GFOA Alberta Policy Handbook

GFOA Alberta – Policy Manual

Policy

The Board of Directors (Board) on behalf of the membership is responsible for all finances as related to the GFOA Alberta Association. As such, GFOA Alberta must adopt an operating budget for each calendar year to fund the annual operations.

Definitions

1. Expenditures – an operating budget must include the estimated amount of the following expenditures: the amounts needed to provide for GFOA Alberta policies and programs, to pay debt obligations, to meet the costs related to conference, Task Forces and sub committees, amounts to be transferred to reserves or capital, amounts to cover any prior period deficiency, and any other expenditure the Board deems as necessary.

2. Revenue – an operating budget must include the estimated amount of the following revenues: amounts generated from Alberta membership fees, grants, conferences registrations and sponsorships, investments, any other sources, and transfers from reserves.

3. Authority – GFOA Alberta Directors and Officers may only make an expenditure that is included in an operating budget or is otherwise authorized by resolution of the Board. The Board shall establish procedures to authorize and verify expenditures that are not included in the budget. The Board shall not approve an annual operating budget that includes an operating deficit.

4. Liability – GFOA Alberta Directors and Officers that direct or make an unauthorized expenditure are liable to GFOA Alberta for the particular expenditure or the amount spent.

Guidelines/Procedures

1. Authorization

Administration, with the support of the Treasurer is responsible for the preparation of the budget. The board is responsible for approval of the budget.

2. Responsibilities of the Treasurer

Administration with the input of the Treasurer shall establish appropriate guidelines, procedures and internal controls as it relates to the Association’s budget:

a. to ensure the achievement of the objectives which are identified within the Budget Policy and Procedures;

b. for authorizing persons to engage in budget preparation, analysis and financial activities;

c. for the accounting and reporting of actual expenditures/revenues to budget;

d. for the regular preparation and reporting of financial activities on a monthly basis.

The guidelines, procedures and internal controls shall be approved and reviewed on a regular basis by the Board.

3. Responsibilities of the President

The President shall monitor the guidelines, procedures and internal controls established by the Treasurer to ensure their compliance with the Budget policy and procedures.

4. Annual Budget Preparation

The following budget preparation steps shall be performed annually:

a. The Treasurer shall put the budget before the Board for their approval. A budget must be approved for each upcoming fiscal year. A proposed budget shall be presented to the Board at the in-person Board meeting in the fall of each year.

b. The proposed budget shall be deemed approved if the proposed budget receives approval of a simple majority of the Board present at a regular Board meeting. Approval shall be no later than the 31st of December of the year preceding the budget year.

c. Once approved, the proposed budget becomes the approved budget for the fiscal year.

d. Any Board member or Executive Director may, during the fiscal year, present to the Board, for its consideration and approval, amendments to the budget for the then current fiscal year at any regular meeting of the Board.

e. If the amended budget is approved by the Board, the amended budget shall apply to the remainder of the current fiscal year.

5. Forecast Preparation

A two-year operating forecast document shall be prepared. This document shall outline the Board’s expectations of revenues and expenditures for future fiscal years:

a. The Treasurer shall present a Forecast for the next two fiscal years following the current proposed budget year at the in-person Board meeting in the fall of each year.

b. The Treasurer, Executive Director and/or President shall provide updates to the Board on amendments on the Forecast document throughout the current fiscal year.

c. Any amendments accepted by the Board will be incorporated into the Forecast by the Treasurer.

d. The Forecast will form the basis for the preparation of the Annual Budget for the upcoming fiscal year.

6. Reporting

The Treasurer shall report on the financial activities undertaken by GFOA Alberta and present the annual operating budget to membership at the Annual General Meeting. The following information shall be provided to the Board at its regular meetings:

a. total revenues and expenditures for the month and year to date.

b. budget variance analysis (i.e. actual revenues and expenditures relative to the approved/amended budget).

c. detailed expenditures (i.e. Cheque Log)

7. Review and Amendment Procedures

GFOA Alberta’s Budget Policy and Procedures shall be reviewed annually by the Board, who may approve any changes as required.

8. Annual Surplus/Deficit Funds

Should GFOA Alberta be in either a surplus or deficit position at the end of each Fiscal Year a transfer to or from reserves will be presented to the Board for approval.

GFOA Alberta – Policy Manual

Policy

GFOA Alberta will manage cash and invest surplus funds in a prudent manner that will provide optimum investment returns with the maximum security while meeting the Association’s cash flow requirements.

Objectives

This cash management and investment policy has the following objectives listed in priority order:

Capital preservation – the Association recognizes its fiduciary responsibility for the stewardship of financial funds with which it has been entrusted. Therefore, the prime objective of this policy is to ensure that cash on hand (including cash held in financial institution current accounts) and the principal amount of each investment are safe from losses due to market conditions and issuer default. To accomplish this objective, GFOA Alberta will ensure that sufficient diversification, as appropriate, exists within its investment portfolio.

Maintenance of liquidity – the Association’s investment portfolio will be sufficiently liquid in order to enable the Association to meet its operating cash flow requirements that might be reasonably anticipated in the short and longer term. For the purposes of this policy liquidity is defined as the ability to convert an investment into cash with minimum risk associated with loss of principal or accrued interest.

Rate of return – the Association’s investment portfolio will be effectively managed to ensure that an optimum rate of return is realized on all investments within the parameters of the objectives established within this policy.

Guidelines/Procedures

GFOA Alberta will adopt the following guidelines / procedures in respect to this policy.

Authority

The Board of Directors (Board) are responsible and accountable for the control, management and administration of GFOA Alberta’s cash and investments in accordance with the policy approved by the Association. The Board delegates this responsibility to the Treasurer and the President.

Responsibilities of the Treasurer

The Treasurer shall establish appropriate guidelines, procedures, and internal controls:

a. to ensure the achievement of the objectives which are identified within this policy,

b. for authorizing persons to engage in cash management and investment activities,

c. for purchasing and selling investments,

d. for custody and safekeeping of investments,

e. for the accounting and reporting of cash management and investment activities, and

f. for the regular preparation and reporting of bank account reconciliations. A bank reconciliation is to be prepared for each bank account in the name of GFOA Alberta on a monthly basis.

The guidelines, procedures, and internal controls shall be approved and reviewed on a regular basis (minimum annually) by the Board.

The Treasurer shall provide a copy of this policy to each financial institution GFOA Alberta transacts business with.

Responsibilities of the President

The President shall monitor the guidelines, procedures and internal controls established by the Treasurer to ensure their compliance with this policy.

Cheque Authorization and Signatures

The President, Treasurer, Executive Director and Executive Administrator shall be authorized to sign cheques.

No signatory may sign a cheque issued in the name of the signatory.

Cheques made out to cash are prohibited.

Procurement & Custody of Investments

The Treasurer shall ensure:

a. that the method of procurement achieves and maximizes the objectives of this policy,

b. that each individual investment transaction (purchase or sale) is jointly authorized by the Treasurer and the President (or another member of the Board) prior to the transaction occurring,

c. that all investment certificates issued to GFOA Alberta are in the name of or held in the name of GFOA Alberta.

d. that negotiable securities are held in one of two ways;

1. in a safekeeping compartment with GFOA Alberta’s banker, or

2. held by a third-party custodian in the name of GFOA Alberta and evidenced by safekeeping receipts and monthly statements.

e. that nonnegotiable investment certificates are maintained in an appropriate investment file in the custody of the Treasurer, and

f. that financial institutions provide the Treasurer with confirmation of the investment certificate.

The Treasurer will report on the cash management and investment activities undertaken by GFOA Alberta. The following information will be provided to the Board on a regular basis (generally at scheduled Board meetings):

a. total assets within the investment portfolio,

b. specific holdings within the investment portfolio,

c. effective rate of return on the investment portfolio,

d. evaluation of portfolio performance, and

e. bank reconciliations and cheque logs.

GFOA Alberta’s Cash Management / Investment Policy shall be reviewed annually by the Board, who will approve any changes, as required.

GFOA Alberta – Policy Manual

Policy

The purpose of this policy is to provide guidance to the Board of Directors (Board) and Administration with respect to purchasing functions to achieve the best value for the Association through purchasing processes that are open, fair and transparent, as well as to make certain the following purchasing criteria are met:

• • • Compliance with all applicable laws, regulations, bylaws, policies, directives and trade agreements,
    • Establish efficient procedures for the purchase of goods and services,
    • Secure supplies, services and equipment at the lowest possible cost corresponding with level of quality needed,
    • Exercise positive financial control over purchase,
    • Clearly define authority and responsibility for the purchasing function, and
    • Ensure the quality of purchases.

Guidelines/Procedures

1. Purchasing Guidelines

1.1 The purchase of materials, supplies, services and equipment shall be made in accordance with this policy.

1.2 As long as expenditures do not exceed the budget, Board review of Cheque Logs is not necessary; however, it is the Treasurer’s responsibility to report to the Board the financial affairs of GFOA Alberta in relation to quality of services being performed.

1.3 The Executive Director has the authority to make unplanned expenditures for emergencies up to 2500. Administration will be responsible to informing the board of any unplanned, emergent expenditures made.

1.4 For the purpose of implementing this policy, the following positions are responsible for purchasing as listed below:

Executive Administrator

• responsible and accountable for the general operational requirements of GFOA Alberta, within the approved budget.

Executive Director

• responsible and accountable for overseeing general operational purchases, including that of GFOA Alberta Task Forces.

Treasurer

• to ensure compliance of all procurement policies, applicable laws, trade agreements and regulations,

• to validate purchases and monitor all expenditures to ensure that commitments do not exceed annually approved budget,

• to support the promotion of sound procurement practice, and • to report on Budget Overruns to the Board, as required.

President

• to monitor the guidelines, procedures and internal controls established and ensure compliance with this policy.

Board of Directors

• to evaluate the overall budget of GFOA Alberta, and

• to approve emergency/unplanned expenditures as per this policy, while collectively assessing the impact to the bottom line of the budget and weigh priorities.

2. Non-Competitive and Competitive Processes

Contractual agreements may be made with the Executive Director’s approval, as long as the following conditions are considered:

a. The purchase is part of GFOA Alberta’s regular daily business needs,

b. The purchase fits within the approved annual budget,

c. The purchase does not override an existing product or service Contract Agreement, and

All contracts will be included within the Executive Director’s report.

Supplies, equipment, and services must be acquired through a competitive process that ensures the best value for the funds expended to meet the specific needs and promote fair dealings and equitable relationships.

Appropriate terms, conditions, parameters, waiver options and approval requirements necessary must be established and documented. All requirements must be clearly articulated throughout a tendering process to ensure an open and transparent competition.

3. Single/Sole Sourcing

Single and sole sourcing shall be used only in narrowly defined circumstances, such as:

• emergencies,

• to ensure compatibility with existing products, to protect exclusive rights such as copyright, patents or exclusive licences, or to maintain specialized equipment that must be maintained by the manufacturer or its representative,

• where there is no response to a call for tenders,

• where the supply of goods or services is controlled by a supplier that is a statutory monopoly,

• for research and professional development, and

• to maintain validity of warranties/guarantees.

4. Conflict of Interest

A “Conflict of Interest” exists where the decisions made, and/or the actions taken by the Board or Administration in the exercise of their duties could be affected by:

• personal, financial or business interests, or

• the personal, financial or business interests of relatives, friends or associates.

It is important to avoid not only real conflicts of interest but also being placed in a position that could give the appearance of being harmful to the Association’s interest.

GFOA Alberta – Policy Manual

Financial Review:

• • • Administration is responsible for the preparation and fair presentation of the financial statements.
    • An annual review engagement will be conducted for the fiscal year;
    • The review will be conducted by a recognized accounting firm and appointed at a Board meeting.
    • The Board of Directors (Board) will have an opportunity to request any specific areas of concern for an independent accounting firm to review in more depth
    • The results will be reviewed at a Board meeting prior to the acceptance of the financial statements
    • The review will be completed within 3 months of the year end and will be presented at the Annual General Meeting by the Treasurer to be reviewed by the membership.

Internal Controls:

• • • Internal controls are the responsibility of Administration.
    • The controls will include appropriate segregation of duties, expense and spending thresholds, cheque writing and spending authorization.
    • Internal controls – Administration should establish control procedures, and ensure they are documented and followed. All aspects of cash receipting and accounts receivables should be subject to proper internal controls including:
      • • Segregation of duties such as initiation and authorization of transactions, execution of transactions (receipting and disbursement), recording transactions, reconcilement, and maintaining custody,
        • Processing and timely deposit of receipts,
        • Timely reconciliation to applicable ledgers,
        • Physical security procedures. This is especially important for funds not deposited day of receipt, and
        • Use of integrated receipt and accounting systems.

GFOA Alberta – Policy Manual

This revenue policy further defines the revenues of the Association in terms of Professional Development revenue, Investment revenue, Fundraising, Grants, Sponsorships and Membership Fees. The Board of Directors (Board) will confirm at budget time what the expected revenue sources will be for the upcoming year. Revenues will be segregated in the financial statements to reflect their source. (ie. Sponsorship will have its own line item in the revenue section).

Professional Development revenue – include all revenue for programs that GFOA Alberta develops and any revenues that GFOA Alberta receives as a result of partnerships. Partnership revenues will be defined in the partnership agreements prior to their execution.

Investment revenue – are the proceeds from current bank investments as well as the revenue received as a result of proceeds from partner shared investments. For further definition and details on the execution, the partnership agreement will be the source.

Fundraising – participation in raising of funds for the Association as a result of an intended event or program. All fundraising activities will be ethical and fit within the GFOA Alberta mandate and vision of the Association. All donations or sponsorships will be used for the purposes for which they are given. If necessary due to program or organizational changes, alternative uses will be discussed where possible.

Grants – are funds received from a funding body. The funders may provide spending requirements and the Association will stay within that mandate. Grant applications must be approved by the Board prior to accepting funds to maintain the organizational intent and to authorize the grant terms.

Sponsorship/Partnership – defined as a mutually beneficial exchange, whereby a sponsor receives a benefit in return for providing cash and/or products or services to GFOA Alberta. The following principals shall be followed:

a. GFOA Alberta will consider forming mutually beneficial relationships with other organizations that advance the Association’s vision of inspiring quality leadership and professional financial management of municipal governments and is seen as the preeminent leader in municipal financial strategies, policies and practices.

b. Unless otherwise specified, surpluses gained from sponsorships will be used to fund the general operations of the Association.

Annual Sponsorship Package

1. On an annual basis, the Annual Sponsorship Package (sample attached), as amended from time to time, will be sent to past and potential new sponsors.

2. In soliciting, evaluating, and/or endorsement for sponsorship, partnership, or other proposals from organizations, the following guidelines will be followed:

a. Sponsorship agreements will not in any way imply that GFOA Alberta has endorsed products or services,

b. Executive Director approval will be required for all sponsorships,

c. The membership list must protect the rights of the members and will not be distributed for promotional or marketing purposes.

Membership Fees – The membership fee structure of GFOA Alberta is established with a number of objectives in mind.

1. Fees should encourage finance professionals from all sizes of local governments to join and remain as Members.

2. The fee structure should encourage maximizing membership.

3. Fees will ensure priority access to GFOA Alberta Conferences and Professional Development.

4. Fees should be favourably compared to other competing associations.

5. Growth in membership – The fee structure should encourage added memberships in existing municipalities and foster new memberships.

6. Equitable fees between municipalities – The fees should be based on size of municipality and ability to pay, which is congruent with the international fee structure.

GFOA Alberta – Policy Manual

Accounts receivables are claims for money that are established by invoice or contract/agreement. These are created as assets of GFOA Alberta and recognized as revenue earned.

In this policy a write off is a request to remove any uncollectible revenue that is at least 1 year old and reclassed as a bad debt. Bad debts represent accounts receivables that will not be collected after all reasonable attempts to collect it have been exhausted. These bad debts may include but not limited to disputed or erroneous bills and account balances for which entities are not able or are unwilling to pay.

The Executive Director is responsible to ensure that this policy is followed.

The aged accounts receivables report will be reviewed by staff at regular monthly Administration meetings. Attempts shall be made to contact entities that have outstanding accounts with GFOA Alberta after 30 days. Another attempt at collection shall be made at or before 60 days outstanding. Contact will also be made at 90 days outstanding, after which accounts will be moved to bad debts, follow-up will continue as necessary to collect debts.

After outstanding for 1 year and after attempts at collection, the Executive Director shall recommend to the Board of Directors to write off the bad debts.