Iowa Department of Agriculture and Land Stewardship
Soil and Water Conservation Districts
Financial Policies
The District shall adopt procedures policies for:
- Petty Cash
- Disbursements
- Receipts
- Payroll
Financial policies are the rules and procedures that address how financial transactions should be handled in your organization. Consistent application of these policies will help minimize opportunities for fraud, waste, and abuse to occur. These controls also help to ensure that funds are being used for the intended purpose. Lastly, having controls in place demonstrates to potential grantors that your organization has safeguards in place to properly manage funds.
Financial policies should address segregation of duties to ensure that no one person is responsible for all of the action items addressed in a policy. In small organizations it is sometimes difficult to completely segregate duties, but every effort should be made to use checks and balances for all financial transactions.
The Commissioners should review and approve policies annually. This approval and a copy of the approved policies should be noted in the meeting minutes. The board should appoint at least one board member as the Treasurer, and one member as the Co-Treasurer, with knowledge of finance or accounting to help establish policies, controls, and review financial statements.
The Division will provide examples of financial policies for the District to use as needed.
Secretaries will provide support to the Commissioners in compliance with the approved District policies, provided said policies do not contradict IDALS’ policies, procedures, and work directives applicable to State Secretaries.
Iowa Department of Agriculture and Land Stewardship
Soil and Water Conservation Districts
Petty Cash
The limit for the District’s petty cash fund shall be $50.
Petty cash funds should be kept in a locked location, such as a cash box or locked drawer.
The State Secretary shall be the custodian of the petty cash fund and be responsible for documenting withdrawals from the fund.
Each withdrawal from the fund should be recorded in a log with the following information:
- Employee name
- Date of the transaction
- General description of the transaction
Use of a log will help track disbursements and provide information for recording transactions and reconciling the account. The employee requesting disbursement from the petty cash fund will be responsible for providing a receipt for the actual cost of the expense.
The Treasurer or Co-Treasurer shall reconcile the Petty Cash fund once per month. Reconciliation should include a review to ensure receipts have been provided for all disbursements, expenses appear reasonable and in compliance with petty cash policy, and make a recommendation to the board on the amount needed to replenish the fund. A check should be written and approved at the monthly district meeting to replenish the fund.
Eligible uses of the fund include small unexpected expenses, such as meeting or office supplies.
Petty cash funds shall not be used as a check cashing fund or for travel expenses which should be turned in on a travel voucher form.
Iowa Department of Agriculture and Land Stewardship
Soil and Water Conservation Districts
Disbursements
This policy should detail how the District handles disbursement of funds, to include the management of accounts, withdrawal of funds, and access to check books. It should clearly identify who does each action item in the process.
The disbursement policy should establish a process for approving payments. Authorization should be required by someone other than the check signer.
The State Secretary is not allowed to act as District Treasurer or Co-Treasurer or as signatory for any district account.
Limit and identify who has the authority to sign checks.
Consider not having the person who prepares your financial statements being a signatory for any district account.
The policy should set a limit of access for the signatory to the primary checking account. The limit should not exceed $500 per check. Checks written in excess of the established limit will require the signature of both the Treasurer and the Co-Treasurer.
Use pre-numbered checks and require documentation supporting the payment. Maintain supporting documentation for a sufficient period of time (i.e. five years).
The check book shall be maintained in a locked cabinet. Pre-signed checks should not be used.
No checks should be written for Cash.
Keep records of all voided checks.
Keep records sufficient to document all payments made by the District. Ensure records include a valid invoice. For an invoice to be valid it should include the vendor name and address, date of service, an itemization of goods or service provided, and amount due.
It is a good idea to have the bank statement mailed to someone other than the Treasurer. If this is not possible, at a minimum, the bank statement must be reviewed and signed off by the Co-Treasurer.
Require employees who travel to submit a travel voucher for reimbursement of costs. Ensure documentation is provided to properly document travel expenses. For mileage, provide a printed MapQuest or other type of proof for actual mileage driven. Itemized receipts should be provided for all meal, lodging, or other miscellaneous travel expenses.
Details of each expenditure and amountsshall be included in the approved meeting minutes.
Supporting documentation should be initialed and dated by the Treasurer or Co-Treasurer who reviewed it so that it cannot be used again for future disbursements.
Iowa Department of Agriculture and Land Stewardship
Soil and Water Conservation Districts
Receipts
This policy should detail how the District handles receipt of funds coming in to the organization. The policy should ensure that a record is maintained of funds being received and that funds are promptly deposited into the District account.
Use a pre-numbered receipt book for all money that is received. This should include cash and checks. A duplicate copy should be maintained for accounting records. This receipt book should also be used as an initial listing of any money received in the mail. The receipt book should be regularly reconciled to the bank deposit by the Treasurer or Co-Treasurer.
All checks should be restrictively endorsed “For Deposit Only” upon receipt.
Deposit all funds in the bank in a timely basis. How often the District deposits funds should be determined by the board based on the amount of funds received and the frequency of receipt of funds.
Funds should be maintained in a secure locked location until deposited.
Funds should be paid to the District in this order of preference: EFT, check, cash.
Where possible, ask people not to pay the District using cash.
Iowa Department of Agriculture and Land Stewardship
Soil and Water Conservation Districts
Payroll
This policy should establish controls to ensure that payments are only made to authorized employees, with proper authorization, for the correct amount, and comply with federal and state requirements.
Specify that only the board may authorize the hiring or firing of an employee.
Require that the board approve all pay rate increases at a monthly District meeting and record this approval in the meeting minutes.
Establish that the District has policies for overtime, sick leave, vacation, holiday time, and all other leave. Maintain an accounting of leave balances for each employee.
Require written timesheets to be completed and signed by employees. Employees who are charged to multiple funding sources (i.e. grant or contract) should be directed to track their time by funding source.
Timesheets should be signed and approved by a commissioner. All leave should be properly approved by a commissioner. The timesheet should properly document hours worked and leave taken.
Make sure to segregate duties so that the approval of timesheets, recordkeeping, tax payments, and payment to the payroll processing company are not all the responsibility of one person.
The invoice from the payroll company should be reconciled with the timesheet to ensure the District is only being charged for the actual hours claimed by employees.
The Board should receive a copy of all payroll tax filings to ensure that they are being filed in a timely manner. The Board should reconcile the reports to the payroll journals to ensure that the amount remitted to the Federal and State government match the amount withheld.
Utilize the SWCD Commissioner Employer Handbook to assist with personnel policies.