Fiscal Policy and Accounting Procedures
Source: Literacy Volunteers of America in Burlington County
FISCAL POLICY
The purpose of a fiscal policy is to collect and protect the cash assets of the organization. For proper
internal control of these assets, procedures are hereby set forth to approve and account for their proper
use, and to establish an audit trail. An audit shall be conducted of all cash assets shortly after the end of
each fiscal year by an audit team appointed by the Board of Directors as recommended by the Finance
Committee.
ACCOUNTING PROCEDURES
Procedures are hereby set forth for proper accounting for the following cash receipts and disbursements:
A. Petty Cash Fund
B. Cash Receipts
C. Purchase Requests
D. Accounts Payable
E. Payroll
F. Records Retention
A. Petty Cash Fund
1. A petty cash fund of $100.00 has been established for nominal regular purchases such as
postage, office supplies, refreshments, and so on.
2. This fund should be administered by the Project Coordinator, who provides for its security in the
office and maintains a ledger of receipts and expenditures. This fund shall be maintained by
reimbursements from the Controller as necessary. The reimbursements shall be made by checks
drawn by the Controller against detailed receipts for all expenditures and made payable to the
petty cash custodian (Project Coordinator) who will cash them to restore the fund to $100.00.
3. The petty cash fund may be subjected to surprise counts by the Controller occasionally, and shall
be audited annually in conjunction with the annual audit.
B. Cash Receipts
1. Cash receipts, including checks, shall be channeled into the organization office and received by
the Project Coordinator who enters the date, amount, check number (if any), source and nature
into a receipts ledger.
2. At least twice each month, all cash and check receipts shall be submitted to the Controller who
shall reconcile the submission with the receipts ledger, categorize and record each receipt in
accordance with the chart of accounts and promptly deposit the total in the organization’s
checking or savings account.
3. Monthly, the Controller shall submit to the Treasurer the records of receipts and disbursements,
in accordance with the chart of accounts, together with a copy of reports of interest paid or
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accrued, from which the Treasurer shall make a monthly financial report to the organization’s
Board of Directors.
4. The disbursements records mentioned above, are further discussed below.
C. Purchase Requests
1. Proposed disbursements over $50.00 which are not provided for in the budget shall be preceded
by a Purchase Request, prepared by the appropriate Committee and submitted for approval by
the Committee Chairperson, to the Project Coordinator who will log it in, assign a number and
make two copies of it. One copy is returned to the originating Chairperson, the second is
forwarded to the Chairperson of the Financial Committee.
2. As expeditiously as possible, the Finance Committee shall take action to approve or deny the
Purchase Request. If approved, the Purchase Request shall be so marked and forwarded via the
Project Coordinator to the originating Chairperson, who shall place the order for the services or
item and return the Purchase Request to the Project Coordinator pending receipt of the item or
service and invoice(s). At that time, a copy of the Purchase Request shall be given to the
Controller.
3. If the Purchase Request is denied, the Chairman of the Finance Committee shall sign it and
indicate thereon the reason(s) for denial.
4. Upon receipt of ordered item or services, the originating Chairperson shall reconcile the invoice
with the Purchase Order, and signify satisfaction for payment by the Controller, as discussed
under Accounts Payable, below.
D. Accounts Payable
1. Invoices, requests for reimbursement and other bills shall be presented for payment with the
appropriate approvals and attachments to the Controller.
2. Payments shall be made by the Controller using checks drawn from the operating checking
account, and entered with the appropriate chart of accounts identification code in the Controller’s
disbursements record.
3. To assist in auditing, all vendor invoices shall be filed chronologically by the Controller in the
office central files.
E. Payroll
1. All salaries and benefits must be approved by the Board of Directors prior to employment or the
effective date of any change.
2. Periodic checks by the Finance Committee should confirm that rates being paid are within the
approved budget amounts.
3. Payroll deductions for federal and state tax agencies are to be paid in a timely manner, to the
proper places, within prescribed payment periods and using the proper forms to avoid needless
penalties, interest or other problems.
4. Payroll and payroll tax records are to be reconciled quarterly to enable the timely, accurate
preparation of all quarterly and annual tax returns.
F. Records Retention
1.
The Controller’s records of receipts and disbursements, the Project Coordinator’s receipts ledger
and paid invoices shall be retained for a minimum of seven (7) years.
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