Financial Controls Policy
FINANCIAL CONTROLS POLICY
Purpose
The purpose of this policy is to establish a comprehensive set of financial controls to ensure the responsible management, security, and integrity of funds within the TOPP KIDS Foundation and TOPP KIDS Out Of School Clubs. These controls aim to prevent fraud, misuse, and mishandling of financial resources, and to provide transparency and accountability in all financial transactions.
Segregation of Duties
To minimize the risk of errors or fraudulent activities, different individuals should be assigned to handle different financial functions. No single individual should be responsible for initiating, authorizing, recording, and reconciling financial transactions.
Two-Person Authorization for Significant Expenditures
All financial transactions, including but not limited to expenditures and purchases by a program using a dedicated MasterCard, that exceed $100 on a single item, must require authorization from two designated individuals. These authorized individuals are the Program Coordinator and Regional Manager creating an additional layer of scrutiny.
All financial transactions, including but not limited to expenditures, reimbursements, and purchases, that exceed $500 must require authorization from two designated individuals. These authorized individuals are the C.F.O. and C.E.O. These authorized individuals are from different departments and roles creating an additional layer of scrutiny.
Authorization Process
For any expense exceeding $500, the individual requesting the expenditure must submit a formal request with supporting documentation to the designated financial authority (C.F.O).
The designated financial authority will review the request and documentation to ensure compliance with budget allocations and organizational policies.
If approved, the financial authority will forward the request to a second designated individual for secondary authorization. Both authorized individuals must sign off on the expenditure before any funds are disbursed or transactions are completed.
Record-Keeping and Documentation
All financial transactions requiring two-person authorization must be adequately documented, including the original request, supporting invoices or receipts, and both authorized signatures. These records should be maintained securely and made available for audit purposes.
Expense requests will be kept on file for a period of 7 years.
Roles and Responsibilities
The Chief Financial Officer (CFO) or designated Finance Manager will serve as the primary financial authority responsible for reviewing and approving financial transactions.
The Chief Executive Officer or designated Support Manager will serve as the secondary financial authority responsible for providing secondary approval for all transactions over $500.
Budget Management
The Foundation and Out Of School Clubs shall maintain and adhere to a detailed annual budget, which includes projected income and expenses. The budget will be periodically reviewed and approved by the Board of Directors or the relevant governing body.
Expense Documentation and Receipts
All financial transactions must be supported by valid and original documentation, such as receipts, invoices, or purchase orders. These documents should be retained and organized systematically for easy access and audit purposes.
Reimbursement Policy
The Foundation and Out Of School Clubs will have a clear reimbursement policy outlining the process for submitting and approving expense reimbursements. Reimbursements should be based on actual and reasonable expenses, adequately documented, and approved by the appropriate authority.
Vendor Management
An approved vendor list should be maintained, and only reputable vendors should be engaged for goods and services. A competitive bidding process may be followed for significant purchases to ensure cost-effectiveness.
Bank Account Oversight
Bank accounts should be reconciled regularly, preferably on a monthly basis, by a designated staff member who is not responsible for handling cash or financial transactions.
Audits and Reviews:
Regular internal and external audits will be conducted to assess the effectiveness of the financial controls, identify potential weaknesses, and ensure compliance with policies and regulations.
Exceptional Circumstances
In rare cases where both designated financial authorities are unavailable to provide authorization due to unforeseen circumstances, the Operations Manager may appoint temporary backup authorizers to ensure essential operations continue. Temporary backup authorizers should be chosen from senior staff members who have a clear understanding of the financial controls and responsibilities.
Confidentiality and Data Security
Financial information, including staff, family, and donor data, will be treated with strict confidentiality. Access to sensitive financial systems and data will be restricted to authorized personnel only.
Communication and Training
All staff members involved in financial transactions should be educated about this policy during onboarding and receive periodic training updates to ensure a clear understanding of their responsibilities. The policy should be made accessible to all relevant personnel.
Adherence to this Financial Controls Policy is vital to maintain the integrity of the TOPP KIDS Foundation and TOPP KIDS Out Of School Clubs, ensuring that all financial activities are conducted with transparency, accountability, and in accordance with established guidelines.
Whistleblower Policy
An anonymous whistleblower policy will be established to allow employees and stakeholders to report any suspected financial misconduct or irregularities without fear of reprisals.
Board Oversight
The Board of Directors or the relevant governing body will actively review and assess the financial controls to ensure they remain effective and in line with the organization’s objectives.
By adhering to this comprehensive set of financial controls, the TOPP KIDS Foundation and TOPP KIDS Out Of School Clubs aim to maintain financial integrity, protect donor trust, and ensure that resources are utilized efficiently to fulfill their mission of providing quality programs and services to the community.