URBAN YOUTH WORKERS INSTITUTE
2011 Internal Monitoring Report
POLICY:
POLICY CATEGORY:
4.5 Asset Protection
Executive Limitations/Parameters
This is my monitoring report on your Executive Limitations policy Asset Protection,
presented in accordance with your monitoring schedule. I certify that the
information contained in this report is true.
CEO Signature: _______________________________________
Date: _______________
This report will monitor the above reference policy starting at its more detailed
provisions.
Policy Wording 4.5.1
The CEO may not fail to insure against theft and casualty losses to at least 80
percent of replacement value and against liability losses to board members, staff,
and the organization itself in an amount greater than the average for comparable
organizations.
CEO Interpretation: This policy is interpreted to mean that insurance on all buildings,
contents, vehicles, and equipment should be insured for at least 80% of replacement
value when practical.
Data: Philadelphia Indemnity Insurance Company insures all buildings, contents and
equipment at the headquarters for 90% of full replacement cost. This coverage
totals $3,000,000. The cost savings of covering at 90% instead of 100% justifies
the lower coverage.
Therefore, I am reporting compliance.
Policy Wording 4.5.2
The CEO will not allow unbonded personnel access to material amounts of funds
without insurance to protect those funds.
CEO Interpretation: This policy is interpreted to mean that receipts and bank deposits
are to be handled only by staff who are covered by insurance bonding.
Data: UYWI has crime limit coverage of $250,000. Petty cash is kept in a locked safe
and only accessed by the Chief Financial Officer and extra key is given to the COO in
case of an emergency. All checks over $500 require two signatures and the CFO is
not a check signer. Over 99% of all deposits carried to the bank are checks payable
to UYWI so there is little risk for fraud.
Therefore, I am reporting compliance.
URBAN YOUTH WORKERS INSTITUTE
2011 Internal Monitoring Report
Policy Wording 4.5.3
The CEO will not subject plant and equipment to improper wear and tear or
insufficient maintenance.
CEO Interpretation: This policy is interpreted to mean that all machinery and building
assets, including the administrative office, training center and warehouse in
Anaheim, CA and the administrative office in Atlanta, GA will be maintained on a
regular and timely basis.
Data: Office equipment copier has an annual service contract and is cleaned and
inspected at least annually by the provider. Computers are repaired by Innovative
Concepts, as needed. An Operation Administer is responsible for building
maintenance (except cleaning). The administrative office is cleaned by the parent
company’s janitorial services.
Therefore, I am reporting compliance.
Policy Wording 4.5.4
The CEO will not unnecessarily expose the organization, its board, or staff to claims
of liability.
CEO Interpretation: This policy is interpreted to mean that UYWI will maintain an
umbrella liability insurance policy to protect all staff and board members acting
within the scope of their duties.
Data: UYWI maintains a policy with the Philadelphia Indemnity Insurance Company
which carries a $3,000,000 umbrella coverage limit. This covers the board and staff
for any legal risk that results from performing their normal duties.
Therefore, I am reporting compliance.
Policy Wording 4.5.5
The CEO will not make any purchase: (a) wherein normally prudent protection has
not been given against conflict of interest; (b) of over $1,000 without having
obtained comparative prices and quality; (c) of over $2,000 without a stringent
method of assuring the balance of long term quality and cost. Orders shall not be
split to avoid these criteria.
CEO Interpretation: This policy is interpreted to mean that UYWI will maintain an
umbrella liability insurance policy to protect all staff and board members acting
within the scope of their duties.
Data: UYWI maintains a policy with the Philadelphia Indemnity Insurance Company
which carries a $3,000,000 umbrella coverage limit. This covers the board and staff
for any legal risk that results from performing their normal duties.
Therefore, I am reporting compliance.
URBAN YOUTH WORKERS INSTITUTE
2011 Internal Monitoring Report
Policy Wording 4.5.6
The CEO may not allow intellectual property, information and files to be exposed to
loss or significant damage.
CEO Interpretation: This policy is interpreted to mean that UYWI must maintain
copyrights on material produced by UYWI staff and retain important permanent
records in a secure environment. Information and files are interpreted to only
include items of historical significance. Offsite electronic backup of donor and
accounting files should be maintained.
Data: UYWI personnel and sensitive archives are maintained in a locked cabinet.
Accounting and donor files are backed up on a monthly basis to a backup server.
Therefore, I am reporting compliance.
Policy Wording 4.5.6.1
The CEO may not neglect to maintain and enforce a document Retention and
Destruction Policy as shown in Appendix II.
CEO Interpretation: This policy is interpreted to mean that UYWI must maintain
copyrights on material produced by UYWI staff and retain important permanent
records in a secure environment. Information and files are interpreted to only
include items of historical significance. Offsite electronic backup of donor and
accounting files should be maintained.
Data: UYWI personnel and sensitive archives are maintained in a locked cabinet.
Accounting and donor files are backed up on a monthly basis to a backup server.
Therefore, I am reporting compliance.
Policy Wording 4.5.7
The CEO may not receive, process, or disburse funds under control that are
insufficient to meet the board-appointed auditor’s standards.
CEO Interpretation: This policy is interpreted to mean that internal control
procedures are in place to assure proper accounting treatment and protection of
UYWI receipts and disbursements. These policies must satisfy the outside auditor’s
requirements.
Data: Maxson Associates have been performing the UYWI audit for over six years
and we have worked with them over time to bring all our processes into compliance
with their recommendations. This year’s management comment letter has been
implemented and all concerns of the auditor have been addressed.
Therefore, I am reporting compliance.
URBAN YOUTH WORKERS INSTITUTE
2011 Internal Monitoring Report
Policy Wording 4.5.7.1
The CEO may not neglect to maintain and enforce compliance with an Expense
Reimbursement Policy as shown in Appendix IV.
CEO Interpretation: This policy is interpreted to mean that internal control
procedures are in place to assure proper accounting treatment and protection of
UYWI receipts and disbursements. These policies must satisfy the outside auditor’s
requirements.
Data: Maxson Associates have been performing the UYWI audit for over six years
and we have worked with them over time to bring all our processes into compliance
with their recommendations. This year’s management comment letter has been
implemented and all concerns of the auditor have been addressed.
Therefore, I am reporting compliance.
Policy Wording 4.5.9
The CEO may not invest or hold operating capital in insecure instruments, including
uninsured checking accounts and bonds of less than AA rating, or in non-interestbearing accounts except where necessary to facilitate ease in operational
transactions.
CEO Interpretation: This policy is interpreted to mean that funds may not be invested
in securities where there is a material risk of losing purchasing power over a long
period of time. It does allow for some investment in equity securities to allow the
portfolio to grow at least at the rate of inflation to maintain purchasing power. This
policy also requires that checking accounts will be interest bearing accounts, except
for small operational accounts where the fees associated with interest bearing
accounts outweigh the potential interest revenue.
Data: All checking accounts are with NCUA insured credit unions, although at any
time it is possible that the total of all accounts would exceed NCUA (similar to FDIC
but for credit unions) limits. The process of collecting money throughout the month
and then disbursing to fields at the end of the month makes this the practical
approach.
UYWI has setup an FDIC unlimited account with Merrill Lynch, which is a Bank of
America Corporation.
Therefore, I am reporting compliance
Policy Wording 4.5.8
The CEO may not endanger the organization’s public image or credibility,
particularly in ways that would hinder its accomplishment of mission.
CEO Interpretation: This policy is interpreted to mean that no actions taken or
internal policies made by the CEO can damage the reputation and good name of
URBAN YOUTH WORKERS INSTITUTE
2011 Internal Monitoring Report
UYWI. It recognizes that the reputation of an organization is perhaps its greatest
asset and the care is to be taken at all times not to endanger that good name, lose
credibility or do anything that would make the progress of the organization towards
its stated mission more difficult.
Data: While internal policies are currently under review, no changes have been
enacted. All changes, if made, will be intentionally filtered through the requirements
of this policy.
Therefore, I am reporting compliance.