Financial Management Policies And Procedures (Sample) (Page 8 of 9) in pdf

29.

EQUIPMENT INSTALLATION

Purchase, installation and maintenance of telephone equipment, telephone lines, office

equipment, computer equipment, etc. shall be approved by the Head of Finance after discussion

and approval by the Agency CEO. Staff Members and other managers shall be responsible for

receiving and supervising the installation of equipment scheduled for their facility or working

area, and for maintaining and protecting the equipment installed in their offices.

30.

DONATED MATERIALS AND SERVICES

Donated materials and equipment shall be reflected in the Financial Statements at their

estimated values measured on the date of receipt. Volunteers donate time to the Agency’s

Program services on an on-going basis. Other volunteers contribute time and services for

Administrative or fundraising activities. Such contributed services are generally not reflected

in the Agency’s financial statements, since there is no objective way of assessing their value.

31.

CONFIDENTIALITY AND RECORDS SECURITY

Financial records are restricted materials with limited access. Only the Head of Finance and

Accountant (or others so authorized) shall have access to financial records (vendor files,

checks, journals, payroll, etc.).

32.

DOCUMENT RETENTION

Financial documents are retained for a period of time in keeping with State law and the

recommendations of the IRS.

33.

TAX REPORTING

The Agency is exempt from federal income taxes under Section 501 (c) (3) of the Internal

Revenue Code as amended. Accordingly, no provisions for income taxes shall be reflected in

the financial statements.

Appendix

Effective Systems of Internal Control

General

Internal control can be divided into two areas: accounting controls and administrative controls.

Administrative controls deal with the operations of the business, whereas the accounting controls deal

with accounting for such operations. Accounting controls should be designed to achieve the five basic

objectives:

Validation

Validation is the examination of documentation by someone with an understanding of the accounting

system, for evidence that a recorded transaction actually took place and that it occurred in accordance

with the prescribed procedures. As systems grow more sophisticated, validation is a built in

component whereby the transactions test themselves against predetermined exceptions.

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