Finance

Administrative and Financial Policies Manual

The Administrative and Financial Policies Manual ensures the financial accountability of the organization. The policies achieve the following:

• Help ensure that the mission of the organization is achieved
• Ensure the continued liquidity of the organization (sufficient cash to meet obligations)
• Maintain the long-term solvency of the organization (assist in risk management with timely and accurate reporting to the Board)
• Achieve and document compliance with laws and restrictions

To ensure the success of the organization, it is necessary that its assets are safeguarded and that its financial activities are properly reported to the board of directors. Timely and relevant reporting provides the board with the financial information necessary to budget and plan for the organization’s future. The policies also provide an ongoing opportunity to evaluate performance of plans over accounting periods with consistency and accuracy. The set of standards and controls detailed in the policy manual ensure the conformity of reporting necessary to understand the financial health of the organization while at the same time ensuring that the assets and obligations are correctly reported.

The financial systems outlined in the manual will detail rules for:

1. Authority and responsibility over the financial reporting process
2. Access to assets and accounts
3. Financial budget, planning and reporting activities
4. Summarizing, categorizing, and reporting financial transactions
5. A system of internal control
6. The process of financial risk management

Each member of the board has a fiduciary duty to the organization to safeguard its assets and ensure compliance with the law and the rules of the organization.

Sample Table of Contents

Note: Every organization will right-size the need for policies based on its complexity. Below is a typical set of policies found in an Administrative and Financial Policies Manual.

• Articles of Incorporation (policy for review)
• Bylaws (policy for review)
• Policies and Resolutions, including a process for overall review of the manual and responsibilities
• Code of Ethical Behavior, including conflict of interest policy (required by IRS for Form 990)
• Fiscal Year
• Financial Authority and Internal Controls
• Audit Policy (process for RFP, oversight, use of a third party, etc.)
• Special Audit
• Late Payment and Penalties
• Investment Fund (definitions, risk allocation, purpose, etc.)
• Long-term Investment Fund and/or Endowment, including oversight responsibilities
• Board Operating Reserve, including oversight responsibilities (definition of purpose, savings devise, process for allocation)
• Business Travel
• Insurance Coverage (definitions, review, renewal)
• Procurement
• Board Giving
• Charitable Gift Acceptance
• Document and Information Management (aka, document retention policy)
• Data Sharing
• Social Media and Media Contact
• Public Policy, including decision-making criteria
• Emergency Preparedness and Continuity Plan (Natural disasters, human-caused business disruptions, technology outages, loss of essential revenue, etc.)
• Cybersecurity/Data Breach Response Plan

Note that if your organization does not have employees or an employee manual, the following policies should be included in this manual to ensure compliance with IRS 990 tax filings.

• Conflict of Interest Policy
• Employee Protection Policy, aka Whistleblower Protection Policy (required by IRS Form 990)
• Board and CEO Succession Planning Policy and Plans