Policies and Procedures

Revision A

 NAAA Executive Board Approved

11 November 2017

Nashua Area Artists Association (NAAA)

POLICIES AND PROCEDURES

Table of Contents

The Executive Board is responsible for the creation, maintenance and updates to the NAAA Policy Manual. The NAAA Policy Manual can be changed by a majority vote at any Executive Board meeting after notification of board members of the proposed changes.

Accounting

  • Division of Responsibilities
  • Executive Board
  • President
  • Treasurer
  • Bookkeeper
  • Chart of Accounts and General Ledger
  • Cash Receipts
  • Inter-Account Bank Transfers
  • Cash Disbursements & Expense Allocations
  • Credit Card Policy and Charges
  • Bank Account Reconciliations
  • Petty Cash Fund
  • Operating Reserve
  • Property and Equipment
  • End of Month and Fiscal Year-End Close
  • Financial Reports
  • Fiscal Policy Statements
  • Payroll Processing
  • Audit

Americans with Disabilities Act (ADA) Policies

  • Accessibility Coordinator

Nashua Area Artists’ Association Policies and Procedures

The Executive Board is responsible for the creation, maintenance and updates to the NAAA Policy Manual.  The NAAA Policy Manual can be changed by a majority vote at any Executive Board meeting after notification of board members of the proposed changes.

Procedures shall be created that details specific operations performed by the Board, Committees and Members. These procedures are added to the NAAA Policy and Procedures Manual and may be updated as required.

Accounting

The purpose of this manual is to describe all accounting policies and procedures currently in use at Nashua Area Artists Association and to ensure that the financial statements conform to generally accepted accounting principles; assets are safeguarded; guidelines of granters and donors are complied with; and finances are managed with accuracy, efficiency, and transparency.

All NAAA’s staff with a role in the management of fiscal and accounting operations are expected to comply with the policies and procedures in this manual.

These policies will be reviewed annually and revised as needed by the staff and approved by the Board of Directors.

Division of Responsibilities

The following is a list of personnel who have fiscal and accounting responsibilities:

Executive Board

  • Reviews and approves the annual budget.
  • Reviews annual and periodic financial statements and information.
  • Two members of the board will be appointed by the board to be authorized signers on the bank accounts.
  • Reviews and approves all contracts over $500.00.
  • Reviews and approves all non-budgeted expenditures over $500.00.
  • Reviews and advises staff on internal controls and accounting policies and procedures.
  • Appoints the NAAA audit team for annual internal audits.
  • Determines whether the organization should have an external CPA review of NAAA or an external audit. If so, chooses and contracts with the auditor.

President

  • Reviews and approves all financial reports including cash flow projections.
  • Sees that an appropriate budget is developed annually.
  • Reviews and signs all issued checks and/or approves check signing procedures.
  • Reviews and approves all contracts under $500.00.
  • Reviews and approves all grant submissions.
  • Approves inter-account bank transfers.
  • In on-site signatory for all bank accounts.
  • Opens all bank statements, reviews for any irregularities, and reviews completed monthly bank reconciliations.
  • Oversees the adherence to all internal controls.

Treasurer

  • Approves all program expenditures.
  • Requests Board approval of unbudgeted expenditures more than $500.00.
  • Monitors program budgets.
  • Reviews all payrolls and is responsible for all personnel files.
  • Reviews and manages cash flow.
  • Reviews and approves all reimbursements and fund requests.
  • Processes all inter-account bank transfers.
  • Assists Executive Director with the development of annual and program budgets.
  • Reviews all incoming and outgoing invoices.
  • Manages the petty cash fund.
  • Receives and opens all incoming accounting department mail.
  • Monitors and manages all expenses to ensure most effective use of assets.
  • Monitors grant reporting and appropriate release of temporarily restricted funds.
  • Oversees expense allocations.
  • Monitors and makes recommendations for asset retirement and replacement.
  • Reviews, revises, and maintains internal accounting controls and procedures.
  • Initiates donor thank you letter acknowledgements.
  • Reviews all financial reports.

Bookkeeper

  • Overall responsibility for data entry into accounting system and integrity of accounting system data.
  • Processes invoices and prepares checks for signature.
  • Makes bank deposits.
  • Processes payroll.
  • Maintains general ledger.
  • Prepares monthly and year-end financial reports.
  • Reconciles all bank accounts.
  • Mails and distributes payments for budgeted expenditures.
  • Make payments for Board approved unbudgeted expenditures.
  • Manages Accounts Receivable.

Chart of Accounts and General Ledger

NAAA has designated a Chart of Accounts specific to its operational needs and the needs of its financial statements. The Chart of Accounts is structured so that financial statements can be shown by natural classification (expense type) as well as by functional classification (program vs. fundraising vs. administration). The Treasurer is responsible for maintaining the Chart of Accounts and revising as necessary. The Chart of Accounts is attached to this manual as an addendum.

The general ledger is automated and maintained using our accounting software. All input and balancing is the responsibility of the bookkeeper with final approval by the Treasurer.

The Treasurer should review the general ledger on a periodic basis for any unusual transactions.

Cash Receipts

Cash receipts generally arise from:

  • Contracts and Grants
  • Direct donor contributions
  • Fundraising activities/events
  • ArtHub Sales/workshops/classes

The principal steps in the cash receipts process are:

The Gallery Sitter receives incoming mail and forwards it unopened to the President. The President opens, date stamps, and distributes the mail. The Treasurer enters all checks into a log, stamps all checks “for deposit only,” and makes two (2) copies of each check. The checks are kept in a locked cabinet until handed to the bookkeeper for processing and deposit.

Weekly (or more often if necessary), the Treasurer submits the following to the Bookkeeper for processing: the endorsed checks, the deposit logbook, and the correct account allocation for each deposit. The Bookkeeper processes the deposit and takes it to the bank for deposit. A copy of the deposit slip is attached to the deposit. The deposits are put in a file to attach to the bank statement. The deposit log book is returned to the Treasurer.

All cash received will be counted, verified, and signed off by the Treasurer and another available staff member. The cash will immediately be posted using the appropriate allocation. A receipt will be given to the paying party and a copy kept for internal purposes. The cash will be kept in a locked, secure location and deposited within a week.

Inter-Account Bank Transfers

The Treasurer monitors the balances in the bank accounts to determine when there is a shortage or excess in the checking account. The Treasurer recommends to the President when a transfer should be made to maximize the potential for earning interest. The Bookkeeper is directed in writing when to make a transfer and in what amount. A copy of the transfer is given to the Treasurer.

Cash Disbursements & Expense Allocations

Cash disbursements are generally made for:

  • Payments to vendors for goods and services
  • Taxes/license fees
  • Memberships and subscriptions
  • Meeting expenses
  • Member reimbursements
  • Marketing/promotional materials

Checks are processed weekly. Invoices submitted to the Treasurer will be processed and paid weekly. Checks can be prepared manually within one day, but this should be limited to emergency situations.

Requests for cash disbursements are submitted to accounting in three ways:

  • Original invoice
  • Purchase request (submitted on approved form)
  • Member expense report or reimbursement request

All invoices must have the account code written on them and approved by the Treasurer prior to being submitted to Bookkeeper.

Every member reimbursement or purchase request must be documented on the approved form with receipts, program allocation, and funding source (if applicable) before approving for reimbursement as follows:

Other Expenditures – a receipt from the vendor detailing all goods or services purchased and the specific purpose.

The Treasurer reviews all requests for payment and:

  • Verifies expenditure and amount
  • Approves for payment if in accordance with budget
  • Requests Board approval of unbudgeted items in excess of $500.00.
  • Provides or verifies appropriate allocation information
  • Provides date of payment taking into account cash flow projections
  • Submits to the Bookkeeper for processing/

The Bookkeeper processes all payments and:

  • Immediately enters them into the Accounts Payable module
  • Prints checks according to allocation and payment date provided by the Operations Manager
  • Submits checks, with attached backup documentation, to President for approval and signature. All checks in excess of $500.00 require a second signature from an authorized board or staff member; checks in excess of $1000.00 must be authorized by the Board of Directors
  • Stamps invoice “paid”
  • Mails checks and appropriate backup documentation
  • Files all backup documentation in the appropriate file

Credit Card Policy and Charges

Credit Cards will be issued in the name of the NAAA Board member or employee. Credit Cards will have a credit limit of $1,000.

All staff members who are authorized to carry an organization credit card will be held personally responsible in the event that any charge is deemed personal or unauthorized. Unauthorized use of the credit card includes: personal expenditures of any kind; expenditures which have not been properly authorized; meals, entertainment, gifts, or other expenditures which are prohibited by budgets, laws, and regulations, and the entities from which NAAA receives funds.

The person issued the credit card is responsible for its protection and custody, and shall immediately notify the credit card company and the President if it is lost or stolen.

The person issued the credit card must immediately surrender the card to the current NAAA President or Vice President when affiliation with the NAAA has ended

The receipts for all credit card charges will be given to the Treasurer within two (2) weeks of the purchase along with proper documentation. The Treasurer will verify all credit card charges with the monthly statements. A record of all charges will be given to the Bookkeeper with applicable allocation information for posting. A copy of all charges will be attached to the monthly credit card statement when submitted to the President for approval and signing.

The President’s credit card usage will be provided to the Board Chair and the Board Treasurer. Only Credit Cards will be authorized.

Bank Account Reconciliations

  • All bank statements are given unopened to the Treasurer. The Treasurer reviews the statements for unusual balances and/or transactions.
  • The Treasurer gives the statements to the Bookkeeper for timely reconciliation as follows: a comparison of dates and amounts of deposits as shown in the accounting system and on the statement, a comparison of inter-account transfers, an investigation of any rejected items, a comparison of cleared checks with the accounting record including amount, payee, and sequential check numbers.
  • The Bookkeeper will verify that voided checks, if returned, are appropriately defaced and filed.
  • The Bookkeeper will investigate any checks that are outstanding over six months.
  • The Bookkeeper will attach the completed bank reconciliation to the applicable bank
  • statement, along with all documentation.
  • The reconciliation report will be reviewed, approved, dated, and initialed by the Treasurer.

Petty Cash Fund

Petty cash funds are maintained by the organization. The funds are to be used for miscellaneous or unexpected purchases and the same approval procedures apply as mentioned in the cash disbursement section.

  • The petty cash fund will not exceed $50.00 and is kept in a locked file
  • The Treasurer oversees the petty cash fund.
  • All disbursements made from petty cash are acknowledged in writing by the receiving party.
  • All money returned to the petty cash fund is counted and verified by the Treasurer and another staff member. Receipts for items purchased with petty cash must be included with the return and should include appropriate account allocations as well as supervisor approval.
  • The Treasurer and the Bookkeeper together will periodically count the cash in the petty cash fund.
  • No checks will be cashed by the petty cash fund.

Operating Reserve

Property and Equipment

Property and equipment includes items such as:

  • Office furniture and equipment
  • Computer hardware
  • Computer software
  • Leasehold improvements

It is the organization’s policy to capitalize all items which have a unit cost greater than one thousand dollars ($1,000). Items purchased with a value or cost less than one thousand dollars ($1,000) will be expensed in the period purchased.

  • A Fixed Asset Log is maintained by the Bookkeeper including date of purchase, asset description, purchase/donation information, cost/fair market value, donor/funding source, identification number, life of asset.
  • The Log will be reviewed by the Treasurer.
  • Annually, a physical inspection and inventory will be taken of all fixed assets and reconciled to the general ledger balances.
  • The Treasurer shall be informed in writing of any change in status or condition of any property or equipment.
  • Depreciation is recorded at least annually. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Any impaired assets discovered during the inventory will be written down to their actual value.

End of Month and Fiscal Year-End Close

  • The Treasurer will review and sign off on all month- and year-end journal entries. They will be printed and filed for audit trail purposes.
  • At the end of each month and fiscal year end, the Treasurer will review all balance sheet accounts including verification of the following balances: cash accounts match the bank reconciliations, fixed assets accounts reflect all purchases, write-downs and retirements, accounts receivable and payable accounts match outstanding amounts due and owed.
  • The income and expense accounts review will include reconciliation to amounts received and expended and verification that payroll expenses match the payroll reports including federal and state payroll tax filings.
  • Once the final monthly and fiscal year-end financial statements are run, reviewed, and approved by the Treasurer and President, no more entries or adjustments will be made into that month or year’s ledgers.
  • At the end of the fiscal year, the Treasurer or outside CPA will prepare the annual Return for Organization Exempt from Income Tax (IRS Form 990). The return will be presented to the Board of Directors for their review and approval. The Treasurer will then file the return with the Internal Revenue Service by the annual deadline.
  • All other appropriate government filings including those required by the state tax board and attorney general’s office will be completed and filed with the appropriate agency.

Financial Reports

The Bookkeeper will prepare the monthly and annual financial reports for distribution to the Board of Directors. The reports will include: balance sheet, statement of income and expenses, report for each program which has an established budget, and any other requested reports.

Periodic and annual financial reports will be submitted to the Finance Committee and Board of Directors for review and approval.

Audited financial reports will be provided to the Resource Development Director when required in the application of grants.

Fiscal Policy Statements

  • All cash accounts (except petty cash) owned by NAAA will be held in financial institutions which are insured by the FDIC. No bank account will carry a balance over the FDIC insured amount.
  • All capital expenditures which exceed one thousand dollars ($1,000) will be capitalized.
  • Employee or public personal checks will not be cashed through the petty cash fund.
  • No salary advances will be made under any circumstances.
  • Reimbursements will be paid upon complete expense reporting and approval using the official NAAA form. Reimbursements to the President will be authorized by the Board Vice-President
  • Any donated item with a value exceeding ($50) will be recorded and a letter acknowledging the
  • donation will be sent to the donor within two weeks of the receipt of the donation.
  • All volunteer time shall be recorded as in-kind donations.
  • The President and Treasurer are the signatories on NAAA’s bank accounts. Checks over
  • $500.00 require approval from the Board of Directors.
  • Bank statements will be reconciled monthly. All bank statements will be given unopened to the Treasurer for review.
  • Correction fluid and/or tape will never be used in preparing timesheets or any accounting documents.
  • Accounting and personnel records will be kept in locked file cabinets in the finance office and only parties with financial and/or HR responsibility will have access to the keys.

Payroll Processing

  • Timesheets are to be prepared by all staff on the approved form and submitted weekly on Friday, the timesheets are to be submitted the day prior to the weekend or holiday. Exceptions to the submittal date may occur and will be communicated accordingly.
  • Timesheets are to be kept on a daily basis and completed in ink – unless prepared electronically.
  • Any corrections to timesheets are to be made by making a single line through the error and writing in the correction. Correction fluid and/or tape are not allowable.
  • Timesheets are to be signed and dated by the employee and the Treasurer for submission.
  • Any changes to the standing information of the payroll register from the prior period including addition of new employees, deletion of employees, or changes in base pay rate must be accompanied by an Employment Information Form and signed by the President before the change can be made.
  • The Bookkeeper will process payroll in a timely manner and record vacation time, holiday
  • hours, sick time, and any other information deemed necessary to properly reflect time worked.
  • Paychecks will be distributed by the Treasurer on the following Friday
  • If the employee requests that his/her check be turned over to a third party, the request must be made in writing prior to distribution.
  • The Treasurer will review payroll expenditures and allocations monthly.
  • All quarterly federal and state payroll reports will be prepared and filed appropriately.
  • All W-2 statements are issued to employees prior to January 31st of the following year for the prior calendar year.

Audit

  • An NAAA Audit team will conduct a yearly audit of the NAAA financial records and provide a report to the members summarizing the audit results including a list of any recommendations to the Executive Board. The report should include-A statement of findings and recommendations. An auditor’s certificate as follows:

Nashua Area Artists’ Association

60 Main Street – Suite 300

Nashua, NH 03060

We have examined the financial records for fiscal year——-. Our examination was made in accordance with instructions given in the NAAA Policy and Procedures Manual and included such tests of the accounting records and such other auditing procedures as we consider necessary.

In our opinion, the attached statement of receipts and disbursements fairly set out the financial position of the organization at (date) and the results of its operations for the year. Signed by the members of the audit team.

  • The NAAA Audit team shall consist of three (3) members elected at the annual meeting, serving for two years. Persons elected to the Audit team should have some knowledge of financial transactions and basic accounting methods. Members shall not be involved with the receiving or disbursing of monies.
  • The Audit team will review the NAAA constitution and by-laws to discover instructions contained in them concerning the handling and use of funds. Review this Policy and Procedures manual regarding the financial program
  • Examine the minutes regarding the adoption of the budget and approving expenditures
  • Examine the financial records including the monthly summary of receipts, disbursements, journal entries, canceled checks, insurance records, property evaluations, bank accounts, and all other financial transactions.
  • Verify deposits and disbursements. Verify the reconciliation of bank statements.
  • The NAAA Audit team will request Executive Board approval of obtaining a CPA review of the NAAA Audit Report or an external CPA audit when required in applying for grants.
  • It is advisable that an external review or audit by a CPA be conducted every 5 years.

Americans with Disabilities Act (ADA) Policies

Accessibility Coordinator

The Nashua Area Artists’ Association will appoint a Executive Board member as its Accessibility Coordinator.

The Accessibility Coordinator will serve as a consultant to the Executive Board and Staff in educating member of the association about access issues, and ensure planning for access is incorporated into all organizational decisions, as needed. The Executive Board and Leaders, with assistance from the Accessibility Coordinator, shall provide leaderships in implementing access throughout the organization.

It is the policy of the Nashua Area Artist’s Association (NAAA) to provide reasonable accommodations for individuals with disabilities who are volunteers, customers or members of the NAAA. If an accommodation is requested by an individual, it will first be reviewed by the ADA/Disability specialist. After the accommodation request is reviewed, the Disability specialist will advise the NAAA board how to respond to the request. If accommodation is decided, then a reasonable accommodation will be provided in a timely and cost-effective manner.