Policies & Guidance

Income Statement Formatting (Budget to Actuals)

These procedures are to be followed in furtherance of the Financial Controls Policy approved by the Board.

The Board of Directors will execute their responsibilities as defined in the Purpose and Authority Sections of the Financial Controls Policy.

The Finance Committee, with input from the Treasurer and the Executive Director, will provide financial oversight of the organization and provide recommendations to the Board of Directors on financial matters.

The Executive Director will direct and exercise her or his responsibilities to manage the day to day financial management of the organization as authorized by the Financial Controls Policy.   

Financial Management and Oversight

The Board of Directors will consider and review all reports submitted to them by the Finance Committee, the Treasurer, and the Executive Director.

The Finance Committee will:

  • Approve and review bi-annual planning process, including assumptions made by the Board, Finance Committee, and the Executive Director.

  • Approve an annual budget to be forwarded to the Board, which is the roadmap for the Executive Director to follow.

  • Provide ongoing financial oversight, including budget-to-actual performance, investment performance, reserve analysis, banking and investment relationships, and other financial matters with input from the Treasurer and the Executive Director.

  • Provide monthly review of organization’s financial statements with the Treasurer and the Executive Director and before the statements go to the Board of Directors.  

  • Bring forward key indicators for Board review and consideration in consultation with the Treasurer and the Executive Director.

  • Review and participate all activities that affect the financial picture of the LWV MN.

  • Review all financial proposals and contracts with the Treasurer and the Executive Director each month before the proposal or contracts goes to the Board of Directors. 

The Executive Director will:

  • Report the financial results of the organizations operations to the Finance Committee and the Board on a monthly basis, listing reasons for variances. The standard set of financial reports prepared monthly includes:

    • Balance Sheet as of the last calendar day of the month;

    • Income & Expense Statement for the period beginning with the first day of the current fiscal year through the last calendar day of the month;

    • Budget to Actual Report for the period beginning with the first day of the current fiscal year through the last calendar day of month;

    • Reconciliation Reports from QuickBooks;

    • Bank Statements for the Main Bank Account and the Local League’s Bank Account;

    • Investment Statements for the Investment account and Legacy account.

  • Report Donor Income

    • Review all donor income over $5,000 with the Treasurer to ensure that such income is booked appropriately;

    • Ensure that all donor restricted income is accounted for separately from general operating funds;

    • Ensure that all donor restrictions are clearly defined;

    • Ensure that all donor restricted funds are used per defined restrictions.

  • Ensure General Financial Practice Activity

    • Ensure that all monthly obligations are paid per policy or contract;

    • Ensure that all required financial reports are filed per policy or contract;

    • Ensure that vendor accounts are maintained per policy or contract.

  • Solicit Bids for Services

    • Ensure that all potential service contracts in excess of $15,000 are put out for competitive bids;

    • Follow the Contract Selection Process

      • Selection shall be based on cost, service, and other elements defined in the proposal;

      • Selection of bid may be based on any or all of the elements defined in and as submitted in the proposal;

      • The lowest bid is not required to be the main criteria for the selection of the bidder’s proposal.

  •  Enforce Internal Controls

    • Ensure no advancement of funds is provided for employees, officers or directors;

    • Ensure that all employee expenses are reimbursed per policy;

    • Receive, process, and disburse funds under controls that are sufficient to maintain basic segregation of duties to protect bank accounts, income receipts, and payments.

The Treasurer will:

  • Review and authorize all expense reimbursements from the Executive Director;

  • Review and sign-off on all bank account reconciliations on a monthly basis;

  • Review the payroll registers of the organization on a monthly basis;

  • Present a financial report to the Board on a monthly basis;

  • Review any/all financial reports or practices as deemed necessary.

The responsibilities outlined in this section of the procedures are not intended to be the entirety of the responsibilities for each of the roles described.

FINANCIAL AUDIT AND REVIEW PROCEDURES

The Board will:

  • Conduct and review a certified audit or review from a Certified Public Accounting (CPA) firm every three to five (5) years or more frequently as deemed necessary;

  • Direct the Finance Committee to request for proposals from a Certified Public Accounting (CPA) firm to conduct a professional audit or review and oversee the audit or review;

  • Review the Form 990 annually.

The Finance Committee will:

  • Gather and review all submitted proposals, conduct interviews of the CPA Firm with the Executive Director and Treasurer, request staff input  and participation, and make a recommendation to the Board of the CPA firm being recommended;

    • Ensure the scope of the audit and/or review is defined by a letter of engagement;

    • Direct the CPA firm that the audit or review will  include, but not be limited to:

      • Board review;

      • Preparation of annual financial statements;

      • Preparation of nonprofit Form 990.

  • Review, and if necessary correct, the Form 990 before submitting it to the Board for their review.

The Executive Director will participate in the financial audit or review as she or he is directed and as she or he sees fit.

BUDGET PROCEDURE 

The Board of Directors will:

  • Review and comment on the operating and capital budgets presented by the Executive Directors as recommended by the Finance Committee;

  • Recommend for approval at Convention, the biennial operating and capital budgets.

The Finance Committee will: 

  • Review and comment on the operating and capital budgets presented by the Executive Director;

  • Work with the Executive Director to finalize the draft budgets for presentation to the Board and the members at the biennial Convention;

  • Provide a recommendation to the Board for approval of the draft budget.

Executive Director will:

  • Work with the Finance Committee to identify budget goals, targets, projected revenue, expenses, deficits, and use of investment funds;

  • Develop a preliminary capital and operating budget;

  • Submit this budget to the Finance Committee in accordance with the organizations calendar;

  • Present any budget amendments to the Finance Committee for approval when underlying budget assumptions have changed. 

ASSET PROTECTION PROCEDURES

So that the assets of LWVMN are adequately protected and maintained, the Executive Director will:

  • Obtain Insurance, in consultation with appropriate professional resources and the Finance Committee and Treasurer, to obtain an adequate level of insurance to protect the organization, staff, directors, officers, volunteers and property including:

    • General Liability

    • Professional Liability

    • Directors and Officers Liability

    • Property

  • Develop a Property Maintenance Plan with the Finance Committee and Treasurer’s input that will address the protection and maintenance of the organization’s property and equipment;

  • Develop and assure compliance with procedures with the Finance Committee and Treasurer’s input that will protect intellectual property, information, and files from unauthorized access, tampering, loss, or significant damage;

  • Develop and assure compliance with the Finance Committee and the Treasurer’s input on procedures that would expose the organization, the Board, or its staff to claims of liability;

  • Avoid, personally, any actions that would expose the organization, the Board or staff to claims of liability. 

FINANCIAL TRANSACTIONS WITH INSIDERS

In compliance with the Financial Controls Policy, the Board, Finance Committee, and the Executive Director will act with prudence to ensure that no advances of funds to employees, officers, and/or directors are authorized.

REVIEW OF FINANCIAL CONTROL PROCEDURES

The Financial Control Procedures will be reviewed and revised if necessary annually by the Finance Committee with input from the Treasurer and Executive Director.

 

Policy approved/adopted: December 16, 2019