions
Fiscal Year of the Coalition
Journal Entries
CHAPTER 2 – REVENUES AND CASH RECEIPTS
F201 / Revenue / 30-31
Revenue Recognition Policies
Definitions
F202 / Administration of Grants and Federal Awards / 32-34
Definitions
Preparation and Review of Proposals
Post-Award Procedures
Compliance with Laws, Regulations and Provisions of
Awards
Close Out of Federal Awards
F203 / Administration of Other Funding Sources / 35-36
Overview
Documentation of Donations
Reconciliation of Donations
Staff Training
F203.1 / Matching (In-Kind) and Cost Sharing / 37-40
Overview
Valuation and Accounting Treatment
Procedures for Handling In-Kind Donations
Procedures for Recording In-Kind Donations
Coalition Matching Requirements and Guidelines
F204 / Contributions Received / 41-42
Overview
Distinguishing Contributions from Exchange Transactions
Receipts and Disclosures
F205 / Billing/Invoicing Policies / 43-45
Overview
Responsibilities for Billing and Collection
Billing and Financial Reporting
Accounts Receivable Entry Policies
Classification of Income and Net Assets
F206 / Cash Receipts and Segregation of Duties / 46-47
Overview
Segregation of Duties
Processing of Checks and Cash Received in the Mail
Endorsement of Checks
Processing of Online Donations (received via PayPal)
Timeliness of Bank Deposits
Reconciliation of Deposits
F207 / Accounts Receivable Management / 48-48
Monitoring and Reconciliations
Credits and Other Adjustments to Accounts Receivable
Accounts Receivable Write-Off Authorization Procedures
CHAPTER 3 – EXPENDITURES AND DISBURSEMENTS
F301 / Purchasing Policies and Procedures / 50-53
Overview
Responsibility for Purchasing
Prior Approval Guidance
Non-Discrimination Policy
Procurement Procedures
Thresholds for Procurement Requirements
Purchasing Authorization Levels
Purchase or Lease Decision
Non-Competitive/Sole Source Procurement
Affirmative Consideration of Minority, Small Business, and
Women-Owned Businesses
Availability of Procurement Records
Vendor Files and Required Documentation
Receipt and Acceptance of Goods
F302 / Political Intervention / 54-54
Prohibited Expenditures
Endorsements of Candidates
Prohibited Use of the Coalition Assets and Resources
F303 / Lobbying / 55-56
Introduction
Definition of Lobbying Activities
Segregation of Lobbying Expenditures
Lobbying Election
F304 / Charging of Costs to Federal Awards / 57-59
Overview
Segregating Unallowable from Allowable Costs
Criteria for Allowability
Direct Costs
Indirect and Joint Costs
Cost Pools
Accounting for Specific Elements of Cost
F305 / Accounts Payable Management / 60-63
Overview
Recording of Accounts Payable
Accounts Payable Cut-Off
Establishment of Control Devices
Preparation of a Voucher Package for Payment
Processing of Voucher Packages for Payment
Payment Discounts
Employee Expense Reports
Reconciliation of A/P Subsidiary Ledger to General Ledger
Management of Accounts Payable Vendor Master File
Verification of New Vendors
F306 / Travel and Business Expenses / 64-66
Travel Approval
Travel Advances
Employee and Director Business Travel
Reasonableness of Travel Costs
Special Rules Pertaining to Air Travel
Spouse/Partner Travel
F307 / Cash Disbursement (Check-Writing) Policies / 67-68
Check Preparation
Check Signing
Mailing of Checks
Voided Checks and Stop Payments
Record Keeping Associated with Independent Contractors
Check Holding
F308 / Credit Cards / 69-70
Issuance of Corporate Credit Cards
Cardholder Responsibilities
Secure and Safe Custody of Corporate Credit Cards
Revocation of Corporate Credit Cards
Employee Credit Cards
F309 / Payroll and Related Policies / 71-76
Classification of Workers as Independent Contractors or
Employees
Wage Comparability Study
Payroll Administration
Changes in Payroll Data
Payroll Taxes
Personnel Activity Report (PAR’s)
Preparation of Personnel Activity Reports (PAR’s)
Processing of Personnel Activity Reports (PAR’s)
Review of Payroll
Distribution of Payroll
Internal Audit of Payroll Data
CHAPTER 4 – SPECIFIC ASSET ACCOUNTS
F401 / Cash and Cash Management / 78-80
Cash Accounts
Minimization of Cash On Hand
Authorized Signers
Bank Reconciliations
Cash Flow Management
Stale Checks
Petty Cash
Wire Transfers
Interest-Bearing Accounts
F402 / Capitalized Assets and Inventory Requirements / 81-88
Policy
CAPITALIZED ASSETS
Capitalization Threshold
Capitalized Assets – Purchased
Capitalized Assets – Contributed
Capitalized Assets – Depreciation and Useful Lives
Capitalized Assets – Changes in Estimated Useful Lives
Capitalized Assets – Repairs
Capitalized Assets – Establishment and Maintenance of a
Fixed Asset Listing
INVENTORY REQUIREMENTS
Items to be Inventoried
Inventory Procedures
Inventory Maintenance and Reporting Procedures
Inventory Maintenance and Reporting Procedures for Sub-
Recipients
CAPITALIZED ASSETS AND INVENTORY
REQUIREMENTS
Property Purchased with Federal Funds
Physical Inventory
Purchases of Shared Assets/Inventoried Property
Receipt of Newly-Purchased Property
Maintenance Procedures and Safeguards of Equipment
Transfer of Property and Property Records
Disposition of Property
Priority of Disposition
Recording and Reporting of Disposed Items
Write-Offs of Property
F403 / Prepaid Expenses / 89-89
Accounting Treatment
Procedures
F405 / Leases / 90-91
Classification of Leases
Reasonableness of Leases
Accounting for Leases
Scheduled Increases in Rent Payments
Rent Abatements and Other Lease Incentives
Changes in Lease Terms
F406 / Software Acquisition and Development Costs / 92-92
Costs to be Capitalized
Costs to be Expensed as Incurred
F407 / Web Site Costs / 93-94
Costs to be Capitalized
Costs to be Expensed as Incurred
CHAPTER 5 – LIABILITY AND NET ASSET ACCOUNTS
F501 / Accrued Liabilities / 96-96
Identification of Liabilities
Accrued Annual Leave
F502 / Net Assets / 97-98
Classification of Net Assets
Reclassifications from Restricted to Unrestricted Net Assets
Reclassifications from Unrestricted to Restricted Net Assets
Disclosures
CHAPTER 6 – FINANCIAL AND TAX REPORTING
F601 / Financial Statements / 100-101
Standard Financial Statements of the Coalition
Frequency of Preparation
Review and Distribution
Tracking Payments and Projections of Grant Funds
Monthly Closing Procedures
Annual Closing Procedures
F602 / Government Returns / 102-103
Overview
Filing of Returns
Public Access to Returns
CHAPTER 7 – FINANCIAL MANAGEMENT POLICIES
F701 / Budgeting / 105-106
Overview
Preparation and Adoption
Monitoring Performance
Budget and Program Revisions
Budget Modifications
F702 / Annual Audit / 107-109
Role of the Independent Auditor
How Often to Review the Selection of the Auditor
Selecting an Auditor
Preparation for the Annual Audit
Concluding the Audit
F703 / Cost Allocation Plan / 110-110
Policy
Procedure
Documentation
F704 / Insurance / 110-110
Overview
Insurance Definitions
F705 / Record Retention / 112-113
Policy
Permanent Files
All Other Records
Record Retention Requirements and Exceptions
Record Destruction
CHAPTER 8 – SUB-RECIPIENTS
F801 / Making of Sub-Awards / 115-115
F802 / Monitoring of Sub-Recipients / 116-117
INTRODUCTION
The following accounting manual is intended to provide an overview of the accounting policies and procedures for the Early Learning Coalition of North Florida which shall be referred to as “Coalition“ through out this manual.
Early Learning Coalition of North Florida is incorporated in the state of Florida. The Coalition is exempt from Federal income taxes under IRC (Internal Revenue Code) Section [501(c) (3)] as a nonprofit corporation. The Coalition’s tax-exempt mission is: To provide leadership to the communities of Baker, Bradford, Clay, Nassau, Putnam, and St. Johns Counties in preparing children for school by enhancing early learning programs through a seamless delivery system with a focus on nurturing our children, our families, our providers, our communities, and our future.
This manual shall document the financial operations of the Coalition. Its primary purpose is to formalize accounting policies and selected procedures for the accounting staff and to document internal controls.
The contents of this manual were approved as official policy of the Coalition by the Board of Directors, C.E.O., and the Finance Manager. All Coalition staff are bound by the policies herein, and any deviation from established policy is prohibited.
Chapter 1
GENERAL POLICIES
F101 THE COALITION STRUCTURE
Effective Date: 08/28/07
Revision Date: 03/19/08
The Role of the Board of Directors
The Coalition is governed by its Board of Directors, which is responsible for the oversight of the Coalition by:
1. Planning for the future
2. Establishing broad policies, including financial and personnel policies and procedures
3. Approving grant applications
4. Reviewing and approving the annual audit
5. Reviewing financial information
6. Identifying and proactively dealing with emerging issues
7. Interpreting the Coalition’s mission to the public
8. Soliciting prospective contributors
9. Hiring, evaluating, and working with the C.E.O.
10. Establishing and maintaining programs and systems designed to assure compliance with terms of contracts and grants
11. Authorizing establishment of all bank accounts and check signers.
The C.E.O. shall be responsible for the day-to-day oversight and management of the Coalition.
Committee Structure
The Board of Directors shall form committees in order to assist the board in fulfilling its responsibilities. These committees are responsible for the review of particular programs and providing recommendations to the full board. Standing board-level committees of the Coalition consist of the Executive/Administrative Committee.
See the Coalition’s by-laws for board and committee details. However, roles of committees with direct responsibilities for the financial affairs of the Coalition are further described in this manual. These committees shall be referred to in appropriate sections of this manual.
Executive/Administrative Committee Responsibilities
This committee shall have and exercise the authority of the Coalition between scheduled meetings of the Coalition and when a decision must be made before the next scheduled board meeting. This committee has the full empowerment of the board to make decisions on behalf of the Coalition as long as quorum is present and abide by regulations of the Sunshine Law. Actions of the Executive/Administrative Committee shall be ratified by the full board at the first meeting following the action. The committee will be comprised of the chair of the board, who shall be the committee chair, the treasurer, the secretary, and others as appointed by the chair of the committee. The chair of this committee or by the majority of the committee, may commune ad hoc committees for a specific purpose or task.
The committee is charged with the oversight of budget development, accurate tracking of expenditures, monitoring and accountability for funds, and to ensure adequate financial controls in coordination with appropriate staff and directors. The following is a list of some of the duties:
1. Review and recommendation of the Coalition’s annual budget (prepared by the Finance Manager) for final approval by the full board
2. Long-term financial planning
3. Evaluation and approval of facilities decisions (i.e., leasing, purchasing property)
4. Monitoring of actual vs. budgeted financial performance
5. Oversight of reserve funds
6. Review of financial procedures
The review of the Coalition’s financial statements shall not be limited to the Executive/Administrative Committee, but shall involve the entire Board of Directors.
The Roles of the C.E.O. and Staff
The Board of Directors hires the C.E.O., who reports directly to the board. The C.E.O. is responsible for hiring and evaluating Coalition staff. Each Coalition staff reports to the C.E.O.. The C.E.O. is responsible for managing and evaluating all employees within the Coalition.
F102 ACCOUNTING DEPARTMENT OVERVIEW
Effective Date: 08/28/07
Revision Date:
The Coalition
The accounting department consists of one staff person who manages and processes financial information for the Coalition. The following position comprises the accounting department:
· Finance Manager
Other officers and employees of the Coalition who have financial responsibilities are as follows:
· Treasurer – Board level
· Executive/Administrative Committee – Board level
· Full Board of Directors
· C.E.O.
· Office Manager
· Grants and Operations Manager
Responsibilities
The primary responsibilities of the accounting department consist of:
· Accounting and Financial Policies and Procedures
· General ledger
· Budgeting
· Cash management
· Asset management
· Grants and contracts administration
· Accounts receivable and billing
· Cash receipts
· Accounts payable
· Cash disbursements
· Payroll and benefits
· Financial statement processing
· External reporting of financial information
· Bank reconciliation
· Reconciliation of subsidiary ledgers
· Compliance with government reporting requirements
· Annual audit
· Leases
· Insurance
· Purchasing
Standards for Financial Management Systems
In accordance with OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit and the 2CFR 215 Code of Federal Regulations, Title 2, Grant agreements part 215, the Coalition maintains a financial management system that provides for the following. Specific procedures to carry out these standards are detailed in the appropriate sections of this manual.
1. Accurate, current, and complete disclosure of the financial results of each Federally-sponsored project or program in accordance with the reporting requirements of A-110 and/or the award.
2. Records that identify adequately the source and application of funds for Federally-sponsored activities. These records shall contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays, income, and interest.
3. Effective control over and accountability for all funds, property, and other assets. The Coalition shall adequately safeguard all such assets and assure they are used solely for authorized purposes.
4. Comparison of outlays with budget amounts for each award. Whenever possible, financial information shall be related to performance and unit cost data.
5. Written procedures to minimize the time elapsing between the transfer of funds to the Coalition from the U.S. Treasury and the issuance or redemption of checks, warrants, or payments by other means for program purposes by the Coalition.