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Fiscal Policies and Procedures
Telluride Mountain Village Owners Association, a Colorado nonprofit corporation ("organization")
hereby adopts the following fiscal policies and procedures regarding:
Accounting Procedures
Accounting procedures used by the organization shall conform to Generally Accepted Accounting
Principles ("GAAP") to ensure accuracy of information and compliance with external standards.
Basis of Accounting
Policy:
The organization uses the accrual basis of accounting. The accrual basis is the method of accounting
whereby revenue and expenses are identified with specific periods of time, such as a month or year, and
are recorded as incurred. This method records revenues and expenses without regard to the date of
receipt or payment of cash.
Procedures:
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Throughout the fiscal year, expenses are accrued into the month in which they are incurred .
The books are closed 2 months after month end. The members of the Board of Directors of the
organization ("Board") appointed to the Board Finance, Audit, and Budget committee ("FAB
committee") will be notified of situations involving the posting of expenses and/or income over
$10,000 in aggregate to a closed period, in the case that financial reports have been issued.
At the close of the fiscal year, the above rule is not enforced . All expenses that should be
accrued into the prior fiscal year, are so accrued, in order to ensure that year-end financial
statements reflect all expenses incurred during the fiscal year. Year-end books are closed no
later than 100 days after the end of the fiscal year.
Revenue is recognized when the following two conditions are met:
o Revenue is earned .
o Revenue is realized or realizable.
Journal Entries
Policy:
Journal entries shall be recorded for the following transactions: wire transfers, revenue received for
which there are no invoices, automated payments and fees, depreciation, and closing adjustments. A
reasonable person should be able to determine how the amounts and accounts of the journal entry
were determined from the back-up kept by the organization's Accounting Manager ("Accounting
Manager").
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Procedures:
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Journal Entries shall be posted by the Accounting Manager of the organization before the books
are closed.
The Executive Director shall review all journal entries in a timely manner and provide approval
by initialing and dating.
Bank and Clearing Account Reconciliations
Policy:
All bank statements will be opened and reviewed in a timely manner. Bank and clearing account
reconciliation and approval will occur within 2 months of each month's close.
Procedures:
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All bank statements will be opened, reviewed, and reconciled by the Accounting Manager
before the close of the period .
Once reconciled in NetSuite, the Executive Director will review and approve reconciliation
reports by signing and dating on the front of the document.
Monthly Close
Policy:
The books are closed monthly no later than 2 months following the month end. Year-end books are
closed no later than 100 days after the end of the fiscal year.
Procedures:
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The Accounting Manager w ill perform the following monthly close procedures:
o Record depreciation and amortization .
o Record all revenue in the proper period .
o Make adjusting journal entries for all prepaid accounts.
o Reconcile all bank accounts.
o Reconcile the fixed income and equity investment portfolios and make journal entries.
o Reconcile the Real Estate Transfer Assessments ("RETA") and the RETA Exemption
Applications to the Telluride Consulting reports and report any discrepancies to the
Executive Director.
o Compare Accounts Receivable and Accounts Payable detail to the Balance Sheet.
The Accounting Manager will perform the following yearly close procedures:
o Calculate new depreciation and amortization for upcoming year.
o Check revenue and expense balances and make any necessary adjustments to ensure
recording in the proper periods .
o Reconcile all bank and investment accounts.
o Compare Accounts Receivable and Accounts Payable detail to the Balance Sheet .
o Make any adjusting journal entries after analyzing all major accounts.
o Use NetSuite to close out net income (revenue and expenses) to retained earnings.
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Record keeping
Policy:
Invoices and other important documents will be retained electronically using NetSuite or on the
organization's network. Physical copies can be stored on site for accessibility. Hard copies of bank
statements, signed bank reconciliations, and bank deposits will be retained for 5 years. This policy does
not supersede the Document Retention Policy adopted by the Board in December of 2009.
Procedures:
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Important documents will be uploaded and organized organization's server by the Accounting
Manager and Operation Manager. The server is backed up daily.
The Accounting Manager will insure the destruction of sensitive documents, if needed.
The hard copies of bank statements, signed bank reconciliations, bank deposits, leases, RETA
reconciliations, and other pertinent documents will be kept and secured by the Accounting
Manager.
The organization's accounting software system, NetSuite, backs up the entire accounting system
at their offsite location . This system contains certain scanned documents that are attached to
property and customer files.
Internal Control
Conflicts of Interest
Policy:
All employees of the organization and members of the Board are expected to use good judgment, to
adhere to high ethical standards, and to act in such a manner as to avoid any actual or potential conflict
of interest. A conflict of interest occurs when an employee or Board member has a direct or indirect
financial interest in a contract or transaction relating to the operation of the organization. Both the fact
and appearance of a conflict of interest should be avoided .
Procedures:
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Upon hire, election, or appointment each employee and Board member must disclose all direct
or indirect financial interests that could potentially result in a conflict of interest.
Employees and Board members must disclose any interest in a proposed transaction or decision
that may create a conflict of interest. The disclosure of a conflict of interest may prevent the
employee or Board member from participating in the transaction or decision.
Should there be any dispute as to whether a conflict of interest exists:
o The Executive Director and/or Board shall determine whether a conflict of interest exists
for an employee, and shall determine the appropriate response.
o The Board shall determine whether a conflict of interest exists for the Executive Director
or a member ofthe Board, and shall determine the appropriate response.
This subsection on Conflicts of Interest is supplemental to the TMVOA Amended and Restated
Policies and Procedures Regarding Board Member Fiduciary Duties and Conflicts of Interest
adopted June 19, 2013, as may be amended ("TMVOA Fiduciary and Conflicts Policy"). In the
event of any conflict between this subsection and the TMVOA Fiduciary and Conflicts Policy, the
TMVOA Fiduciary and Conflicts Policy shall control.
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Segregation of Duties
Policy:
The organization's financial duties are distributed among multiple people to help insure protection from
fraud and error. The distribution of duties aims for maximum protection of the organization's assets,
while also considering efficiency of operations and limited personnel.
Procedures:
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Recurring invoices are prepared by the Accounting Manager monthly, quarterly, and annually.
The organization's Operations Manager ("Operations Manager") is responsible for opening and
logging all incoming checks. The Accounting Manager deposits and records all incoming checks.
The Executive Director signs off on the incoming check log, copies of the checks, and the deposit
slips.
The organization has a lockbox service that receives and deposits incoming checks. The lockbox
service provider segregates the receiving and depositing functions . The Accounting Manager
records the deposits using daily reports provided by the lockbox service. No signature is needed
by the Executive Director.
RETA payments are remitted via wire transfer only, received and deposited directly by the bank.
The Accounting Manager records the wire transfers. No signature is needed by the Executive
Director.
Vendor invoices will be opened by the Operations Manager and processed by the Accounting
Manager.
Expense Reports and Cash Advances are prepared and signed by the employee requesting funds.
The Executive Director signs off as the approver. When the Executive Director is submitting an
Expense Report or Cash Advance, a board member will sign off as the approver.
Invoices and Expense Reports are entered into NetSuite by the Accounting Manager. The
Executive Director or a board member signs the checks. For invoices over $5,000, two
signatures are required .
The Accounting Manager initiates the check run every Thursday of the week. If Thursday is a
holiday, the check run will be initiated on an alternative day of the week determined by the
Accounting Manager.
Manual checks are written by the Executive Director, if needed. The Accounting Manager will
record the transaction in NetSuite. Physical checks are maintained by the Accounting Manager.
The Accounting Manager will insure the accurate recording of voided checks in NetSuite.
The Operations Manager is responsible for submitting the biweekly payroll information to My
Pay Solutions for processing. My Pay Solutions sends a report to the Accounting Manager. The
Accounting Manager will review said report, provide approval, and record in NetSuite. Any
discrepancies in payroll will be reported to the Executive Director and My Pay Solutions.
Reconciliations are prepared by the Accounting Manager and signed by the Executive director.
The Accounting Manager performs the monthly and yearly closing of the books. A financial
report for each quarter will be prepared by the Accounting Manager and reviewed by the
Executive Director and Board' s FAB committee.
The Accounting Manager creates leases and invoices the responsibly parties. The Executive
Director reviews all leases.
The Accounting Manager will record liabilities, expenses, and payments in NetSuite.
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The Accounting Manager maintains current and accurate records to ensure correct addresses,
billing density, and rates throughout the year.
FAB committee monitors internal control processes.
FAB committee provides oversight ofthe financial reporting processes and monitors the
financial policies and procedures.
Physical Security
Policy:
The organization maintains physical security of its assets to ensure that only people who are authorized
have physical or direct access to money, securities, and other valuable property.
Procedures:
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Blank checks will be stored, locked up, and accounted for by the Accounting Manager in his/her
office.
NetSuite is password protected to prevent access by unauthorized personnel to the
organization's accounting and property tracking software.
Incoming checks and financial records will be stored and locked up in the Accounting Manager's
office and deposited on a daily basis.
Financial Planning & Reporting
The organization's fin~ncial statements are prepared in accordance with GAAP.
Budgeting Process
Policy:
An annual budget is prepared and approved annually. The budget is prepared by the Accounting
Manager in conjunction with the Executive Director and Board FAB committee. The budget is to be
approved by the Board prior to the start of each fiscal year. The budget is revised during the year only if
approved by the Board.
Procedures:
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The Accounting Manager will work together with the Executive Director to ensure that the
annual budget is an accurate reflection of programmatic and infrastructure goals for the coming
year.
The Accounting Manager and Executive Director shall present a first draft to the Board FAB
committee. Once reviewed, the draft is posted to the organization's website for member
feedback 10 days before the annual budget meeting. The Accounting Manager and Executive
Director shall present the budget to the members at annual members' budget meeting.
The budget shall contain revenues and expenses forecasted annually.
The Board will review and approve the budget at its last meeting prior to the start of the fiscal
year.
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Internal Financial Reports
Policy:
The organization prepares regular financial reports on a quarterly basis. All reports are finalized no
later than 75 days after the end of the prior month.
Procedures:
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The Accounting Manager is responsible for producing the year-to-date financial report
within 75 days of the end of each month . This report shall summarize major financial
information in order to provide a snap-shot to management, the Board, and the
organization's members.
The Executive Director and Board FAB committee review the reports each quarter.
Once reviewed, the report will be posted on the website.
Policy:
An audit ofthe organization will be performed annually by April 30th of the following calendar year.
Procedures:
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The Accounting Manager serves as the liaison to the audit firm.
The audit report will be presented to the Executive Director and Board FAB committee within 30
days of completion of the audit.
Once approved by the Board FAB committee and Executive Director, the audit report will
presented to the full Board.
A RFP shall be performed every 5 years, unless otherwise determined by the FAB committee.
Tax Compliance
Policy:
The organization will have a Form 990 prepared and filed with the IRS by an external accountant by May
15th of the following year. If an extension is filed, the Form 990 can be submitted to the IRS by
November 15th.
Procedures:
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The Accounting Manager serves as the staff liaison to the tax preparer.
The Board FAB committee and Executive Director will review the Form 990 and give final
approval to be filed with the IRS.
The organization's Form 990 will be made available to the public through the organization's
website.
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Quarterly/Annual Payroll Reports
Policy:
The organization has outsourced its payroll tax reporting to My Pay Solutions.
Procedures:
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My Pay Solutions is responsible for preparing W2s by January 31' 1 each year. The Accounting
Manager oversees My Pay Solutions W2 preparation to ensure accuracy and timeliness.
My Pay Solutions files the monthly and quarterly payroll tax reports by the filing deadlines. This
responsibility is also overseen by the Accounting Manager to ensure accuracy and timeliness.
The Accounting Manager will confirm that tax payments are remitted correctly with the IRS.
1099's are prepared and mailed by the Accounting Manager.
Revenue and Accounts Receivable
Invoice Preparation
Policy:
All invoices are prepared in a timely manner to ensure a regular, healthy cash flow for the organization.
Procedures:
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The Accounting Manager uses NetSuite to create all invoices.
Collection efforts are made by the Accounting Manager on a monthly basis.
The Accounting Manager handles all incoming billing inquiries.
As part of the monthly close process, the Accounting Manager reviews the Accounts Receivable
Aging report. Interest and penalties are charged and notices are sent per the current
organization's adopted, current collections policy.
Outstanding invoices over 180 days may be written off as bad debt with the approval of the
organization's attorney and the Executive Director. If a legal action is approved, the organization
will delay writing off bad debt until such time as deemed uncollectable.
Property Lease Management
Policy:
All property leases will be generated, maintained, and revised as needed, in compliance with applicable
laws and regulations.
Procedures:
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The Accounting Manager negotiates, prepares, and signs all property leases with the approval of
the Executive Director.
The Accounting Manager ensures compliance with lease terms and conditions. In addition, the
Accounting Manager monitors all renewal dates, rate increases, and reporting requirements .
The Accounting Manager handles all billings and monitors receipts from tenants to ensure all
are in compliance.
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Revenue Recognition
Policy:
All revenue will be recorded in accordance with GAAP on a monthly basis.
Procedures:
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The Accounting Manager is responsible for posting revenue to the general ledger.
Cash Receipts
Policy:
Incoming checks will be opened and logged into NetSuite on a daily basis. The lockbox service receives
and deposits checks on a daily basis. RETA payments are wire directly to the organization's bank
account. Credit card and ACH payments are processed as soon as they are received . Recurring payments
are processed within 48 hours of the due date of the invoice.
Procedures:
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The Operations Manager opens the mail and endorses the checks using a stamp issued by the
bank that states the bank name, account number, company name, and "For Deposit Only" .
Copies of the checks are made by Operations Manager before deposits are made on a daily
basis.
The Accounting Manager codes the income and posts receipts in NetSuite.
Checks and cash are held in a safe until deposits are made.
The lockbox service receives checks and makes daily deposits. The Accounting Manager records
the deposits into NetSuite on a timely basis.
RETA payments are wired directly to the organization's bank account. RETA revenues received
will be recorded into NetSuite on a timely basis by the Accounting Manager.
ACH and credit card payments are processed by the Accounting Manager. Unless a recurring
payment form is filed with the organization, all sensitive payment information is destroyed after
processing by the Accounting Manager.
Recurring payment forms are maintained, processed, and secured by the Accounting Manager.
Deposits
Policy:
Bank deposits are made on a daily basis and reviewed by the Executive Director for checks received by
the organization directly.
Procedures:
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The Accounting Manager uses the in-house check scanner to process deposits.
Bank deposits slips are prepared by the Accounting Manager through the check scanner
software.
The Executive Director signs off on the incoming checks log, copies of checks, and deposit
document packaged together.
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The incoming checks log, copies of checks, and deposit slips are filed by the Operations
Manager.
Money will be transferred out of bank accounts on a monthly basis to ensure that the amounts
remain under the recommended operational requ ired limits to maximize FDIC coverage.
Expenses & Accounts Payable
Policy:
Payroll is outsourced to My Pay Solutions. All employees are required to record vacation and sick time
taken. Employees are paid biweekly.
Procedures:
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The Operations Manager submits all payroll information to My Pay Solutions for processing on a
biweekly basis. The Accounting Manager provides approval to My Pay Solutions before payroll
is processed.
The Operations Manager saves all payroll reports to the server.
The Operations Manager submits staff 401K payments to the Online 401K each pay period.
Payroll changes, additions, and deletions must be reviewed and approved by the Executive
Director. If there are changes, additions, and deletions to the Executive Director's salary, a
board member must provide approval and/or written documentation .
Purchases
Policy:
Purchases should not exceed the planned amount in the budget, unless approved by the Board.
Procedures:
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Employees must get approval from the Board for all purchases over budgeted amounts.
Independent Contractors
Policy:
Independent contractors are used for some of the organization's services.
Procedures:
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The Accounting Manager is responsible for verifying that the person is appropriately classified as
an independent contractor.
1099's will be tracked and processed by the Accounting Manager at year end.
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Invoicing Approval & Processing
Policy:
All invoices must be approved by the Accounting Manager. Approved invoices will be paid within 30
days of receipt, unless other terms are stated on the invoice, in which case, those terms will be honored .
Procedures:
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Invoices and bills will be opened, reviewed, and entered into NetSuite by the Accounting
Manager. The Executive Director will be notified immediately of any unexpected or
unauthorized expenses.
The Accounting Manager initiates the check run. Second approvals are given by signing the
checks generated. Checks over $5,000 require two signatures.
Copies of all invoices are maintained by the Accounting Manager for at least 5 years.
Cash Disbursements
Policy:
Cash disbursements are processed by the Accounting Manager. Documentation including vendor name,
amount due, and remit address are required for a vendor to be paid.
Procedures:
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Checks are prepared by the Accounting Manager and mailed by the Operations Manager.
Expense records are maintained by the Accounting Manager.
Wire transfers must be initiated by the executive director or a board member.
Voided checks are requested and reconciled by the Accounting Manager.
Manual checks are retained by the Accounting Manager and issued by the Executive Director.
Employee Expense Reimbursements
Policy:
Work expenses related to travel, lodging, transportation, meals, office supplies, and miscellaneous are
eligible for reimbursement. Pre-authorization is required for all expenses to be reimbursed .
Procedures:
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Reimbursement requests are authorized by the Executive Director.
An Expense Report Form is used to request reimbursement and should be submitted within 10
business days. The Expense Report Form is filled out by the person requesting funds. The
Executive Director must sign the form to approve the reimbursement. lfthe Executive Director
is submitting an expense report, a board member must sign as the approver.
Expense Report Forms are entered into NetSuite by the Accounting Manager.
Travel requests for all employees are authorized by the Executive Director.
The IRS standard mileage rate should be used for mileage reimbursements. This rate can be
found on the IRS website.
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Asset Management
Cash Management and Investments
Policy:
The organization's operating bank account shall maintain a $750,000 target balance due to operational
needs. The organization shall also maintain a money market account providing overdraft protection for
the operating account in the amount of $250,000. All other funds shall either be invested into fixed
income and equities, or managed by the Accounting Manager to provide optimal FDIC coverage. The
organization has an investment of reserve funds policy and procedures document that provides
guidelines for investment account policies and procedures.
Procedures:
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The Executive Director and 1 or more Board members are the only persons authorized to be
signers on bank accounts.
Accounts held under FDIC insured banks shall not exceed the limit to which it is insured, with the
exception of the bank holding the operating account, due to operational needs.
Investments shall be managed and selected in accordance with the current Amended and
Restated Investment of Reserve Funds Policy and Procedures. Investment analysis should be
performed at least annually. The Accounting Manager is responsible for compliance with this
policy.
All bank transfers and wires are approved by the Executive Director or a Board member that is a
signer on the account.
Capital Equipment
Policy:
Fixed assets under $5,000 are expensed, and over $5,000 are capitalized.
Procedures:
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The straight-line depreciation method is used and the schedule is maintained by the Accounting
Manager.
Depreciation is posted to the general ledger on a monthly basis by the Accounting Manager.
Assets will be disposed of with no salvage value when they are no longer in use, unless
otherwise instructed by the Executive Director.
Employee Retirement Accounts
Policy:
Employees are offered a 401K up to 6% of salary match, after a six month vesting period.
Procedures:
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The Accounting Manager and My Pay Solutions is responsible for ensuring compliance with
ERISA requirements.
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The Accounting Manager and My Pay Solutions is also responsible for ensuring that employee
contributions are properly withheld from payroll and transmitted to the accounts within the
required time period.
Insurance
Policy:
Adequate insurance shall be maintained and revised in accordance with the risk appetite of the
organization's Board and management.
Procedures:
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The Accounting Manager maintains communication with the organization's insurance agent and
legal counsel regarding insurance policies.
The Accounting Manager and Executive Director ensure that all policies contain adequate
coverage, and update the FAB committee on any major changes.
RFPs are managed by the insurance agent and performed annually. This task is monitored by the
Accounting Manager.
Reserve Study
Policy:
A reserve study shall be prepared for the Gondola and Chondola through the contractual obligation date
of the organization . Equity related to the major capital repairs and replacements should be Board
designated and revised every year to ensure accuracy. Funding is derived from multiple sources of
income, including investment income, RETA, and member assessments. The reserve study is based on
physical analysis and financial analysis.
Procedures:
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The Accounting Manager is responsible for obtaining a reserve study by working with Telluride
Ski and Golf, LLC ("TSG") and The Town of Mountain Village ("TMV").
The Accounting Manager works with TSG and TMV to make annual revisions to the reserve
study.
The Accounting Manager and Executive Director review the study and make an annual
recommendation to the board for the designated equity pertaining to major capital
replacements and repairs associated with the Gondola and Chondola.
IN WITNESS WHEREOF, the undersigned certifies that the foregoing policies and procedures, consisting
of 12 pages, were adopted by the Board of Directors of Telluride Mountain Village Owners Association,
on December 17, 2014, to take effect immediately.
By:
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