Internal Fiscal Control Policy and Procedures

1. PURPOSE
The purpose of this procedure is to define the process for the control and disposition of General Ledger, Accounts Payable, Payroll and all other financial transactions.

2. SCOPE
This procedure applies to internal fiscal control matters at Arts Based School as defined by our Policies and Procedures Manual.

3. REFERENCE DOCUMENTS

  • Arts Based Elementary School Policies and Procedures Manual
  • Monthly Bank Statement
  • Employee Payroll Report
  • Employee Absenteeism Record
  • Arts Based Elementary School Monthly Budget Report
  • General Ledger Check Register
  • Payroll Check Ledger
  • Interim Budget Update
  • The Arts Based Elementary School Budget Resolution

4. DEFINITIONS
None

5. RESPONSIBILITIES

5.1    The Board of Directors has general oversight of the school’s fiscal budget.

5.2    The Finance Committee of the Board, in consultation with the Principal, prepares the school’s fiscal budget for consideration and adoption by the Board of Directors.

5.3    The Board Treasurer, Board Chair, and the Finance Committee establish long and short term objectives and recommend priorities.

5.4    The Board Treasurer prepares and presents records for audits and monthly reports.

5.5    The Finance Committee reports on and interprets the current status of the budget to the Board.

5.6    The Principal reports to the Board of Directors, maintains daily oversight of expenses and income. He/she reports to the Board Treasurer any concerns or transactions, present or in the near future, that are out of the school’s routine.

5.7    The Business Manager accounts for expenses and income, makes deposits, keeps accurate ledgers, and informs the Principal of any irregularities. He/she purchases supplies as necessary and approved.

5.8    All employees of Arts Based Elementary School will adhere to the provisions of this procedure.

6. RECORD HANDLING INSTRUCTIONS
All financial records generated from the execution of these procedures will be stored on site at Arts Based Elementary School in accordance with protocol in preparation for the annual audit.

7. PROCEDURES

7.1.    INVOICES

7.1.1    All invoices will be inventoried by the Principal to ensure that all services or products purchased have been received.

7.1.2    All invoices will be reviewed and approved prior to forwarding them to Winston Salem Forsyth County (WSFC) Schools.

  • Invoices of $5000.00 or less will be reviewed and approved by the Principal.
  • Invoices in excess of $5000.00 will require additional review and approval by the Board Treasurer.
  • Review and approval documentation consists of the Principal and/or Board Treasurer’s initials on the invoice.

7.1.3    All reimbursements to employees for purchases or travel will be approved in writing by the Principal prior to submission to WSFC Schools for payment.

  • This written approval must accompany the request for reimbursement.

7.1.4    Invoices will be processed monthly unless emergency dictates otherwise.

7.1.5    A processing schedule for General Ledger activity will be set up with WSFC Schools.

7.1.6    Invoices will be prepared and sent to arrive at WSFC Schools prior to the processing date specified in the General Ledger Schedule.

  • All original invoices, plus bills, coupons, receipts, and envelopes, will be sent.
  • If the school wishes to keep duplicates, they will prepare copies prior to shipment.

7.1.7    WSFC Schools will not process incomplete invoices until the school has sent all appropriate documentation.

7.1.8    WSFC Schools will process invoices based on cash-flow timelines, prepare payments to the appropriate vendors, and then mail the checks to the school for signature and disbursement.

  • An Emergency Check is defined as a payment that, if not paid immediately, would jeopardize the school’s ability to operate.
  • A FAX of the original invoice will be sufficient to begin invoice processing.
  • The original invoice will be forwarded to WSFC Schools as soon as possible.
  • The original invoice will be clearly marked as “Already Faxed” to avert duplicate payment.
  • This procedure is for emergencies only and should not be used on a constant basis.
  • The Board of Directors will be notified by the Principal on a monthly basis if the school is habitually using this emergency protocol.

7.2    PETTY CASH

7.2.1    When approved by the Board, an initial fiscal year petty cash check of $100.00 will be prepared by WSFC Schools and will be made payable to the Principal.

7.2.2    WSFC Schools will set up the Principal as a “vendor” with a discreet vendor number and use only this vendor number for petty cash disbursements.

7.2.3    The Principal will cash the check and place the actual cash funds in a petty cash box.

7.2.4    The Administrative Assistant will oversee the disbursement of petty cash funds.

  • The Petty Cash Log Sheet will be maintained with the petty cash in the cash box.
  • The log sheet will record the initial balance of $100.00.
  • Each petty cash disbursement will be recorded with date, amount, to whom, and for what purpose.
  • A receipt will be returned following each individual expense of petty cash.
  • Each return of unused petty cash transactions will be recorded with the same information.
  • A running balance will be maintained following each transaction.

7.2.5    When the balance in the petty cash fund approaches $50.00 (running balance), the Administrative Assistant will tally up the petty cash receipts and forward them to WSFC Schools for processing in accordance with the processing schedule.

7.2.6    WSFC Schools will properly code the actual expenses and issue a “replacement” check for those expended petty cash funds. This will return the petty cash balance to $100.00.

7.2.7    No later than June 15, the petty cash fund will be reconciled and closed for the fiscal year.

  • All outstanding receipts will be forwarded to WSFC Schools.
  • All remaining cash funds will be deposited back into the bank account and the deposit slip forwarded to WSFC Schools as soon as possible.
  • WSFC Schools will prepare a final petty cash reconciliation spreadsheet and forward it to the Principal for review and approval.

7.3    DEPOSITS

7.3.1    When the school makes deposits to the bank, the school will maintain the deposit slip, check stub, letter, and all other original supporting documents on file at school. Business manager will key deposit transaction into AS400 system.

  • The deposit will be clearly identified as to what the deposit is from (LEA, fundraiser, field trip, donation, lunch money collections, food funds from the state or federal, etc.).

7.4    BANK STATEMENTS

7.4.1    The Board Finance Officer will receive monthly bank statements at school address and review all transactions.

7.4.2    Business Manager will reconcile bank statement in the AS400.

7.5    PAYROLL

7.5.1    Payroll, by far, the most complex and important business function of the school, will be processed once a month.

7.5.2    A processing schedule for payroll activity will be set up with WSFC Schools.

7.5.3    The school will use the Employee Payroll Report when initially assigning an employee to the charter school payroll.

  • The profile will be forwarded to WSFC Schools as soon as all information is available and the Principal and the employee has signed and dated the sheet.

7.5.4    WSFC Schools maintains all employee W-4 or NC-4 information.

7.5.5    The Employee Payroll Change Log will be used for all payrolls to update significant employee information.

7.5.6    The change request paperwork will be prepared by the Business Manager and delivered to WSFC Schools prior to the processing date specified in the Payroll Schedule.

7.5.7    The Employee Payroll Change Log will include, but is not limited to:

  • Hours worked & hourly rate for hourly employees.
  • Days worked & daily rate for daily employees.
  • Changes in pay for salaried employees (days missed, adjustments, etc.).
  • Changes in deductions (health, dental, retirement, etc.).

7.5.8    The Employee Payroll Change Log will include all personnel to be paid on that particular payday.

  • If a person is not to be paid, Business Manager will notify WSFC schools via email that “no check, employment terminated on [date].”

7.5.9    WSFC Schools will process and then submit the payroll to the school for disbursement in sufficient time (normally two working days prior to payday) for the school to make appropriate corrections.

  • Payroll check errors made by WSFC Schools will be corrected immediately.
  • Payroll check errors due to incorrect information from the school will be adjusted on the next payroll.

7.6    There will be no advances of individual pay.

7.7    Due to privacy considerations, Employee Absentee Records will be maintained in the appropriate personnel file at the school.

7.8    REPORTS

7.8.1    WSFC Schools will submit the Arts Based Elementary School Monthly Budget Report to the Board of Directors for its scheduled monthly meeting.

7.8.2    If and when requested, WSFC Schools will present the General Ledger Check Register and the Payroll Check Register to the Board Treasurer and/or Finance Committee to verify that monthly expenditures on the Budget Report match the check registers.

7.8.3    As granted in the Arts Based Elementary School Budget Resolution, the Principal has the authority to reallocate budgeted amounts as specified in the resolution guidelines.

Any excess of those guidelines will be approved by the Board of Directors prior to WSFC Schools adjusting the budget and disbursing funds