Financial Controls

Budget

A first draft of the annual budget will be presented for discussion to the Board of Directors at least 2 months in advance of the start of the next financial year with the aim that it be approved prior to the start of the fiscal year.

The approved budget may be presented at the Annual General Meeting for the information of the members.

Actual expenditures against budget will be regularly reported to the Treasurer who determines whether approval of the Board of Directors is required for further expenditure in a given budget category.

Actual financial performance against this budget is reported regulariy to the Treasurer and to the membership once per year at the subsequent AGM.

Commitment of Funds

The Executive Director is authorized to approve purchase orders for any items under $10,000 that are also either: 1) within approved budgets -or- 2) recoverable within 60 days through reasonably assured associated revenues (for example, textbook purchases for scheduled courses). Purchases not covered by these exceptions are subject to the Acquisitions Policy.

Accounting Procedures

  • The keeper of the financial records will follow Generally Accepted Accounting Procedures.
  • Accounts will be kept as up to date as possible.
  • Bank statements will be reconciled monthly.
  • PEMAC will pay all legitimate invoices received by the Association within the grace period required by the payee or within 30 days if none is given.
  • Invoices received from a supplier/creditor will be verified against the work performed or the goods received, coded to the correct account and filed alphabetically in the Accounts Payable file for the next cheque run.
  • Cheques are never to be issued blank or post-dated.
  • Lost or stolen cheques are to be reported immediately and a stop payment order issued to the bank.
  • Copies of VOID cheques are to be kept on file.
  • All cheques that have not been presented in the six-month period after issuance are to be cancelled and a new cheque issued only on the request of the payee.
  • All invoices will be prepared by the Head Office Administrator and coded to the appropriate G/L accounts. If an invoice has been cancelled, it will be recorded as 'cancelled' and maintained on file for record keeping purposes.
  • An individual will be designated for initiating appropriate action regarding any arrears owing to PEMAC.
  • All required government filing including GST/HST reconciliation and payments will be completed on time as required.
  • Shared electronic files, backed up daily, are acceptable for record keeping with the exception of annual financial statements for which paper copies must be kept.

Payment Authorization Policy

  • When it is time to pay suppliers, requisitions will be prepared for approval. All payments over $5000 require authorization by 2 signing officers
  • Purchases over $5000 will be made via a purchase order that has been approved by 2 signing officers.

Financial Reporting Requirements

  • The Board of Directors must approve the annual financial statement for presentation at the AGM.
  • The members have the opportunity to review the annual financial statement at the AGM. Member approval of the financial statement is not required.
  • The Board of Directors reviews financial performance at least quarterly.
  • The Executive committee reviews financial statements and cash flow forecasts at least monthly and within 30 days of bank reconciliations.
  • The Executive Director reviews accounts at least monthly.
  • The individual charged with keeping the financial records records payments and receipts at least weekly and reconciles accounts to banking records at least monthly.

Cash Management

  • PEMAC will not accept or disburse payments in paper currency (cheques are acceptable) and will hold no petty cash accounts.
  • All new bank accounts and investment accounts shall require a resolution of the Board of Directors
  • Segregated funds shall be kept in a bank account separate from operational funds.
  • A cash reserve of 2 months with a target of 3 months of normal expenses shall be maintained. The figure for a 'normal month of expenses' will be agreed by the Board as part of the budget each year.
  • The Board will be informed before the reserve is accessed.
  • The reserve may be held in a Bank Account, provincial or federal treasury bills, GIC's of a
    Schedule I chartered bank, or Investment Savings Accounts insured by the CDIC. At the discretion of the President, Treasurer and Executive Director. Corporate bonds, stocks and mutual funds are not
    permitted.
  • Loan arrangements may not be made without the express authorization of the Board of Directors. Even so, article 7 of the Bylaws must be upheld (no more than 10% of the prior year's earned revenue).
  • Bank deposits shall be made weekly.
  • The Board of Directors shall review all bank accounts and investments quarterly.