SLA Unit Treasurer
Policy & Procedures Manual

Prepared by: Scott M. Smiley
Last Updated: May 2002

I. BUDGETING

II. CASH MANAGEMENT

III. BANK RECONCILIATION

IV. ASSET MANAGEMENT

V. PURCHASING

VI. ACCOUNTS RECEIVABLE

VII. CASH RECEIPTS

VIII. CASH DISBURSEMENTS

IX. RECORD RETENTION

X. REQUIRED REPORTS

I. BUDGETING

A. Budgeting Overview

Budgeting is an integral part of any organization in that it is concerned with the translation of organizational goals and objectives into financial and human resource terms. Although accounting and budgeting both relate to sources and uses of funds, accounting is concerned with the current and past fiscal events while budgeting is concerned primarily with the future.

A budget should be designed and prepared to direct the most efficient and prudent use of the organization's financial and human resources. A budget is a management commitment to a plan for present and future organizational activities that will ensure survival. It provides an opportunity to examine the composition and viability of the organization's programs and activities simultaneously in light of the available resources.

B. Budgeting Policy

Budgets for all units of the Special Libraries Association are set annually. A list of the major steps along with a timetable and assigned responsibilities in the budget process will be determined by the unit’s board of directors.

The board of directors will review actual versus budget performance at least quarterly. Budget variances will be explained by the treasurer along with any recommendations for corrective action as required.

Changes and revisions to the budget during the year are made through the board of directors.

The board of directors will define the unit's broad goals and mission. They will also decide on annual objectives.

C. Budgeting Procedure

1. Steps of the Budget Process will include:

2. Budget Planning

The officers of the unit will establish guidelines, priorities and assumptions for preparation of the budget. These assumptions will be communicated to all relevant positions within the unit (i.e. bulletin editor, professional development chair, etc.). In addition, procedures and budgeting formats are established and a timetable is developed.

3. Preparation of the Budget

All appropriate levels of management (i.e. bulletin editors, professional development chair, etc.) within the unit will prepare their projections of revenues and expenditures for planned services, projects and programs. The person responsible for the budget preparation will consider historical data along with future growth plans.

Once the budgets are complete, they will be submitted to the board of directors, along with their justifications, for review and approval. The approved budget package will be submitted to the treasurer for consolidation and incorporation into a total organizational budget.

4. Budget Approval

The budget must be approved by the board of directors, who may request revisions as they deem necessary.

5. Budget Revisions

Budget revisions should be infrequent. Budget to actual variances should have explanation as to the deviations as opposed to revising the budget. An example of when a budget should be revised is receipt of a new significant funding source.

D. Budgeting Internal Control

Once the budget is approved, it is up to the appropriate unit officers to implement the budget plan. Monthly variance reports (or at a minimum, every quarter) will be prepared and submitted to the board of directors by the treasurer. Explanations of budget variances will accompany the analysis.

II. CASH MANAGEMENT

A. Cash Management Overview

Cash management centers around who has control of the funds and types of vehicles and methods used for investing current operating cash and reserve funds. Cash management consists of several elements including timely collection of receivables and strategic timing of payments of bills.

B. Cash Management Policy

The treasurer, empowered and authorized by the board of directors, supervises and oversees the investment of the unit’s funds and reports to the board of directors who approve the investment policy and decisions. Specific day-to-day activities are delegated to the Treasurer.

1. Chapters and Divisions may only invest in principal-protected instruments (cash, money markets, Treasury bills, CDs, etc.).

2. All bank accounts must be established in the name of the unit and SLA. Example: "Special Libraries Association, XYZ Unit." The order in the title is important as the banks cross-reference the FEIN to the organization name which is Special Libraries Association.

3. All bank accounts must be established with at least two signatories, not necessarily requiring two signatures for transactions. Note: if the Treasurer is a signatory, two signatures should be required on all checks to maintain effective internal controls.

C. Cash Management

All units of the Special Libraries Association will maintain separate accounts, as necessary, to accommodate the various needs of the unit.

1. Operating Account

The primary operating account provides for routine business check disbursements and all regular deposits from external sources. It should be an interest bearing account, allowing earnings to accumulate on the float from check disbursements.

Operating funds, by nature, will have the greatest volume of activity. Checks written in excess of $500 require two signatures as authorized by the board of directors. Bills will be paid within the legal limits granted by the vendor, but not aged to the point where the unit will develop a reputation for slow paying. Deposits should be made the same day as received, when possible. Additionally, all checks should be restrictively endorsed upon receipt.

2. Designated Funds (i.e. Reserve, Project, Scholarship, etc.)

The first step to creating a designated fund is to determine the design and purpose of such funds. Concrete policies should be adopted and documented as to what the purpose of the fund is, what types of vehicles the funds can be invested in, what their targeted balance is based on, for what purposes can the funds be accessed, etc. Where economically feasible, these funds should be maintained in separate bank or investment accounts.

D. Cash Management Borrowing

Borrowing by any of the units of the Special Libraries Association is strictly prohibited.

E. Cash Management Internal Controls

All movement of funds requires written authorization to the financial institution signed by the board appointed individual(s). These individuals are authorized to commit the unit to purchase and sell investments. A copy of these authorized transfers, plus a copy of the minutes of the Board authorizing specific individuals to make these transactions, will be filed in the investment activity binder.

III. BANK RECONCILIATION

A. Bank Reconciliation Overview

Cash is any organization’s most liquid and most sensitive asset. Therefore, it should be the object of utmost control. A bank reconciliation is a key control factor.

B. Bank Reconciliation Policy

All units of the Special Libraries Association will have a requirement that each cash account must be reconciled on a monthly basis. The reconciliation should be performed by the treasurer.

IV. ASSET MANAGEMENT

A. Asset Management Overview

Fixed assets are physical or tangible assets that are used in the normal operations of the business, that are not held for resale, and that have a useful life of more than one year. These assets are accounted for at a historical cost and all assets, except land, are subject to depreciation.

B. Asset Management Policy

It is the Special Libraries Association’s policy to capitalize all physical assets with a cost in excess of $500 and a useful life of more than one year. Items with acquisition cost of less than $500 and/or a useful life of less than one year are expensed in the year they are purchased.

1. Units should be aware of the Association's "Extra Association Relations Policy" which contains this statement: "An agreement, contract or obligation entered into by any Association unit requires advance approval by the Association's Board of Directors if liability exceeds the unit's available or budgeted funds."

2. These guidelines apply to property (such as office machines, filing cabinets, etc.) having a purchase value exceeding the available or budgeted funds or exceeding $5,000.00.

3. The Assistant Executive Director, Finance and Administration at SLA Headquarters should be informed of the purchase value, the name of the individual responsible for the property, and the address of its location immediately upon receipt of the property. The property should be clearly marked: "Property of the Special Libraries Association, 331 South Patrick Street, Alexandria, VA 22314-3501."

4. Appended to the Annual Financial Statement of the unit should be a property report listing the date of acquisition, the purchase value, the name of the person responsible for their property, and the location of the property.

5. The proper care and maintenance of the property is the responsibility of the unit.

6. When the unit disposes of the property, SLA Headquarters must be informed immediately and any outstanding debt on the property must be discharged by the unit.

7. All Association property will be insured, at the discretion of the Executive Director, by the addition of riders to the insurance policy of the Association. To meet requirements of the insurance company, it is mandatory that the permanent location and the custodian be identified.

C. Asset Management Procedure

1. Establish a Fixed Asset Inventory

All purchased equipment and furniture having a useful life of more than one year and an acquisition cost of $500 or more is covered under this policy. A record of all such assets is to be maintained in a property log showing date of purchase, purchase cost, a complete description of the item (including color, size, model and serial number), and the specific location of the property. All property of Special Libraries Association will be tagged upon receipt and the assigned numbers recorded on all applicable documents pertaining to the property control system.

2. Dispositions

In the event that a fixed asset is sold, scraped, donated, or stolen, adjustments need to be made to the fixed asset listing and property log. If money is received for the asset then this must be reported to SLA headquarters.

3. Year End Inventory

Every year, prior to December 31, an inventory of fixed assets will be conducted to ensure the property log is up to date.

V. PURCHASING

A. Purchasing Overview

A purchasing system and/or approval process should be in place to help facilitate the purchasing of supplies and equipment at the lowest reasonable cost.

B. Purchasing Invoice Approval

Once received, goods will be counted and initialed as received on the delivery ticket and forwarded to the Treasurer for payment.

VI. ACCOUNTS RECEIVABLE

A. Accounts Receivable Overview

Accounts receivable are critical to the cash flow of an organization and require continuous follow-up and attention. Responsibilities should be clearly assigned for billing, collecting and accounting for accounts receivable.

B. Accounts Receivable Policy

Follow up on accounts receivable will be done at the 30, 60, 90, and 120 intervals. After 120 days, customers will be barred from the purchase of any of the associations goods or services until their bill is paid in full.

VII. CASH RECEIPTS

A. Cash Receipts Overview

Cash is the most liquid asset an organization has. Therefore, internal controls should be strongest in this area. As with accounts receivable, continuous attention should be a priority with cash receipts.

B. Cash Receipts Policy

Cash receipts will be monitored very closely, including separation of duties, and reconciliation to the general ledger. Upon opening of the mail, all checks will be immediately restrictively endorsed to the unit.

C. Cash Receipts Processing

1. Checks

All checks will come to the Treasurer for processing as soon as they are received. All checks will be coded to a specific Quicken Category. Checks will be reviewed for date and payee to ensure that the check is made out to the proper organization and that the date will permit the check to be cashed.

2. Cash

If cash is received, it is recorded in a receipt log. The receipt should include the date, what it was received for, who it was received from and the amount.

VIII. CASH DISBURSEMENTS

A. Cash Disbursements Overview

Special Libraries Association strives to maintain efficient business practices and good cost control. A well managed accounts payable function can assist in accomplishing this goal from the purchasing decision through payment and check reconciliation.

The primary objective for accounts payable and cash disbursements is to ensure that:

1. Disbursements are properly authorized

2. Invoices are processed in a timely manner.

3. Vendor credit terms and operating cash are managed for maximum benefits

B. Cash Disbursements Policy

Accounts payable should be processed weekly. Approved and properly coded invoices are selected for payment. All disbursements are reviewed for accuracy by the Treasurer, prior to presenting the checks for signature to the authorized signatories (the President or Chair should always be one of the authorized signatories).

C. Cash Disbursements Processing Vendor Invoices

1. Invoice Processing

All invoices should be routed to the Treasurer for payment. Only original invoices should be processed, unless duplicated copies have been verified as unpaid, by research the vendor records. Each invoice should be coded to the appropriate category.

2. Travel & Expense Reimbursement

In order for these expenses to be reimbursed, a properly executed expense reimbursement form must be submitted. All receipts must be attached to the form and the proper authorization(s) obtained. Note: preprinted expense report forms are available in a variety of formats from most office supply stores.

D. Cash Disbursements Check Preparation

Invoices are aged and selected for payment by due date. Checks are printed, attached to the backup documentation and submitted for signature to the authorized signer(s).

E. Cash Disbursements Void/Stop Payment

1. Voided Checks

Checks may be voided for processing errors. The check should be clearly marked as voided. All voided checks should be kept in a file in numerical order for audit purposes.

2. Stop Payments

Stop payment orders may be issued for checks that are lost in the mail or other valid reasons. Stop payments are processed by telephone instruction and written authorization to the bank by signatories.

F. Cash Disbursements Petty Cash

Disbursements of small amounts of cash may be made from the petty cash fund for minor expenses such as cab fare, or photocopying. A petty cash voucher should be completed and signed by the individual requesting the funds. Vouchers will be initialed by the Treasurer and the cash disbursed. Periodically, the Treasurer will submit a check request equal to the amount of funds disbursed.

G. Cash Disbursements 1099's

Consultants, individuals, or subcontractors who require a 1099 must be documented. This documentation must include their name, address, and taxpayer ID number. A report of all individuals who have received payments over $600 for the year (excluding amounts for expense reimbursements) will be submitted to the Finance Director by the 15th of January each year.

H.Cash Disbursements Internal Control

Internal control over disbursements is best maintained when the authorization, processing, check signing, recording, and bank reconciliation functions are clearly segregated. Persons authorized to approve expenditures will be identified, and threshold limits established or double signature requirements defined. Authorized check signers will never sign blank checks.

IX. RECORD RETENTION

Note: This is a general guide for record retention. Record retention usually varies from state to state and between federal and state jurisdictions. You should therefore consult with your local, state or federal jurisdictions to ensure that you are in compliance. Computerized data should be backed up on a regular basis with copies maintained off site. If records are maintained off site, care should be taken to ensure that the facility is climate controlled to make sure the longevity of the records, either paper or computer media, is maximized.

Records Retention Schedule

X. REQUIRED REPORTS

A. Required Reports Overview

Currently, there are three reports that are required to be filed each year by each unit Treasurer. These reports are the 1) Mid-year Financial Statement, 2) Year-End Financial Statement and 3) List of Individuals Paid Over $600. These reports are required to ensure that all units of the Association are in compliance with all applicable rules and regulations of the Association and various taxing authorities. Additionally, these reports provide headquarters with information needed to complete its tax returns (Federal Forms 990 & 990T).

B. Required Reports Policy

All units of the Association will submit the required reports in a timely and accurate fashion. Effective January 1, 1999, these reports must be submitted using Quicken Software and formats provided by Association Headquarters. The Board of Directors has established a Unit Officer Reporting Requirements Policy that governs the filing of these reports and establishes penalties for failure to file, including the loss of the unit’s allotment and dissolution of the unit. This policy and an acknowledgment form will be sent out each July to all newly elected officers. The Acknowledgment Form must be signed and returned to Association Headquarters by the date specified in the mailing.

C. Required Reports Procedure

1. The following steps should be taken to file the Mid-Year Financial Statement:

2. The following steps should be taken to file the Year-End Financial Statement:

3. The following steps should be taken to file the List of Individuals paid over $600: