MASSACHUSETTS DESTINATION IMAGINATION (MADI)
ACCOUNTING POLICIES AND PROCEDURES
I.
Introduction
II.
Division of Responsibilities
III.
Chart of Accounts and General Ledger
IV.
Cash Receipts
V.
Cash Disbursements & Expense Allocations
VI.
Credit Card Policy and Charges
VII.
Accruals
VIII.
Bank Account Reconciliation
IX.
End of Month, Periodic and Fiscal Year-End Close
X.
Financial Reports
XI.
Fiscal Policy Statements
Appendix A Expense Approval Matrix
Adopted September 20, 2015
MADI ACCOUNTING POLICIES AND PROCEDURES
I. Introduction
The purpose of this manual is to describe all accounting policies and procedures currently
in use at Massachusetts Destination Imagination (MADI) and to ensure that the financial
statements conform to generally accepted accounting principles; assets are safeguarded;
guidelines of grantors and donors are complied with; and finances are managed with
accuracy, efficiency, and transparency.
All MADI's staff/volunteers 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 Treasurer and
approved by the Executive Director/Affiliate Director and the Board of Directors.
II. Division of Responsibilities
The following is a list of personnel who have fiscal and accounting responsibilities:
1. Board of Directors
a. Reviews and approves the annual budget
b. Reviews annual and periodic financial statements and information
c. Reviews Executive Director's performance annually
d. The Board Chair and one other board member appointed by the board will be
authorized signers on the bank accounts
e. Reviews and approves all contracts over $1,000. The exception to this policy
shall be the procurement of tournament sites, these sites being dependent on
geography, availability and site suitability. The Executive Director shall approve
the contracts for tournament sites, and shall notify the board of any significant
changes to the budget due to these costs
f. Reviews and approves all non-budgeted expenditures over $1,000
g. Determines whether the organization should have an audit and, if so, chooses
and contracts with the auditor. The auditor reports directly to the Board.
2. Executive Director
a. Reviews and approves all financial reports including cash flow projections
b. Sees that an appropriate budget is developed annually
c. Reviews and signs all issued checks and/or approves check/expenses by the
Treasurer. Appendix A, Expense Pre-Approval Matrix (8/30/15) outlines
expense and approval levels.
d. Reviews and approves all contracts under $1,000. The exception to this policy
shall be the procurement of tournament sites, these sites being dependent on
geography, availability and site suitability. The Executive Director shall approve
the contracts for tournament sites, and shall notify the board of any significant
changes to the budget due to these costs.
e. Reviews and approves all grant submissions
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
f. Monitors grant reporting and appropriate release of temporarily restricted
funds
g. Is on-site signatory for all bank accounts
h. Reviews all bank statements, reviews for any irregularities, and reviews
completed monthly bank reconciliations
i. Oversees adherence to all internal controls
j. Monitors all program expenditures
k. Monitors program budgets
l. Reviews and manages cash flow
m. Reviews and approves all reimbursements and fund requests
n. Reviews all incoming and outgoing invoices
o. Monitors all expenses to ensure most effective use of assets
p. Oversees expense allocations
q. Reviews all financial reports
r. Reviews and informs volunteer staff on internal controls and accounting policies
and procedures
s. Initiates donor thank you letter acknowledgements
3. Associate Affiliate Director
a. Monitors all program budgets
b. Assists Executive Director with development of annual budget and program
budgets.
c. Assists Executive Director with donor acknowledgements as appropriate
d. Is an approved check signer
e. Reviews all financial reports
4. Treasurer
a. Receives and opens all incoming accounting/financial mail, including bank
statements.
b. Overall responsibility for data entry into accounting system and integrity of
accounting system data
c. Makes bank deposits
d. Processes invoices and prepares checks for signature
e. Signs checks as approved by Executive Director
f. Maintains general ledger
g. Prepares monthly, quarterly and year end-financial reports
h. Reconciles all bank accounts
i. Mails vendor checks
j. Manages Accounts Receivable
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
III. Chart of Accounts and General Ledger
MADI 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
(Quickbooks by Intuit) All input and balancing is the responsibility of the Treasurer with
final approval by the Executive Director.
The Executive Director should review the general ledger on a periodic basis for any
unusual transactions.
IV. Cash Receipts
1. Cash receipts generally arise from:
a. Team fees
b. Sales tables
c. Raffles
d. Grants
e. DI, Inc. contribution
f. Direct donor contributions
2. Processing receipts:
a. Payment types:
i. Online payments or credit cards will be processed electronically and
deposited into the MADI checking account
ii. Checks will be stamped "for deposit only", logged and deposited into the
MADI checking account
iii. Cash will be counted, it will be logged and deposited into the MADI
checking account.
iv. The Treasurer will make a copy of all checks received or scan and print.
Documentation for all receipts (copy of checks, letters, etc.) will be attached
to the deposit slip and filed chronologically.
b. Treasurer and/or Regional Directors shall deposit receipts within ten(10)
business days of receipt of funds. The deposits shall be separated into two(2)
deposits, one for sales table funds and one for raffle funds.
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
c. Funds will be kept in a secure location until bank deposit is made
d. For team fees, the Treasurer will credit the appropriate team.
e. Sales tables receipts, cash and checks will be counted and verified at the training
or tournament before delivered to the Treasurer with a signed receipt slip with
totals of cash and checks. Sales funds shall be kept separate from raffle funds
and noted separately on the signed receipt slip. Sales and raffle receipts will be
posted to the appropriate training or tournament.
V. Cash Disbursements & Expense Allocations
1. Cash Disbursements are generally made for:
a. Payments to vendors for goods and services
b. Taxes/license fees
c. Volunteer/MADI staff training
d. Meeting expenses
e. Stipends
2. The Treasurer will keep and be responsible for the checkbook.
3. Checks will be written by Treasurer (or Executive Director)
a. As invoices arrive
b. As needed by MADI personnel for training, tournament or other approved
expenses
4. Requests for cash disbursements will be submitted to the Treasurer by:
a. Original invoice from vendor
b. Expense reimbursement form accompanied by original invoice from MADI
personnel, signed by Executive Director. The expense reimbursement form must
detail goods or services purchased and purpose.
c. MADI personnel shall submit expense reimbursement forms and all receipts for
any advance payments.
d. In no event will checks be made out to "cash", "bearer", "petty cash", etc.
5. The Treasurer reviews all requests for payment and
a. Verifies expenditure and amount
b. Approves for payment in accordance with budget
c. Verifies appropriate account allocation
d. Processes payment and check production
e. Immediately enters payment into Accounting program
f. Checks over $5,000 will have written approval from the Executive Director and
the Associate Director or Board Chair
g. Indicates invoices as paid in a consistent manner
h. Mails checks and appropriate backup documentation
i. Files all backup documentation appropriately
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
VI. Credit Card Policy and Charges
1. The Executive/Affiliate Director, the Associate Affiliate Director and the Sales
Director are the only MADI personnel authorized to be issued a MADI credit/debit
card.
2. Personnel issued a MADI credit card will be held personally responsible in the event
that any charge is deemed personal and 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
MADI receives funds.
3. Receipts for all credit card charges will be given to the Treasurer within one month
(4 weeks) of the purchase. The Treasurer will verify all credit card charges with the
monthly statements. Receipts will be attached to the monthly statement.
4. Accounts to be charged will be written on the statement. The Treasurer will post the
charges against the appropriate accounts.
5. Monthly credit card statements will be reviewed and approved by the Affiliate
Director, Associate Affiliate Director and Board Chair on a quarterly basis.
VII. Accruals
1. To ensure a timely close of the General Ledger, MADI may book accrual entries.
2. Accruals may include:
a. Tournament site charges still pending at end of fiscal year
b. Monthly interest on any bank accounts, certificates of deposit, etc.
VIII. Bank Account Reconciliation
1. All bank statements are mailed to and opened by the Treasurer.
2. The Treasurer will:
a. Reconcile each monthly statement in a timely manner as follows:
i. A comparison of dates and amounts of deposits as shown in the accounting
system and on the statement
ii. A comparison of cleared checks with the accounting record including
amount, payee and sequential check numbers
iii. An investigation of any rejected items
iv. A comparison of inter-account transfers
b. Verify that voided checks, if returned, are appropriately defaced and filed.
c. Investigate any checks that are outstanding over six months
d. Attach the completed bank reconciliation to the applicable bank statement, along
with all documentation
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
e. Provide the reconciliation report to the Executive Director to be reviewed,
approved, dated, and initialed
IX. End of Month, Periodic and Fiscal Year-End Close
1. 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.
2. At the end of each month and fiscal year end , the Treasurer will review all balance
sheets accounts including verification of the following balances:
a. Cash accounts match the bank reconciliations
b. Accounts receivable and payable accounts match outstanding amounts due and
owed
3. The income and expense accounts review will include reconciliation to amounts
received and expended.
4. Once the final monthly and fiscal year-end financial statements are run, reviewed,
and approved by the Executive Director, no more entries or adjustments will be
made into that month or year's ledgers.
5. At the end of the fiscal year, the Treasurer or outside accounting firm/CPA will
prepare the Return for Organization Exempt from Income Tax (IRS Form 990). The
return will be presented to the Executive Director, the Board Chair (and the Board
Finance Committee, if and when one is formed) for their review and approval. The
Treasurer will then file the return with the IRS by the annual deadline.
6. All other appropriate government filings including sales tax payments and those
required by the MA Department of Revenue and the MA Attorney General's Office
will be completed and filed with the appropriate agency by the Treasurer.
X. Financial Reports
1. The Treasurer will prepare the monthly and annual financial reports for
presentation to the Executive Director and Associate Affiliate Director for review.
2. The reports will include:
a. Balance sheet
b. Statement of income and expenses
c. Budget versus actual report
d. Five-year comparison (annually, at year end only)
3. Periodic and annual financial reports as noted above, will be submitted to the Board
of Directors for review and approval.
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
XI. Fiscal Policy Statements
1. All cash accounts owned by MADI will be held in financial institutions which are
insured by FDIC. No bank account will carry a balance over the FDIC insured
amount.
2. No travel cash advances will be made except under special conditions and preapproved by the Executive Director (or Board Chair, if for Executive Director.)
3. Reimbursements will be paid upon complete expense reporting and approval using
the official MADI form. Reimbursements to the Executive Director will be
authorized by the Board Chair.
4. Any donation will be recorded and a letter of acknowledgement with appropriate
tax information will be send to the donor by the Executive Director within two
weeks of receipt of the donation.
5. The Executive Director, one designated Board member and the Treasurer are the
signatories on MADI's bank accounts. Appendix A, Expense Pre-Approval Matrix
(8/24/15) outlines expense and approval levels.
6. Bank statements will be reconciled monthly by the Treasurer
7. All financial records will be retained for the time specified in the Board approved
Document Retention and Destruction policy
8. Correction fluid and/or tape will never be used in preparing any accounting
documents
Adopted September 20, 2015
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MADI ACCOUNTING POLICIES AND PROCEDURES
Appendix A
Expense Approval Matrix
Expense
Role
Pre-approval Required?
If yes, must be approved by
AD prior to purchase
Under $100
RD
no
ACM
no
Sales
no
AD
no
RD
yes
ACM
yes
Sales
no
AD
no
RD
yes
ACM
yes
Sales
yes
AD
no
Over $500
AD
yes
Any expenses that are not
budgeted and are over $500
must be approved by the
board of directors.
Over $5000
AD
yes
All budgeted expenses over
$5000 must have written
approval from the AD and the
Associate AD or Board Chair
before the payment is made
$101-$250
$251-$500
Adopted September 20, 2015
Comments
For any expenses that total
$100 above your allocation
for supplies and/or for food
For any purchases that are
not outlined in the approved
budget for that fiscal year
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