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HomeMy WebLinkAboutFinancial policyINTERIOR REGIONAL HOUSING AUTHORITY RESOLUTION 2013-05 FINANCIAL POLICY WHEREAS, the Board of Commissioners of the Interior Regional Housing Authority (IRHA) recognizes that serving on the Board of the IRHA and representing the people of the TCC/Doyon region comes with great responsibility; and WHEREAS, the Board of Commissioners of the IRHA recognizes the potential impact their actions have on the organization and the region as a whole; and WHEREAS, the Board of Commissioners realize that the importance of their work on the Board requires high moral and ethical standards; and NOW THEREFORE BE IT RESOLVED, that the Board of Commissioners of the Interior Regional Housing Authority hereby adopts the attached Financial Policy to provide guidelines for those serving on the Board of Commissioners. PASSED ON THIS 2nd DAY OF AUGUST 2013. Woods, Chair 828 27th Avenue • Fairbanks, Alaska 99701-6918 • Tel (907) 452-8315 • 1-800-478-IRHA • Fax (907) 456-8941 INTERIOR REGIONAL HOUSING AUTHORITY SUBJECT: Financial Policy SECTION: Administration Authorization: Board of Commissioners Date of Review/Approval: Signature: Date: Supersedence: Adopted by Resolution 99-16, December 17, 1999 Amended by Resolution 01-21, September 21, 2001 Amended by Resolution 02-18, August 23, 2002 Amended by Resolution 2013-05, August 2, 2013 Financial Policy Policy Statement The Board of Commissioners recognizes that the IRHA is a property management business. The Board also recognizes that an essential element for the financial health of the IRHA is the development and use of procedures for the safe handling and investment of funds and particularly, controls on cash. Without such procedures, the IRHA risks losing assets by theft and also increases the risks associated with errors in accounting records. These financial management procedures are standard business procedures that will govern the investment of funds, handling of cash collections, cash disbursements, petty cash funds, and capitalization of IRHA assets. The procedures governing the financial management of the IRHA shall comply with the provisions at 24 CFR 85.20 and OMB Circular A-133. 1. Investment Procedures a. IRRA Responsibility 1. The IRHA shall invest any funds not needed for the immediate operation of the IRHA in eligible interest bearing instruments. 2. The IRHA Chief Finance Officer shall be the custodian of the official IRHA investment records. 3. The IRHA Chief Executive Officer in cooperation with the Chief Finance Officer shall prepare and present all depository agreements with the designated financial institutions to the Board for approval by resolution. All transactions shall be documented in the Board minutes. 4. The Chief Finance Officer shall determine the investment amounts, duration, and type. Financial Policy Page 1 of 12 5. The Chief Finance Officer shall prepare a cash forecast report at least annually which defines expected cash inflows and outflows to project expected cash shortfalls and surpluses for determining investment amounts and timing. 6. Investments shall be scheduled to mature to cover any shortfalls in cash. Investments comprised of Indian Housing Block Grant (IHBG) funds shall be invested for no longer than two (2) years) Access to investment securities storage areas shall be restricted to the Chief Executive Officer, Chief Finance Officer or other IRHA employees designated by the Chief Executive Officer. Areas accessible to the general public shall not be used to store investment securities. 8. At a minimum, investment securities shall be kept in rooms with lockable interior doors. The storage facilities shall be locking, fireproof file cabinets. Highly negotiable securities should be stored in a safety deposit box. 9. The IRHA Chief Finance Officer shall maintain an investment ledger in a location separate and apart from the investments themselves so that in the event of fire, theft, or other loss, a new ledger may be prepared from the investments or the investments may be replaced or a claim filed based on information from the ledger. For electronic ledgers, a back-up copy of the ledger shall be maintained separate and apart from the investments in a safety deposit box. 10. The IRHA Chief Finance Officer shall keep invested Indian Housing Block Grant (IHBG) funds in accounts separate from other IRHA funds. 11. All investments shall be in the name of the Interior Regional Housing Authority and maintained in custodian or trust accounts. 12. The Chief Finance Officer or designee shall reconcile the investment ledger to the general ledger on a monthly basis. 13. An investment ledger shall be maintained by the Chief Finance Officer to track all investment activities. The investment ledger shall include the investment type, the interest rate, the purchase price, maturity and sales date, the financial institution, the principal amount invested, the program ownership, the account number, and the interest payment terms. This ledger may be prepared in a spreadsheet format to ease management and reporting. The ledger shall be prepared in a format that sorts the investments by maturity date and IRHA program ownership. 14. The Chief Finance Officer shall ensure that all interest earned is collected and credited in the appropriate accounting records of the IRHA. Financial Policy Page 2 of 12 15. An annual physical inventory shall be taken of all investment securities and matched against the investment register. The Chief Finance Officer shall maintain records of this inventory. b. Financial Institution's Responsibility 1. Investment documents are to be kept by the respective financial institution. 2. The respective financial institution shall serve as the custodian of securities and the Chief Finance Officer will be responsible for maintenance of the investment accounting records. 3. The respective financial institution shall be responsible for the maintenance of custodial accounts. 4. The respective financial institution, as custodian, shall ensure interest is credited to the right accounts. The accounts are also to be checked by the IRHA Chief Finance Officer and audited in accordance with the Single Audit Act. 5. IRHA NAHASDA funds shall only be invested in the eligible investment instruments listed at 24 CFR 1000.58(c) which include the following: (1) Obligations of the United States. (2) Obligations issued by Government sponsored agencies. (3) Securities that are guaranteed or insured by the United States. (4) Mutual (or other) funds registered with the Securities and Exchange Commission and which invest only in obligations of the United States. (5) Accounts that are fully collateralized to ensure protection of the funds, even in the event of bank failure. 6. IRHA Non-NAHASDA Funding shall be invested in the same instruments as listed above unless directed otherwise by the Board of Commissioners. 2. Internal Control Procedures Accounting methods employed by the Interior Regional Housing Authority shall, at a minimum, satisfy such requirements as may be prescribed by Federal or State laws, regulation, or guidelines. Additional account methods shall be employed to satisfy applicable government accounting standards promulgated by such competent authoritative sources as the National Committee on Governmental Accounting. a. Cash Collections Control Procedures 1. Cash, checks, or money orders will be deposited in banks where the IRHA has approved depository agreements. Deposits should be made at least weekly regardless of the amount accumulated. 2. When cash is retained in the office overnight, it must be stored in a locked, fireproof cabinet or safe. Financial Policy Page 3 of 12 3. Checks received shall be immediately stamped "For Deposit Only". 4. Only IRHA employees designated by the Chief Executive Officer are authorized to receive payments from residents and issue receipts. 5. The supply of unassigned receipts will be adequately safeguarded and kept in the custody of IRHA personnel. 6. A receipt shall be issued for each payment collected so there is an official record of each transaction. 7. Receipts shall be pre -numbered. One part shall be given to the resident and one part, having the same number, shall be retained by the IRHA for its permanent record. 8. Receipts shall contain, at a minimum, the following information: (1) name of the resident being credited with the payment, (2) date, (3) amount of payment, (4) method of payment (cash, check, etc.). 9. A bank deposit slip shall be prepared and shall include each of the cash receipt numbers making up the deposit and complete details as to the amount of coin, currency and checks. An IRHA employee, other than the one who completed the cash receipts, shall reconcile the receipts. 10. All payments shall be deposited intact with the appropriate deposit slip to provide an additional record. Under no circumstances shall any disbursements be made from payments received. 11. Payments received shall be recorded in the individual resident accounts receivable records on the day it is received even when the money is not deposited on the same day. Cash receipt numbers shall be recorded on both the deposit slip and the resident account receivable records. 12. The Housing Counselor/Loan Officer or his/her designee shall be responsible for posting the resident accounts receivable records. The Chief Finance Officer or his/her designee shall make the bank deposits. b. Cash Disbursement Control Procedures All disbursements must be made by either check, wire transfer, electronic fund transfer or petty cash as deemed appropriate by the Chief Executive Officer or the Chief Finance Officer. All checks must be pre -numbered and used in sequence. Voided checks must be retained and recorded. 2. All checks shall require two signatures by Board approved IRHA employees. Financial Policy Page 4 of 12 3. The supply of unused checks must be adequately safeguarded in a fireproof cabinet or safe. 4. The Chief Finance Officer or his/her designee shall prepare checks. 5. The Board of Commissioners shall approve an appropriate number of IRHA employees to sign checks in addition to the Chief Executive Officer. Whenever possible, no individual shall ever sign a check on which he/she is the payee. 6. All check vouchers shall contain enough narrative description to specifically identify the purposes of the payment and the account to which the cost is to be charged. 7. Checks shall never be written for "cash". 8. Checks shall not be signed or countersigned in advance of being completely filled out. Each check shall be accompanied by supporting documentation, including invoices, travel vouchers, etc. The Chief Executive Officer or his/her designee shall approve the supporting documentation. 9. Check signers shall review each check carefully and not sign any check which has evidence that any part of the check has been altered. If it is necessary to change a check, the check must be voided and a new check issued. 10. The signed check should be mailed or delivered by the Chief Executive Officer or his/her designee. 11. The Chief Finance Officer or his/her designated employee shall reconcile IRHA bank statements. 12. All checks shall be pre-printed, at least two-part and pre -numbered and shall contain the IRHA name. 13. A petty cash fund shall be maintained for minor expenses (usually less than $50.00) that require immediate payment. The petty cash fund shall be kept in a secure cabinet or drawer under the control of the Finance Department. The Finance Department shall replenish the petty cash as deemed necessary by submitting a Check Request Form. The Check Request shall include receipts for all expenditures and a reconciliation of the receipts and the funds remaining in petty cash. 14. When invoices are paid, the invoice shall be stamped "entered" to avoid paying the same invoice more than once. c. IRHA Payroll Disbursement Procedures In addition to the disbursement procedures described in Section B, the following additional procedures shall apply to payroll disbursements. Financial Policy Page 5 of 12 1. The IRHA shall have written authorizations on file for all employees that cover their rates of pay, withholdings, and deductions. 2. The Chief Executive Officer or his/her designee shall establish adequate timekeeping controls including the use of time sheets and there shall be supervisory review and approval of all employee time/leave records prior to issuance of a check. 3. The Chief Executive Officer or his/her designee shall prepare payroll checks. Payroll and personnel duties, such as timekeeping, salary authorization, and personnel administration shall be the responsibility of the Chief Executive Officer or his/her designee. 4. The IRHA shall never pay any employee for more than 100 percent (100%) of his/her time through the encumbrance of more than one position or title. 5. No personnel loans or loan guarantees are to be made to employees including loans for vehicles. 6. All payroll disbursements are to be performed in compliance with the State of Alaska and Federal Fair Labor Standards provisions. This specifically includes compliance with exempt and non-exempt employee standards. d. Agreements with Financial Institutions 1. The Chief Executive Officer shall be responsible for approving any agreements for services provided to the IRHA by banks or other financial institutions. 2. Any change in the type of services being used or provided by a bank or other financial institution shall require the approval and signature of the Chief Executive Officer. 3. Banks and financial institutions that the IRHA has agreements for services with shall receive written notice of these adopted financial management policies. e. Journal Entry Controls 1. Journal Entries shall be kept by the Chief Financial Officer or his/her designee. The Journal Entries shall be sequentially numbered and kept available for review. 2. Journal Entries shall go through an approval process to ensure all entries prepared are accurate and adequately supported by documentation. Journal Entries shall be reviewed and signed off by a person separate from the employee proposing the entry. 3. Capitalization Procedures Financial Policy Page 6 of 12 a. Categories 1. The capitalization of IRHA owned property is necessary for establishing and maintaining the IRHA property ledger in its book of accounts. 2. All property and equipment owned by IRHA shall be divided into two categories: Expendable items or Non -expendable items. 3. Expendable items are purchased or donated items costing less than $5,000. 4. Non -expendable items purchased or donated are items having a useful life of more than twelve (12) months and costing more than $5,000. b. Requirements 1. Non -expendable items shall be capitalized by the Chief Executive Officer or his/her designee for budgeting and financial control purposes. 2. The Chief Executive Officer or his/her designee shall maintain a list of all capitalized items for inventory control purposes. 4. Credit Card Control a. Credit cards maybe made available to designated IRHA employees who agree to be financially responsible for properly using the credit cards. b. The Chief Executive Officer shall designate IRHA employees who may possess and use IRHA credit cards. For the purpose of this policy any IRHA employee possessing an IRHA credit card shall be referred to as a CARDHOLDER. c. IRHA credit cards are for authorized business expenditures and not intended to be used by employees as a substitute for personal credit cards. d. IRHA shall develop a written agreement that clarifies the employees' rights and responsibilities with respect to IRHA's credit card program. Employees who are assigned credit cards shall sign this written agreement to document their awareness of this policy along with agreeing to the terms of the agreement. At a minimum, the agreement shall contain the following provisions: Authorized Business Uses. The CARDHOLDER agrees to use the IRHA credit card for authorized business expenditures only. Business expenses must be authorized by the Chief Executive Officer or the Chief Finance Officer before charges are incurred on the IRHA credit card in accordance with applicable IRHA policies, procedures, and practices. Valid business expenses may be authorized in writing retroactively; however, if this does not occur, CARDHOLDER will be responsible for reimbursing and will reimburse IRHA for such charges as if they were for personal use and erroneously charged. Financial Policy Page 7 of 12 2. No Personal Use. The CARDHOLDER agrees not to make personal charges on the IRHA credit card. If the CARDHOLDER erroneously charges a personal item on the IRHA credit card, he or she agrees to reimburse IRHA within thirty (30) days for the credit card charges for such personal use, including any finance, late, or penalty charges. 3. Lost or Stolen IRHA Credit Cards. If the CARDHOLDER discovers that his or her IRHA credit card has been lost of stolen, he or she agrees to notify the credit card company immediately and IRHA on the first business day after discovery of the loss. If the CARDHOLDER fails to report the loss promptly, he or she will be solely liable to IRHA for any charges on that card. 4. Credit Limit. The CARDHOLDER agrees not to exceed the IRHA credit card's established credit limits. If a higher limit is required, the CARDHOLDER agrees to submit to IRHA a request for the new credit limit along with a justification. Payment of Credit Card Billing, IRHA will ensure all billings charged on the Cardholder's IRHA credit card are mailed to IRHA. IRHA will pay all amounts charged on the CARDHOLDER'S IRHA credit card. CARDHOLDER will reimburse IRHA for all amounts erroneously charged or not authorized. 6. Receipts. The Cardholder agrees to submit to IRHA, within one week of transaction, receipts for all expenses charged on his or her IRHA credit card. 7. Examination of Billings. Upon the request of IRHA, the CARDHOLDER agrees to examine billings for his or her IRHA credit card to assure that all charges are valid. If there are incorrect charges, the CARDHOLDER agrees to notify IRHA immediately and, as requested, to complete and return any forms for disputing such charges to the credit card company. If the CARDHOLDER fails to report incorrect or disputed charges promptly as required under this paragraph, the CARDHOLDER agrees he or she will be liable to IRHA for any resultant charges. 8. Changes in Name. The CARDHOLDER agrees to notify IRHA of any change in his or her name as it appears on his or her IRHA credit card. 9. Surrender of IRHA Credit Card. The CARDHOLDER agrees to surrender his or her IRHA credit card upon demand by IRHA or when there is no longer a business need for the card, or when his or her employment with IRHA is terminated. The CARDHOLDER agrees to pay all monies owed to IRHA upon his or her surrender of the IRHA credit card. 10. Disciplinary Action; Cause for Removal. The CARDHOLDER must acknowledge that misuse and/or mismanagement of the IRHA credit card may result in disciplinary action against an IRHA employee, including but not limited to termination of his or her employment. Financial Policy Page 8 of 12 11. Termination. If the IRHA terminates a credit card, the CARDHOLDER shall, upon receipt of written notice of termination, surrender to IRHA the credit card. 5. Board of Commissioners Credit Card a. Credit cards may be made available to designated IRHA Board of Commissioners who agrees to be financially responsible for properly using the credit cards. b. The Chief Executive Officer shall designate IRHA Board of Commissioners who may possess and use IRHA credit cards. For the purpose of this policy, any IRHA Board of Commissioner possessing an IRHA credit card shall be referred to as a CARDHOLDER. c. IRHA credit cards are for authorized business expenditures that are necessary and reasonable for travel expenses that pertain to the transaction of company business and not intended to be used by the commissioners as a substitute for personal credit cards. d. An IRHA written agreement which clarifies the Board of Commissioner's rights and responsibilities with respect to IRHA's credit card program shall be signed by the commissioner. The agreement shall contain the following provisions: 1. Authorized Business Uses. The CARDHOLDER agrees to use the IRHA credit card for authorized business expenditures only. CARDHOLDER will be responsible for reimbursing and will reimburse IRHA for such charges as if they were for personal use and erroneously charged. 2. No Personal Use. The CARDHOLDER agrees not to make personal charges on the IRHA credit card. If the CARDHOLDER erroneously charges a personal item on the IRHA credit card, he or she agrees to reimburse IRHA within thirty (30) days for the credit card charges for such personal use, including any finance, late, or penalty charges. 3. Lost or Stolen IRHA Credit Cards. If the CARDHOLDER discovers that his or her IRHA credit card has been lost or stolen, he or she agrees to notify the credit card company immediately and the IRHA on the first business day after discovery of the loss. If the CARDHOLDER fails to report the loss promptly, he or she will be solely liable to IRHA for any charges on that card. 4. Payment of Credit Card Billing. IRHA will ensure all billings charged on the CARDHOLDER'S IRHA credit card are mailed to IRHA. IRHA will pay all amounts charged on the CARDHOLDER'S IRHA credit card. CARDHOLDER will reimburse IRHA for all amounts erroneously charged or not authorized. 5. Receints. The CARDHOLDER agrees to submit to IRHA, within ONE WEEK of transaction, receipts for all expenses charged on his or her IRHA credit card. 6. Examination of Billings. Upon the request of IRHA, the CARDHOLDER agrees to examine billings for his or her IRHA credit card to assure that all charges are valid. If there are incorrect charges, the CARDHOLDER agrees to notify IRHA immediately and, as requested, to complete and return any forms disputing such charges to the credit card company. If the CARDHOLDER fails to report incorrect or disputed charges promptly as required under this paragraph, the CARDHOLDER agrees he or she will be liable to IRHA for any resultant charges. 7. Changes in Name. The CARDHOLDER agrees to notify IRHA of any change in his or her name as it appears on his or her IRHA credit card. Financial Policy Page 9 of 12 8. Surrender of IRHA Credit Card. The CARDHOLDER agrees to surrender his or her IRHA credit card upon demand by IRHA or when there is no longer a business need for the card, or when his or her term as a board of commissioner no longer exists. The CARDHOLDER agrees to pay all monies owed to IRHA upon his or her surrender of the IRHA credit card. The CARDHOLDER must acknowledge that misuse and/or mismanagement of the IRHA credit card occurred and the card holder will surrender his or her card to IRHA. 9. Termination. If the IRHA terminates a credit card, the CARDHOLDER shall upon receipt of written notice of termination, surrender to IRHA the credit card. 6. Budgets and Budget Control a. The IRHA shall define a budget as a realistic estimate of the operating revenue and expenditures to be incurred in the prudent operation of the IRHA during a specific period of time. b. The specific period of time to be used for budgeting purposes for IRHA programs funded by an Indian Housing Block Grant through the Native American Housing and Self - Determination Act (NAHASDA) shall be the same as the Plan Year defined in the IRHA's Indian Housing Plan (IHP). The IRHA's Plan year shall be the same as the IRHA's fiscal year that is each calendar year (January through December). c. Each annual operating budget shall include adequate justification and a narrative of the relation of the requested budget to the IRHA's goals, objectives and activities described in the IRHA's Indian Housing Plan requested by NAHASDA. d. The Chief Executive Officer shall be responsible for the efficient and effective use of budget appropriations and the control of costs. e. The IRHA management team comprised of the Chief Executive Officer and respective Department Directors shall work together to prepare the budget. f. The basis for budget assumptions for the management team shall be the goals and objectives described in the IRHA's IHP. g. The Finance Department's role in the budgeting process is to ensure that the management team has the most current information available regarding budget to actual comparisons. h. Each annual operating budget shall be approved and adopted by the IRHA Board of Commissioners. i. The Chief Executive Officer shall always recommend a balanced annual operating budget to the IRHA Board of Commissioners. j. Revisions in the operating budget necessitated by changes in circumstances or estimates during a Plan Year resulting in an increase to the overall budget shall be processed in the same manner as the original budget. Financial Policy Page 10 of 12 k. Expenditures shall not be made that exceed an appropriation for a department budget except in emergency situations as determined by the Chief Executive Officer. 1. An annual operating budget is to be prepared and adopted for each fiscal year to authorize and control the financial operations of the IRHA. in. The budgets should provide sufficient detail to enable the Board of Commissioners and IRHA management to make informed decisions about spending and investing IRHA resources. n. The Chief Executive Officer shall establish procedures to monitor the progress of the budget throughout the year. The monitoring activities shall enable the Chief Executive Officer and the Board to: 1. Monitor how its financial plan is working; 2. Determine bow its spending is preceding in relation to its budget; 3. Identify unexpended budget to actual differences; 4. Determine the validity of its budget estimating techniques; 5. Determine whether any budget amendments are required before the budget is exceeded. o. Budget reports shall show budgeted income and expenses, actual income and expenses along with the percentage of each budget line item received or spent. Budget reports comparing the budgeted revenue and the actual expenditures shall be prepared under the direction of the Chief Executive Officer and presented to the Board of Commissioners at each regular Board meeting. After the Board has reviewed the budget reports, the reports may also be made available to other organizations that the IRHA has agreements with including Doyon, Limited; the U.S. Department of Housing and Urban Development (HUD); and the villages and tribes that have designated the IRHA as their Tribally Designated Housing Entity (TDHE). Financial Policy Page 11 of 12 Schedule of Reports Recipient Distributed Description Prepared by BOC Regular Meeting Board Report Finance Department CEO/Planning Monthly If Active Beginning Balance, Monthly Expenditures, Ending Balance Department Managers Monthly Department Revenue and Expenditure Reports. Including Detailed Monthly Activity Project Managers Bi-Weekly Project Revenue and Expense Reports Finance Department Finance Department Finance Department Financial Policy Page 12 of 12