Whitman-Hanson Regional School District
MANUAL OF FINANCIAL PROCEDURES
SuperintendentDr. Ruth Gilbert-Whitner
Director of Business ServicesChristine Suckow
Business Services Staff
Christine Suckow781-618-7417Director of Business Services
Mary Jo Lipson781-618-7426Staff Accountant
Elizabeth Kimball781-618-7426Payroll Specialist
Karen Kailher781-618-7405Accounts Payable Specialist
Julia Phillips781-618-7416Accounts Payable Specialist
Table of Contents
Part I
Summary of Internal Control Polices and Law 1
- Compliance with Laws 1
- Security of Financial Records and Data 3
- Property Management Guidelines 5
- Procurement Guidelines 6
- Travel Guidelines 7
- Consultants and Contractors 8
Part II
Internal Control Procedures 10
- General Accounting Procedures 10
- Cash Management Procedures 12
- Grant Receivable Procedures 18
- Payroll Procedures 22
- Property and Equipment Procedures 38
- Accounts Payable Procedures 42
- Management Reporting Procedures 54
- Anti-Fraud Response Procedures 56
Appendix A
General Policy on Facilities Use…………………………………………...……………61
Appendix B
General Policy on Gifts
Procedures for Handling Gifts 71
Appendix C
General Policy on Student Activates 72
Part I
SUMMARY OF INTERNAL CONTROL POLICIES AND LAWS
INTRODUCTION
Internal control policies provide the Whitman-Hanson Regional School District with the foundation to safeguard its assets properly, implement the School Committee’s policies, provide compliance with state and federal laws and regulations, and produce timely and accurate financial information.
1.COMPLIANCE WITH LAWS
The Whitman-Hanson Regional School District will follow all of the relevant laws and regulations that govern the school districts within the Commonwealth of Massachusetts. Additionally, any Federal Government laws and regulations that relate to grant funding will be adopted as the grant funding is received. The following are specific policies and procedures of the Whitman-Hanson Regional School District.
1.1. Record Keeping
1.To provide an accurate and auditable record of all financial transactions, the Whitman-Hanson Regional School District’s records and accounts are maintained in conformity with generally accepted accounting principals as required by the Commonwealth’s statutes applicable to school districts.
2.Further, the Whitman-Hanson Regional School District specifically requires that:
a.No funds or accounts may be established or maintained for purposes that are not fully and accurately described within the records of the Whitman-Hanson Regional School District.
b.Receipts and disbursements must be fully and accurately described in the records.
c.No false entries may be made in the records.
d.No false or misleading reports shall be issued.
e.Payments may be made only to the contracting party and only for the actual services rendered or products delivered.
f.No false or fictitious invoices may be submitted or paid.
1.2. Organizational Conflict of Interest or Self-Dealing (Related Parties)
The Whitman-Hanson Regional School District will follow MGL, Chapter 268A conflict of interest law and disclosure. Additionally, it may not be operated for the benefit of an affiliated or unaffiliated organization or an individual in his or her own private capacity or individuals related to the Whitman-Hanson Regional School District or members of its management, unless the private benefit is considered merely incidental. This private benefit preclusion will extend to the following:
1.Sale or exchange, or leasing, of property between the district and an affiliated or unaffiliated organization or a private or related individual.
2.Lending of money or other extension of credit between an agency and an affiliated or unaffiliated organization or a private or related individual.
3.Furnishing of goods, services, or facilities between the district and an affiliated or unaffiliated organization or a private or related individual except for the rental of district facilities as specified in the Whitman-Hanson School Committee Policy Manual.
4.Payment of compensation, unless authorized by the Whitman-Hanson School Committee, by the district to an affiliated or unaffiliated organization or a private or related individual.
5.Transfer to, use by, or for the benefit of a private or related individual of the income or assets of the Whitman-Hanson Regional School District unless specifically voted by the Whitman-Hanson School Committee.
Thus, the Whitman-Hanson Regional School District will be guided by the principle of arms-length standards with all affiliated or unaffiliated organizations or with a private or related individual(s). Related party transactions shall include transactions between a school / district and members of the Whitman-Hanson School Committee, administration, employees, related individuals and affiliated companies. Related individuals within the scope of this definition include spouses, parents, and children, spouses of children, grandchildren, siblings, father-in-law, mother-in-law, sister-in-law, and brother-in-law of a School Committee member or school district employee.
1.3. Political Contributions
No funds or assets of the Whitman-Hanson Regional School District may be contributed to any political party or organization or to any individual who either holds public office or is a candidate for public office. The direct or indirect use of any funds or other assets of the Whitman-Hanson Regional School District for political contributions in any form, whether in cash or other property, services, or the use of facilities, is strictly prohibited. The Whitman-Hanson Regional School District cannot be involved with any committee or other organization that raises funds for political purposes.
1.The following are examples of prohibited activities include the following:
a.Contributions by an employee that are reimbursed through expense accounts or in other ways.
b.Purchase by the school district of tickets for political fundraising events.
c.Contributions in kind, such as lending employees to political parties or using the assets of the Whitman-Hanson Regional School District in political campaigns.
2. SECURITY OF FINANCIAL RECORDS AND DATA
2.1. Security of Financial Data
1.The district’s accounting software should be reviewed regularly to ensure that only properly authorized individuals, utilizing a security password, can access or modify data.
2.The district’s financial data must be backed up daily to ensure the recoverability of financial information in case or hardware failure. Such back-up shall be stored in a fire-safe area that is properly secured.
3.The Payroll Specialist shall keep unclaimed paychecks and unclaimed pay statements in a secure location.
4.The Superintendent of Schools or the Superintendent’s designee shall secure all other financial data.
2.2. Security of School Documents
Originals of the following district documents are maintained and their presence is verified on a periodic basis.
1.Minutes of School Committee Meetings
2.Agreements
3.Leases
4.Insurance Policies
5.Vendor Invoices
6.Grant and Contract Agreements
7.Fixed Asset Inventory List
2.3. Record Retention and Disposal
1.Records are maintained for the following indicated minimum periods:
a.Records, documents, and other supporting evidence including paid, cancelled or voided checks, accounts payable records, vendors’ invoices, payroll sheets and registers of salaries and wages, employees’ time cards and other public documents are retained for seven years after the original entry date.
2.The following records supporting Federal contracts, as required by the U. S. Office of Management and Budget are retained for the indicated minimum periods:
a.For three years after submission of the final report of expenditures, all financial records including spreadsheets, salary information, invoices submitted and paid, and any other pertinent information, with the following exceptions:
i. If any litigation, claim, or audit is started before the expiration of the three year period, the records shall be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken.
ii. Records of equipment acquired with Federal funds shall be retained for three years after final disposition.
b.Permanently: Audit reports, annual district reports, School Committee minutes, tax and legal correspondence, labor contracts, insurance claims and policies, and retirement / pension records.
3.The disposal date determined under this procedure is the end of the fiscal year, or the date of final payment of government grants.
4.All records not supporting government grants or otherwise covered by rules of the Internal Revenue Service are retained for three years from the end of the fiscal year in which the records were originally prepared.
5.All financial records are maintained, by category, in chronological order and fiscal year.
3. PROPERTY MANAGEMENT GUIDELINES
3.1. Use of School Assets
No employee may use any of the School property, equipment, material or supplies for personal use without the prior approval of the Superintendent.
3.2. Use of School Credit Cards
There will be no school credit cards permitted.
3.3. Property and Equipment
The Whitman-Hanson Regional School District maintains detailed records and tags all government-furnished property and equipment, with an identification and segregation of property and equipment acquired through government grants.
3.4. Identification of Property
Lists of grant-purchased materials shall be kept in databases kept by the technology department.
3.5. Record and Report of Property
1.The Whitman-Hanson Regional School Districtmaintains records for every item of property purchased for $5,000 or more as follows:
a.Name and description
b.Serial number, model number, or other identification
c.If title vests with any entity other than the school district, specific information relative to which specific entity
d.Location and condition of the equipment
e.Ultimate disposition data, including date of disposal, sales price, or method of disposal.
3.6. Physical Inventories
1. The Whitman-Hanson Regional School District performs a physical inventory of all property valued in excess of $5,000 per unit on an annual basis.
2. The physical inventory records include each such asset, its identification number, its location, and a brief description of its condition.
3. The physical inventory is reconciled to the detailed fixed asset list. Any differences are investigated and reconciled.
3.7. Disposal of Property and Equipment
1.No item of property or equipment shall be removed from the premises without the prior approval of the Superintendent.
2.As previously approved by the Whitman-Hanson School Committee, textbooks and materials, which are outdated or in poor condition may be discarded at the discretion of the building principal.
3.Any other items of value no longer needed by the school district shall be disposed of only after a vote by the Whitman-Hanson School Committee if the item is worth less than $500 and by the Board of Selectmen if the residual value is in excess of $500 per unit.
4.If equipment is no longer needed by the school district, such equipment shall first be offered to other town departments.
5.If items are not useful to other town departments, the Facilities manager shall arrange for its disposal and shall ensure that any revenues obtained for the equipment shall be returned to the Town’s general fund unless other arrangements have been previously made at Town Meeting.
6.If items are disposed of, appropriate adjustments shall be made of the physical inventory list.
4. PROCUREMENT GUIDELINES
4.1. TheWhitman-Hanson Regional School District procures only those items and services that are required to perform and mission and/or fill a bona fide need. Procurements are made using best value contracting, which includes assessing the best value considering quality, performance, and price.
4.2. MGL, Chapter 30B is required to be followed.
4.3. The district adheres to the following objectives:
1.Procurement will be completely impartial based strictly on the merits of the supplier and contractor proposals and applicable related considerations such as delivery, quantity, etc.
2.Make all purchases in the best interests of the district and its funding sources.
3.Obtain quality supplies / services needed for delivery at the time and place required.
4.Buy from responsible sources of supply.
5.Obtain maximum value for all expenditures.
6.Deal fairly and impartially with all vendors.
7.Maintain dependable sources of supply.
8.Be above suspicion of unethical behavior at all times; avoid any conflict of interest, related parties or even the appearance of a conflict of interest in the school district supplier relationships.
4.4. The district will execute a purchase order for all purchases.
The appropriate building principal or administrator and the Director of Business Services must approve such purchase order. Purchase orders greater than $500 must also be approved by the Superintendent.
4.5. All lease agreements will be evidenced by a signed agreement identifying all of the terms and conditions of the lease. All lease agreements must be approved by the Chief Procurement Officer of the Whitman-Hanson Regional School District.
4.6 Any real estate agreement to rent or sell will require a beneficial interest disclosure as required in MGL Chapter 7, section 40J.
5. TRAVEL GUIDELINES
5.1 Employee Mileage Reimbursement
1.All employees are reimbursed at the standard mileage rate per mile as determined by the Internal Revenue Service for use of their own vehicle for business related travel or at the rate per mile negotiated through the collective bargaining process. In addition, parking fees and tolls paid are reimbursable if supported by receipts.
2.All employees requesting such mileage reimbursement are required to furnish an expense reimbursement form containing the destination of each trip, its purpose, and the miles driven,
3.Receipts for any parking fees or tolls paid must be attached to the travel report.
4.Reimbursement requests must be made within the fiscal year during which the expenses were incurred. Failure to submit reimbursement requests prior to the close of a given fiscal year will result in no reimbursement.
6. CONSULTANTS AND CONTRACTORS
6.1. Consultant Utilization
The utilization of all consultants and contract personnel are sufficiently evidenced by the following:
1.Details of all agreements (e.g., work requirements, rate of compensation, and nature and amount of other expenses, if any), with the individuals or organizations providing the services and details of actual services performed.
2.Invoices or billings submitted by consultants, including sufficient detail as to the time expended and the nature of the actual services performed.
3.The use of a management contract for educational and administrative services will clearly identify the contractor’s performance requirements, including student’s academic achievement, contractor’s compensation, and the district’s rights to educational curricula and intellectual property developed.
6.2 Independent Contractors
The use of consultants is closely monitored so as not to vary from the rules of the Internal Revenue Code. In particular, consultants will:
1.Not be controlled as to what services will be performed and how these services will be performed. Consultants will not have set hours of work.
2.Adhere to a precise contract scope of services, recomputed or at least adjusted annually. This consultant agreement will specify the obligation of the consultant to pay his or her own self-employment taxes, if applicable.
3.Not receive any fringe benefits as such, although their fee may include provision for fringe benefits.
4.Not be assigned a permanent workstation.
5.Make their services available or work for a number of firms or persons at the same time.
6.Use their own stationery or time card in billing for services.
Part II
INTERNAL CONTROL PROCEDURES
INTRODUCTION
The following section of the Guide will provide procedures, which will support the policies and laws referenced in Part I of the Guide.
1. GENERAL ACCOUNTING PROCEDURES
1.1. In this section, procedures are described for the overall accounting system design, accounting activity, and closeout of the accounts at year-end.
1.2. Overall Accounting System Design
1.Control Objective
To establish a coding structure that supports financial reporting and decision-making.
2.Major Controls
a.The Director of Business Services for Whitman-Hanson Regional School Districtis responsible for thedesigning the Chart of Accounts / Coding Structure.
b.To support the decision making, the Director of Business Services for Whitman-Hanson Regional School District shall be involved in ensuring that DOE guidelines, as updated July 1, 2001, are used for recording and reporting purposes using the district’s software.
1.3. General Accounting Activity
1.Control Objective
To ensure that all accounting entries are current, accurate, and complete.
2.Major Controls
a.Timeliness of Entries
All entries are made soon after the underlying accounting event to ensure the financial record and reporting are accurate.
b.Support Documentation
All entries are supported by adequate documentation that clearly shows the justification and authorization for the transaction.
c.Audit Trail
A complete paper trail should be kept so that the auditors will be able to reconstruct and/or justify all entries.
3.Procedures
a.Financial data on source documentation is verified against original documents (e.g., invoice, purchase order, etc.) by the Director of Business Services for Whitman-Hanson Regional School District before entering into the software system.
b.Each entry in the accounting software is reviewed and approved by the Director of Business Services for Whitman-Hanson Regional School District.
c.Non-recurring entries, such as for correcting entries, are prepared as circumstances warrant. Documentation shall be attached to all such correcting entries.
1.4. Account Reconciliation and Close-out
- Control Objective
To ensure the accuracy of financial records and reports.
2.Major Controls
Reconciliation of All Accounts and Sub-accounts
3.Procedures
a.Reconciliation of Whitman-Hanson Regional School District’ records are completed by the Director of Business Services.
b.The Director of Business Services for Whitman-Hanson Regional School District shall reconcile all accounts and sub-accounts, or shall ensure that all such sub-accounts are reconciled on a monthly basis.
c.At fiscal year end and after the annual audit, all accounts are closed out and the balances of revolving funds and grants are agreed to the audited financial statements.
2. CASH MANAGEMENT PROCEDURES
2.1. In this section, procedures are described for cash receipts.
2.2. Cash Receipts
1.Control Objective