Finance Policy and Procedure Manual

Status


Last reviewed
Mon, 05 September 2016

All finance transactions as noted in this policy are to be authorised by the noted authorised person prior to the transaction being undertaken.

This policy is to be read in conjunction with other specific finance policies where relevant.

Public
visibility
Approved on: 05 Sep 2016
Amended on: 20 Jan 2017
Review cycle: 3 Years
Owned by

Board Finance and Audit Committee

Approved by

College Board

Category: 
Policy Contact: 
Louise Sutton
Background: 

The Eastern College Australia Financial Policy and Procedure Manual provides the policies and procedures for finance transactions within the business which must be followed by all staff. It also provides guidelines Eastern College will use to administer these policies, with the correct procedure to follow.

Purpose: 

All finance transactions as noted in this policy are to be authorised by the noted authorised person prior to the transaction being undertaken.

This policy is to be read in conjunction with other specific finance policies where relevant.

Scope: 

These policies and procedures apply to all employees.

Statement: 

Table of Contents

Finance Authorisation Policy

Purpose of the Policy

All finance transactions as noted in this policy are to be authorised by the noted authorised person prior to the transaction being undertaken.
This policy is to be read in conjunction with other specific finance policies where relevant.

Procedures

Prior to any of the following finance transactions being undertaken, the authorising person noted must authorise the transaction.

Finance Transaction Authorised Person
Bank Accounts Finance Manager & Chief Operations Officer
Issuing Petty Cash Reception
Business Credit Card Chief Operations Officer
Authorising New Suppliers Finance Manager
Purchasing Stock Resource Centre Manager
Purchasing Assets/ Equipment Chief Operations Officer
Debt Collection Chief Operations Officer
Payment of Invoices Finance Manager/signed off by Chief Operations Officer

Bank Account Policy

Purpose of the Policy

This policy sets out the requirements for use of bank accounts, including opening, closing authorising users, authorisation, variations to terms and conditions, reconciliation of bank accounts and bank account transactions.

Procedures

Opening Bank Accounts

Any new bank accounts to be opened for general college business must have the written approval of Finance sub-committee of the governing Board.
Any new bank accounts to be opened for staff ministry Fringe Benefit payments must have the approval of the Chief Operations Officer.
For each new general college bank account opened, the financial system must be updated and the bank account registered by the Finance Manager.

Changing Bank Account Authorising Users

When new authorising users of general college bank accounts are to be added, written approval of the Finance sub-committee of the Governing Board is required.

If an existing authorising user leaves the organisation, or they are no longer required to be an authorising user, approval of the Chief Operations Officer is required to remove them from the banking system.

Bank Account Authorisations

For monies withdrawn from any general college bank account, whether by cheque, EFT or other online payment method, there must be two persons authorising for each payment.
The authorised persons for bank account payments are:
Chief Operations Officer
Accounts Manager
Principal
Each payment made must be supported by an invoice, receipt or other appropriate documentation. Evidence must be provided with any payment, (a MYOB Accounts Payable report or MYOB Wages Summary report) and the documentation signed by the two authorising parties.

Variations to Bank Account Terms and Conditions

Any variations to banking arrangements can be made or varied by the Chief Operations Officer and the Finance Manager is responsible for updating the financial system and/or bank account register with the new information.

Closing Bank Accounts

Where it is decided that a bank account is no longer necessary, the Chief Operations Officer will authorise the closure of the bank account.
The Finance Manager will then be required to complete the following:

  • ensure all transactions with respect to the account (including cheques drawn) have been completed;
  • for general college accounts lodge with the bank a letter, signed by the Chief Operations Officer, advising of the closure of the account;
  • meet the bank's requirements with respect to account closure; and
  • update the financial system and bank account register.

Bank Account Transactions

All deposits received must be stored in the locked safe until banked. Where possible all deposits must be banked within seven days of receipt.
Unallocated direct deposits of more than one month will be investigated fully to determine source of deposit. Where the source cannot be identified, the deposit will be allocated to the Suspense Account.
Cheques outstanding for more than twelve months will be reallocated back to the business through the financial system.
Where a payment stop on a cheque is required, this will be authorised by the Finance Manager.
The Finance Manager will be responsible for carrying out the following duties in regards to a payment stop on a cheque:

  • ensuring the cheque has not already been presented at the bank;
  • getting authorisation to action the stop payment using appropriate forms from the bank;
  • ensuring the bank receives notification of the stop payment notice;
  • receiving confirmation of action from the bank of the stop payment.

Petty Cash Policy

Purpose of the Policy

Petty cash should be used to pay for small business expenses up to $100 where payments through accounts payable or credit card are not justified or appropriate.

Procedures

Issuing Petty Cash

Petty cash vouchers must be completed before any cash is taken from the petty cash float.
Only up to $100 can be disbursed at any one time.
All petty cash vouchers issued must be approved by Reception.
Once the petty cash is spent, a receipt or invoice should be attached to the voucher and returned to petty cash with any balance of monies unspent.
All completed vouchers must have the following details included:

  • Issue date of voucher;
  • Name of person issued the voucher;
  • Amount of monies disbursed;
  • Details of expense;
  • Invoice or receipt.

Reconciling Petty Cash

Petty cash float is to be reconciled monthly. This is the responsibility of the Receptionist.
All petty cash expenditure must be entered into the financial system once the petty cash has been reconciled.
The balance of monies and vouchers must equal the petty cash float amount before reimbursement can be made.

Use of Business Credit Card Policy

Purpose of the Policy

This policy provides guidelines for the issue and use of business credit cards.

Procedures

An employee will only be issued a credit card once authorized by the Finance sub0committee of the governing Board.
The business credit card can only be used for budgeted expenses.
No cash advances are to be taken using the business credit card.
Where a business credit card is lost or stolen, then the owner of this card is to notify the Finance Manager who is responsible for notifying the issuing agency and ensuring the card is cancelled.
The use of the business credit card is not to be used for personal expenses.
All holders of business credit cards are required to provide the relevant receipts so that the Finance Manager can reconcile the monthly credit card statement to the expense form.
All business credit cards are to be returned to the college when the person is requested to by the Chief Operations Officer or the Finance Manager or where they are no longer an employee of the college.
The Finance Manager is responsible for closing down any returned credit cards with the appropriate banking institution.
 
 

New Supplier Policy

Purpose of the Policy

All new suppliers to the college with which we will have an ongoing account must be reviewed and accepted in accordance with this policy to ensure that the supplier service is aligned with the business objectives.

Procedures

Choosing a New Supplier

A new supplier must provide our business with the ability to meet the current needs of our organization.
For each new supplier the following information table must be completed prior to agreeing services

Supplier Selection Background Information

Business Name of Supplier:
Location of Supplier:
Products/Services provided by supplier:
(Attach a list if necessary)

Supplier Selection Review Checklist

For each new supplier being considered the following questions must be considered:
Is the supplier pricing competitive?
What are the payment terms for this supplier?
What is the return policy for this supplier:
Does the supplier provide warranties, guarantees etc.? :
Are the suppliers representatives knowledgeable of the products/ services and industry?:
Is there an alternative to this supplier, has the alternative supplier been considered?:
What are the delivery services of the supplier?:

Appointment of Supplier

The appointment of a new supplier will be authorised by the Finance Manager.
All relevant details of the supplier will be entered into the financial system by the Finance Manager once approval is obtained from the Chief Operations Officer.
The Chief Operations Officer will review information entered into the financial system and independently verify the bank account or other payment details of the supplier to ensure payments made are to the correct supplier.

Supplier Payment Terms

Payment terms for all suppliers must be reviewed by the Finance Manager annually.
All supplier payment terms must be a minimum of 14 days.

Purchasing Policy

Purpose of the Policy

This policy provides guidelines for the purchase of goods, services, equipment and assets for the business.
This policy is applicable for all purchases over $100.
Where items to be purchased are less than $100, then the petty cash policy is to be used.

Procedures

Request for Purchase

All items over the value of $500 must be supplied by authorised suppliers – refer to the New Suppliers Policy where the supplier is not an existing supplier.
For items over the value of $2500 three quotations must be provided.
A request for purchase must address the following criteria:

  • Purchasing that promotes environmental sustainability;
  • Value for money; and
  • Preference to Australian/locally produced.

All purchases made within the budget are to be authorised by appropriate department head.
Any purchase within a department which is over and above the budgeted amount must be approved by the Chief Operations Officer.
All purchases which are not budgeted for up to the value of $2000 must be authorised by the Finance sub-committee of the governing Board.

Equipment Asset Purchases

All equipment and asset purchases must be entered in the financial system by the Finance Manager with the following details included:

  • Date of purchase;
  • Supplier; and
  • Make, model, warranty/guarantee information.

 

Stock Control Policy

Purpose of the Policy

This policy provides guidelines for monitoring and managing the amount of stock within the business to ensure that there are suitable levels of stock available at all times. This policy relates to the Resource Centre and Bookshop.
It is responsibility of the Finance Manager to ensure that the stock control policy is adhered to by all employees.

Procedures

Purchase of Stock

It is the responsibility of the Resource Centre Manager to:

  1. Identify core stock and ensure that appropriate levels are held at all times
  2. Monitor all stock levels and ‘stock turns’
  3. For fast-moving stock negotiate with suppliers for ‘just in time’ deliveries where possible
  4. Negotiate with suppliers for best price, quality, delivery methods and returns policy
  5. Order all stock required
  6. Maintain “preferred suppliers” list
  7. Keep up to date with customer and market trends and seek out new product for recommendation to the Faculty

Purchase of all stock must be authorised by the Resource Centre Manager.

Receiving Stock

When stock is received from the supplier, it is the responsibility is the Resource Centre Manager to:

  • Review delivered items to delivery docket, including quantity, quality and completeness of order
  • Match delivery docket to what was ordered
  • Follow up and ensure correct stock order is received
  • Store the stock securely and in appropriate area
  • Update all stock records for receipt of goods
  • Inform Faculty of any difficulty in supply

Managing Stock

It is the responsibility of the Resource Centre Manager to:

  • Identify core stock and ensure that appropriate levels are held at all times
  • Monitor all stock levels and stock turns
  • Understand each stock item – which items are the fast and slow moving stock
  • Monitor re-order levels and ensure orders are placed in adequate time to reduce non-availability of core or necessary stock items
  • Ensure that all stock items are priced in line with current market value
  • Ensure that all Resource Centre staff are aware of new product, price changes and procedures for accurate recording of all stock movements
  • Ensure that there are adequate controls (physical and administrative) in place to minimise theft and/or waste of all stock items
  • Organise and oversee physical stock take twice a year and match records of stock take to administrative and financial records

Student Debt Collection Policy

Purpose of the Policy

This policy provides guidelines for the collection of late student fee payments.

Procedures

An aging debtor report is to be run every month by Reception. All overdue student payments are to be noted and the following procedures undertaken until recovery of outstanding amounts.

  • First Contact: Once the payment is overdue, phone or email the student. Remind them that payment is due and has not been received. Ask them when they will be paying you and keep a record of the conversation or email. Remember to be nice, they may have forgotten or paid into the wrong bank account.
  • Overdue reminder: If they do not respond to the phone call or email within 2 weeks an SMS is to be sent to their mobile phone number asking them to contact the office. Make a note of all conversation details on the overdue student payment record.
  • Direct contact: Where there has been no response to the SMS communication after 2 weeks then an email is sent with an overdue invoice. The purpose of this step is to secure a date of payment. A record of this notice must be entered onto the overdue customer payment record.
  • Formal letter of demand: Where payment remains outstanding and there has been an unsatisfactory response from the student, authorisation from the Chief Operations Officer for the formal letter of demand to be issued must be obtained. Once authorised this letter is to be sent via registered mail and a record of this notice must be entered onto the overdue student payment record.
  • Fee exemption options are available to students under various circumstances and these options are offered when appropriate.
  • Write off debt: Student debts that remain outstanding for more than 12 months are referred to the Finance Manager. A block is put on their ability to access results if that applies. Bad debts are written off on a case by case basis depending on the person involved, their engagement with the college and our assessment as to whether they may eventually pay when they are able.

 

  • and no further sales are to be undertaken with that customer without approval from {insert relevant job title here}.