Nonprofit Financial Policy Example The Executive Director is authorized to manage Family Advocacy Network (FAN) expenses within the parameters of the over- Financial and Control Policies all approved budget, reporting to the Finance Committee on variances and the reason for Philosophy these variances. The purpose of financial management in the The Board of Directors must approve any use operation of all FAN activities is to fulfill the of the board designated cash reserve fund. mission in the most effective and organization’s efficient manner and to remain accountable to Responsibilities stakeholders, including clients, partners, funders, The Executive Director shall: employees, and the community. In order to Account for donor restricted and board accomplish this, FAN commits to providing accurate designated funds separately from general and complete financial data for internal and external operating funds, and clearly define the use by the Executive Director and the Board of restrictions applicable to these funds. Directors. Report the financial results of FAN Authority operations according to the schedule The Board of Directors is ultimately responsible established by the Finance Committee, but at least quarterly. for the financial management of all activities. The Treasurer is authorized to act on the Board’s behalf Pay all obligations and file required reports in a on financial matters when action is required in timely manner. advance of a meeting of the Board of Directors. Make no contractual commitment for bank The Executive Director is responsible for the loans, corporate credit cards, or for real estate day-today financial management of the leases or purchases without specific approval organization. The Board authorizes the of the Board. Executive Director to hire and supervise staff Record fixed assets with purchase prices and independent consultants, pay bills, greater than $500 as capital assets in receive funds, and maintain bank accounts. accounting records. The Executive Director is authorized to sign Depreciation of capital assets will not exceed checks up to $2,500. Checks for amounts five years for furniture and equipment or three greater than $2,500 shall require the signature years for computer and other technology of the Treasurer or Board Chair. equipment. The Executive Director is authorized to enter Limit vendor credit accounts to prudent and into contracts for activities that have been necessary levels. approved by the Board as a part of budgets or plans. The Board of Directors must authorize Obtain competitive bids for items or services any contracts outside of these parameters and costing in excess of $5,000 per unit. Selection all contracts with a financial value greater than will be based on cost, service, and other $15,000. elements of the contract.
Nonprofit Financial Policy Example Family Advocacy Network (FAN) Financial and Control Policies Philosophy The purpose of financial management in the operation of all FAN activities is to fulfill the organization’s mission in the most effective and efficient manner and to remain accountable to stakeholders, including clients, partners, funders, employees, and the community. In order to accomplish this, FAN commits to providing accurate and complete financial data for internal and external use by the Executive Director and the Board of Directors. Authority The Board of Directors is ultimately responsible for the financial management of all activities. The Treasurer is authorized to act on the Board’s behalf on financial matters when action is required in advance of a meeting of the Board of Directors. The Executive Director is responsible for the day-today financial management of the organization. The Board authorizes the Executive Director to hire and supervise staff and independent consultants, pay bills, receive funds, and maintain bank accounts. The Executive Director is authorized to sign checks up to $2,500. Checks for amounts greater than $2,500 shall require the signature of the Treasurer or Board Chair. The Executive Director is authorized to enter into contracts for activities that have been approved by the Board as a part of budgets or plans. The Board of Directors must authorize any contracts outside of these parameters and all contracts with a financial value greater than $15,000. The Executive Director is authorized to manage expenses within the parameters of the over- all approved budget, reporting to the Finance Committee on variances and the reason for these variances. The Board of Directors must approve any use of the board designated cash reserve fund. Responsibilities The Executive Director shall: Account for donor restricted and board designated funds separately from general operating funds, and clearly define the restrictions applicable to these funds. Report the financial results of FAN operations according to the schedule established by the Finance Committee, but at least quarterly. Pay all obligations and file required reports in a timely manner. Make no contractual commitment for bank loans, corporate credit cards, or for real estate leases or purchases without specific approval of the Board. Record fixed assets with purchase prices greater than $500 as capital assets in accounting records. Depreciation of capital assets will not exceed five years for furniture and equipment or three years for computer and other technology equipment. Limit vendor credit accounts to prudent and necessary levels. Obtain competitive bids for items or services costing in excess of $5,000 per unit. Selection will be based on cost, service, and other elements of the contract.
financial_policy_guidelines_and_example.docx