Board of Directors 
Fiscal Management - Policy 4.0 
Kokua is committed to being a good steward of public resources to maintaining accurate, transparent financial records. This policy outlines the procedures Kokua uses to ensure sound financial management.
A. RESPONSIBILITY FOR FINANCIAL OVERSIGHT
The Board of Directors formulates financial policies, delegates administration of the financial policies to the Executive Director and reviews operations and activities. The Executive Director has management responsibility including financial management. The Board of Directors
B. SEPARATION OF DUTIES
Financial duties and responsibilities must be separated so that no one employee has sole control over cash receipts; disbursements; payroll; reconciliation of bank accounts; etc. A chart outlining the financial duties of individual job positions is included as Appendix A of this policy.
C. APPOINTMENT OF AN OUTSIDE ACCOUNTING FIRM
Kokua will use the services of an outside accounting firm to maintain its financial journals, provide monthly financial reports, process payroll and prepare tax reports, complete the annual Division of Developmental Disabilities Cost Report and to provide the Executive Director with such other reports as are deemed necessary for financial planning purposes.
D. INSURANCE COVERAGE
Blanket employee dishonesty coverage of at least $50,000.00 will be maintained.
E. CASH RECEIPTS
The Business Operations Coordinator will open the mail addressed to Kokua and will record all checks received in a Cash Journal. Cash receipts for the Kokua Business Account will be forwarded to the Executive Director, who will lock them in the fire proof safe until they are deposited. Cash funds received for purposes such as COBRA payments will also be recorded in the Cash Journal. A duplicate written receipt will be given to individuals who pay in cash. The duplicate receipt book will be kept with the Cash Journal.
F. DEPOSITS
All receipts should be deposited intact. No disbursements will be made from cash or check receipts prior to deposit.
All checks for deposit will be stamped ”PAY TO THE ORDER OF KOKUA” with a stamp indicating the account to which the funds are to be deposited. All deposits must be photocopied and faxed to the accountant. The original deposit slip will be stapled to the photocopy of the deposit and these will be filed in chronological order.
G. REVIEW OF CASH RECEIPTS
On a quarterly basis, entries in the Cash Journal will be cross checked with the documentation of bank deposits. This process should be done by a staff person or volunteer who does not make bank deposits.
H. CASH DISBURSEMENTS
All invoices for payment will be reviewed by the Business Operations Coordinator for accuracy, validity and appropriateness. All requests for mileage reimbursement must be reviewed and approved by the employee’s supervisor prior to being forwarded to the Business Operations Coordinator. The Business Operations Coordinator will forward the invoices to the accountant for payment. Checks prepared by the accountant may be signed by the President, Vice President or the Board Chairperson. Disbursement checks must be signed by the President, the Vice President or the Board Chairperson.
Invoices that are time sensitive may be paid by manual check at the discretion of the Executive Director. Manual checks must be written on checks with a duplicate carbon. All manual checks will be recorded on a monthly ledger. The manual check ledgers are faxed to the accountant after the end of the month.
Purchases over $250.00 must be pre-authorized by the Executive Director.
A written contract must be in place for all long-term contracted services. As designated by the Board of Directors, only the Executive Director has authority to sign contracts obligating agency funds. Consultants must complete a Personal Services Contract and submit a Form 1099. A Statement of Work, including maximum consideration, will be completed prior to the commencement of any project.
I. CHECKS
The Executive Director will store all blank agency checks and all check carbon copies in a locked fireproof safe in a locked office. Voided checks will be stapled to the check carbon.
J. PETTY CASH
A Petty Cash Fund of $50.00 or less will be kept by the Business Operations Coordinator. Petty Cash Funds should only be used for small purchases requiring cash. A monthly Petty Cash Ledger should be kept which records all disbursements. Receipts should be stapled to the Ledger. The Petty Cash Ledgers should be reconciled monthly by a Team Support Specialist. Any discrepancies should be brought to the attention of the Executive Director within three working days.
K. STAFF COMMUNITY INTEGRATION FUNDS
Checks for Community Integration (CI) Funds may be made out to “Cash” for a maximum of $20.00 (unless the staff person is accompanying a client on vacation.) All checks for CI funds must be approved in writing by the Executive Director and the person receiving the check must sign to acknowledge receipt of the check.
All cash for CI funds are to be entered on a CI Ledger. Receipts for purchases must be stapled to the ledger. To receive a replenishment of CI funds, the previous month’s ledger and receipts must be turned in to the Business Operation Coordinator. Any discrepancies should be brought to the attention of the Executive Director within three working days.
L. BANK RECONCILIATIONS
Kokua business account bank statements will be received directly by the Executive Director. The Executive Director will fax copies of the statements to the accountant who reconciles the statements. The bank statements will be stamped to affirm they have been faxed. The statements will be filed in chronological order. Two years worth of bank statements will be kept on site. Statements older than two years will be sent to archives.
Kokua Client Account bank statements will be received directly by the Client Finance Coordinator. The Coordinator will reconcile the bank statement and will fax the bank statement to the accountant. The bank statements will be stamped to affirm they have been faxed. The statements will be filed in chronological order. Two years worth of bank statements will be kept on site. Statements older than two years will be sent to archives.
M. PAYROLL
All hourly employees are responsible for completing a timesheet on a biweekly basis. All time sheets must be signed by the employee. Timesheets will be reviewed for accuracy by the individual’s supervisor who also signs the timesheet to affirm that it is correct. Timesheets should be turned by the time specified in current procedure. No payroll checks will be issued without a signed timesheet. Terminated employees, whether voluntary or involuntary, will be paid on the regular monthly payday.
The timesheets will receive a second review by the Team Support Specialist. When the timesheets have been verified, they are given to the Business Operations Coordinator who prepares the Payroll Summary for the accountant. Payroll will be prepared in accordance with the personnel policies and benefit plan. The accountant processes the payroll, prints the payroll checks and completes the direct transfer of federal withholding taxes.
Kokua’s regular payday is the tenth of the month following the end of the pay period. If pay day falls on a weekend, Kokua will attempt to pay employees on the Friday before the weekend. Because the payroll is processed by an outside accounting firm, Kokua cannot guarantee that this timeline will always be met.
Employees may elect to have direct deposit of their wages. Employees desiring direct deposit should meet with the Administrative Assistant who will assist them to complete the necessary forms.
Employees who prefer a payroll check may pick their check up in the office on payday. Employees should sign a roster affirming they have received custody of their check. Payroll checks will not be given out to a third party unless an employee has made a prior arrangement with the office to do so.
An employee who is experiencing a bona fide emergency may request a draw on the current month’s earned wages. The employee should bring a copy of their timesheet to the office to verify that they have worked sufficient hours to cover the amount of their draw request. Employee draws are given at the discretion of the Executive Director. Draw requests may be denied if the employee has made multiple draw requests or if the amount requested would leave the employee in an untenable financial position in the following month.
N. INVENTORY
The Business Operations Coordinator will maintain an up-to-date written inventory of property owned by Kokua. An entry should be made whenever equipment is disposed of or added. This inventory will be faxed to the accountant on a yearly basis in advance of the filing of the Thurston County Property tax.
The accountant will prepare a depreciation schedule at least annually.
O. LEASES
The Executive Director will review all leases. All leases, clearly defining terms and conditions, will be approved and signed by the Executive Director.
The Executive Director will keep a copy of all leases on file. The accountant will be informed of the terms and specifications of each lease and will make proper journal entries for same.
P. INSURANCE
Reasonable, adequate insurance coverage will be maintained to safeguard the assets of the corporation and to meet contractual requirements. Such coverage shall include at least property and liability, employee dishonesty, Directors and Officers and an ERISA Fidelity Bond.
The Executive Director will carefully review coverage before renewal. The Executive Director will maintain a file of insurance coverage. The Executive Director will notify the insurer in a timely manner whenever losses occur.
Q. GRANTS AND CONTRACTS
The Executive Director will carefully review each award and contract to ensure
compliance with all financial and programmatic provisions. Original copies of all grants and contracts will be kept on file. The accountant will prepare initial entries as appropriate to record each award. Different account codes will be used to track revenue and expenditures for different programs. The Executive Director will be responsible to insure that all financial reports are submitted on a timely basis.
R. ANNUAL AGENCY BUDGET
The Executive Director will prepare a draft of agency’s yearly budget and present it to the Board Finance Committee for review. The Finance Committee will make recommendations to the full Board based upon their review of the draft budget. The Board is responsible to approve a new budget prior to the end of the calendar year.
The Finance Committee will review financial reports prepared by the accountant at least quarterly. The Finance Committee may also request other reports from the Executive Director or the accountant as deemed necessary to fulfill their fiscal oversight responsibilities.
S. IRS FORM 990
The Finance Committee of the Board will review the IRS Form 990 annually prior to filing. The Finance Committee will make recommendations to the full Board regarding the approval of the Form 990. the Form 990 will be signed by an officer of the Board.
T. ACCOUNTS RECEIVABLE
The Administrative Assistant will maintain records of all accounts receivable. The Administrative Assistant will work with contractors to assure that payments are correct and are received in a timely manner.
U. AUDIT
The Board of Directors will contract with an independent auditing firm for a full audit of the books yearly. The Finance Committee of the Board will review the results of the audit and make recommendations to the full Board.
V. FISCAL AGENT STATUS
All fiscal sponsorship arrangements, must be approved by a vote of the full Board. Fiscal sponsorship arrangements must have a written agreement, stating the terms of the relationship and the purpose for the use of funds. Fiscal sponsorships will be limited to projects for which the Board determines
are charitable and are consistent with Kokua’s mission. Such projects must of strengthen the nonprofit sector and present no real or perceived conflicts of interest exist with board or executive committee members.
Kokua) will negotiate with the sponsored project a rate for indirect or direct costs to cover Kokua’s expenses of administering the temporarily restricted fund.
Sponsored projects will be required to submit full and complete quarterly and year end reports to Kokua’s Executive Director by the end of the Kokua’s fiscal year, December 31st.
Reports must include:
- detailed expenses using budget categories for original grant;
- program accomplishments and activities;
- lobbying expenditures; and
- the amount of remaining funds.
Any changes in the purpose for which grant funds are spent must be approved in writing by the Kokua’s Executive Director before implementation. Kokua retains the right, if sponsored project’s breaches the fiscal sponsorship agreement, or if a sponsored project jeopardizes the Kokua’s legal or tax status, to withhold, withdraw, or demand immediate return of grant funds.
The Executive Director will submit quarterly reports to the Board on the status of active fiscal sponsorships. Kokua will file appropriate tax forms for sponsored projects, including IRS form 1099.
W. KOKUA CLIENT ACCOUNT
Kokua will maintain a checking account dedicated to client-related transactions to prevent the co-mingling of Kokua funds and client funds. The Client Account will primarily serve as a pass through account. Examples of the type of transitions for which this account will be used are:
- Client start-up funds when a new household is forming
- SSP Payments
- Client allowance reimbursements
- Loans to clients
- Emergency purchases made on behalf of a client
- To pay move out expenses incurred by a client.
- To receive repayments from clients.
Access to the Client Account will be limited to the Executive Director and the Client Finance Coordinator. The Client Finance Coordinator may use a debit card associated with the Client Account to make on-line purchases for clients or to secure reservations for a client who will be going on vacation. Charges incurred on the debit card are then repaid from the clients’ payee accounts. Loan agreements signed by the clients or their guardians will be kept for all client loans. Backup documentation in the form of receipts and copies of repayment checks will be kept for all transactions.
The Client finance Coordinator will reconcile the Client Account bank statement monthly. The Client Finance Coordinator will also fax copies of the manual check ledger and the back statement to the accountant monthly. The accountant will reconcile the Client Account subsidiary ledger monthly and will give reports to the Executive Director.
While Kokua completes loan agreements with clients and has the expectation that loan payments will be made regularly, sometimes a client’s financial situation may change during the course of a year, making repayment difficult. At the close of every fiscal year the Executive Director will review the subsidiary ledger of client loans to determine if any of the loans should be written off as a bad debt.
All blank checks and checkbooks present in the Client Financial Office will be kept in locked cabinets when not in use.
X. BUSINESS VISA ACCOUNT
Kokua will maintain a business VISA account for purchases that must be pre-paid on-line or over the phone. The card may also be used for purchases of office supplies or incidental items. VISA card privileges will be limited to the Business Operations Coordinator, the Executive Director and the Assistant Director. Receipts will be kept for all purchases.
The Executive Director will do a monthly reconciliation of the VISA charges against the receipts to verify the validity of the charges. The Executive Director will write the account code for each purchase on the VISA bills so that the accountant can charge to purchases to the correct account.
October, 2009