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Draft Financial Procedures

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<P CLASS="western" ALIGN=CENTER STYLE="margin-bottom: 0in"><B><SPAN STYLE="font-style: normal"><FONT FACE="Times New Roman, serif">DRAFT<BR></FONT></SPAN>Responsibilities
and Procedures<BR>Finance Committee and Treasurer<BR></B>2/28/2007<BR><BR>
</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Finance Committee
Responsibilities</B> 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Oversees the
Meeting's financial resources and procedures</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. Reports regularly to
the Business Meeting on the Meeting's finances</P>
<P CLASS="western" STYLE="margin-bottom: 0in">3. Proposes the new
annual budget at the November Business Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">4. Oversees the work of
the Treasurer and Collection Team 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">5. Insures that only
those contributions that meet IRS requirements for tax deductions are
acknowledged by the Meeting as tax deductible (see &ldquo;Deductible
Contributions&rdquo; below)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">6. Arranges for annual
internal audits of the Treasurer&rsquo;s and the Collection Team&rsquo;s
records and the Meeting&rsquo;s financial procedures (and external
audits if necessary)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">7. Arranges for
preparation of the annual tax return, if required.</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Treasurer
Responsibilities</B> 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Provides monthly
financial reports to the Finance Committee and provides brief monthly
and full quarterly reports to the Business Meeting; makes the final
annual report to the February Business Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. Writes all checks
and pays all Meeting bills after determining that the funds are
budgeted and the payment has been authorized; (if the Treasurer will
be out of town or otherwise unable to write checks within 30 days,
the Treasurer will arrange with another signer to pay bills, using
checks specifically provided by the Treasurer for this purpose)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">3. Maintains the
Meeting's financial records (bank account records, invoices, and
other expense receipts); maintains a chart of accounts; regularly
backs up any electronic files of financial records 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">4. With the assistance
of the internal auditors, closes out by March 15 the expenditure and
revenue accounts for the previous fiscal year (all older records
should be stored at the Meeting House in case of an IRS audit)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">5. Manages the cash
held by the Meeting, insuring that there is sufficient cash available
in the checking account (typically less than $) to pay bills, and
that excess cash is kept in interest-bearing accounts</P>
<P CLASS="western" STYLE="margin-bottom: 0in">6. Maintains the
accounts for all restricted Funds, and writes disbursement checks on
request from their respective oversight committees or the Business
Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">7. Obtains a Form W-9
from each unincorporated contractor providing services and submits a
Form 1099-MISC for any contractor paid over $600 in the fiscal year. 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Collection Team
Responsibilities</B> 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">The Finance Committee
designates two persons &ndash; preferably members of the committee --
to be the Collection Team. Other members of Finance or the Meeting
serve as backup when one or both members of the Collection Team is
absent from Meeting. When a member of the Collection Team is unable
to be at Meeting, they should notify the other team member in advance
so that arrangements can be made with the backup members of the
Finance Committee to help with the collection. The Collection Team:</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Manages all aspects
of collecting and depositing contributions to the Meeting and
maintaining the weekly collection records</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. Informs members and
attenders about making donations -- for example, where to leave cash,
where to mail checks, how to earmark contributions, how to initiate
automatic bank payments, and which contributions are tax-deductible
(see &ldquo;Deductible Contributions&rdquo; below)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">3. Records cash and
check donations collected at Meeting each Sunday, including Guest
Apartment and Meeting House use receipts, in a Weekly Collection
Record showing the amount of donations by purpose (i. e.,
unrestricted or restricted categories, such as Sufferings)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">4. Checks from donors
are recorded on the Weekly Collection Record by the check signer&rsquo;s
name and purpose of the donation</P>
<P CLASS="western" STYLE="margin-bottom: 0in">5. Cash from identified
donors is recorded by the donor&rsquo;s name on the Weekly Collection
Record</P>
<P CLASS="western" STYLE="margin-bottom: 0in">6. Each Collection Team
member counts the collection separately and signs the Weekly
Collection Record 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">7. The Weekly
Collection Record is sent to the Donation Recorder, who maintains
them until the annual audit has been conducted</P>
<P CLASS="western" STYLE="margin-bottom: 0in">8. The bank deposit is
prepared and made ASAP; the deposit may be mailed if no cash is
involved</P>
<P CLASS="western" STYLE="margin-bottom: 0in">9. All money received
during December and early January should be deposited, recorded, and
reported to the Treasurer by January 15 to facilitate the year end
closing of accounts</P>
<P CLASS="western" STYLE="margin-bottom: 0in">10. Donations received
before January 1 &ndash; including checks mailed before January 1 but
received after the new year begins -- are recorded as being made by
the end of the year; donations received or mailed on or after January
1 are recorded as made in the new year (this is an IRS requirement
for acknowledgments) 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Donation Recorder
Responsibilities</B> 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Using the Weekly
Collection Record, records all donations in the DONATION program</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. Notifies the
treasurer of the deposits in the Operating and Maintenance Fund
accounts</P>
<P CLASS="western" STYLE="margin-bottom: 0in">3. Provides an annual
report to each contributor by email unless the contributor requests a
paper acknowledgment (the IRS accepts email acknowledgments and
requires documentation only for contributions over $250, but the
Meeting has decided to acknowledge all identifiable donations)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">4. Maintains both
copies of the Weekly Collection Record until the annual audit has
been conducted</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Trustee
Responsibilities</B></P>
<P CLASS="western" STYLE="margin-bottom: 0in">The trustees:</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Authorize all
Meeting bank accounts and signers</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. Maintain records for
Meeting bank accounts, records for the Meeting House, and the
liability and property insurance for the Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Timeline for Finance
Committee and the Treasurer:</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Reports</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Treasurer prepares
Quarterly Reports for the quarter ending in March, June, September,
December</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Treasurer and Finance
Committee prepare End of the Year Report and closing of the years&rsquo;
books in January</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. Budget</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Finance Committee
contacts committees with budgets in early September for budget
requests for the next fiscal year</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Final Review by Finance
Committee at October committee meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">1st reading at November
Business Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2nd reading at December
Business Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">3. Letter of
acknowledgment and thanks sent by January 31 to all contributors to
Meeting</P>
<P CLASS="western" STYLE="margin-bottom: 0in">4. Annual Audit</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Assemble audit
committee in January</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Review books in
February</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Final report of audit
committee to Finance in March</P>
<P CLASS="western" STYLE="margin-bottom: 0in">5. Contributions to
Quaker and Non Quaker Organizations</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Overall total
determined in budget</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Decision by Business
Meeting on recipients and amounts in February</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Checks written
quarterly: March, June, September, December</P>
<P CLASS="western" ALIGN=CENTER STYLE="margin-bottom: 0in"><B>Financial
Procedures and Records</B> 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Overview</B></P>
<P CLASS="western" STYLE="margin-bottom: 0in">The Meeting uses the
calendar year as its fiscal year. It uses cash basis accounting and
?? for bookkeeping. All cash receipts and disbursements are recorded
in ??.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">All receipts are
credited to the fiscal year in which they are received and recorded
by the Collection Team, no matter when they are deposited. All
disbursements are made by check, and no petty cash fund is used. No
presigned checks or checks made out to &ldquo;cash&rdquo; are
allowed.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Meeting receipts are
initially recorded in the Weekly Collection Record (maintained by the
Collection Team). 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Checking and Money
Market Accounts - all Meeting funds (including restricted funds) are
kept in the ?? checking and money market accounts. All accounts
require only one signature to withdraw funds. Authorized signers are
indicated by an X in the chart below. Our policy is to avoid a single
person having access to all Meeting accounts.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Cash Management &ndash;
The treasurer maintains sufficient cash in the checking account to
cover anticipated expenses, normally no more than $. The remaining
cash is kept in MM accounts or CDs. 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Restricted Funds &ndash;
The Meeting has established a number of funds for specific purposes
(see the Chart of Meeting Accounts). These restricted funds are
assumed to have an indefinite life, so the balance in a fund at the
end of the fiscal year is carried over into the new fiscal year.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Disbursements and
Invoices - All payments are normally made against a written request
for reimbursement invoice, if available. Invoices are filed
chronologically, and by year, with the check number and date noted on
the invoice. See also &ldquo;Open Accounts.&rdquo;</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Open Accounts - Certain
persons make purchases from these accounts and the Treasurer receives
the monthly bills:</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Annual Tax Return - As
a church we are not required to file a Form 990 tax return (see
Publication 1828 (Rev. 7-02), Tax Guide for Churches and Religious
Organizations). However, if the Meeting has more than $1,000 of
&ldquo;unrelated business income,&rdquo; we must file a 990T.
According to the IRS definition, the money we receive for the Guest
Apartment and use of Meeting House is not considered unrelated income
(see &ldquo;Sec. 513. Unrelated trade or business&rdquo; of IRS
rules). The IRS advises that tax-related records should be kept for
&ldquo;at least four years&rdquo; after filing the tax return.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">The IRS requires that
we maintain income, expense, and payroll records for at least four
years.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Insurance &ndash; The
Meeting has a church property and liability policy with 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Investments &ndash; The
Meeting currently has no investments.</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Purchasing and
Reimbursement</B></P>
<P CLASS="western" STYLE="margin-bottom: 0in">1. Each committee with
a budget will designate a person to authorize expenditures and notify
the Treasurer (there could be more than one person if the committee
believes they need that flexibility, but the committee must let the
Treasurer know who has the authority). That authorized person will be
given a supply of tax-exemption forms to give to vendors (the
Treasurer will not reimburse any tax paid) and payment authorization
forms.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">2. To get a
reimbursement or have an invoice paid, the authorized person would
sign and send to the Treasurer a payment authorization form showing
to whom to make out the check, where to mail it, and what budget
category to charge. The authorized person would either attach an
invoice to the form or state on the form that an invoice is not
available (submitting the form without an invoice should be a rare
exception). You can also scan the invoice into a file and email it
and the required information to the Treasurer.</P>
<P CLASS="western" STYLE="margin-bottom: 0in">3. If the vendor mails
the invoice, it should be sent to the attention of the committee
authorizer, so we will know who to give the invoice to. 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">4. When the purchase is
made on an open account -- such as ?? -- the authorized person should
immediately send the Treasurer the payment authorization form with
the information he'll need to pay the monthly invoice. (The Treasurer
will also accept an email message that has the required information.)</P>
<P CLASS="western" STYLE="margin-bottom: 0in">5. The Treasurer will
have two weeks after receiving a payment authorization to write and
mail a check. Persons who need reimbursements or payments more
quickly -- such as a deposit for contracted services -- would need to
arrange it with the Treasurer in advance. However, advance
arrangements shouldn't become routine, as special arrangements
increase the burden on the Treasurer.</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Deductible
Contributions</B></P>
<P CLASS="western" STYLE="margin-bottom: 0in">IRS Publication 526
describes deductible and non-deductible contributions, as well as
requirements for documentation.</P>
<P CLASS="western" STYLE="margin-bottom: 0in"><B>Meeting Policy on
Tax-Deductible Solicitations</B> 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">The IRS provides this
advice on contributions, which applies to any Meeting benevolence
project: &rdquo;You cannot deduct contributions to specific
individuals, including: 
</P>
<P CLASS="western" STYLE="margin-bottom: 0in">Contributions to
individuals who are needy or worthy. This includes contributions to a
qualified organization if you indicate that your contribution is for
a specific person. But you can deduct a contribution that you give to
a qualified organization that in turn helps needy or worthy
individuals if you do not indicate that your contribution is for a
specific person. Example: You can deduct contributions earmarked for
flood relief, hurricane relief, or other disaster relief to a
qualified organization. However, you cannot deduct contributions
earmarked for relief of a particular individual or family.&rdquo;</P>
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