Finance > Financial Controls Policy & Procedure
Authorised by FAR Committee
Procedure authorised by Chief Executive Officer
Issue Date: 16 December 2021
Review Date: 16 March 2022
Policy statement
To protect Kyeema Support Services against financial misconduct it is necessary that all forms of financial transfers be secured through closely regulated approval processes.
The purpose of this policy is to:
• Ensure that all expenditures made in the name of Kyeema are authorised and independently reviewed.
• Guard against any potential abuse of payments procedures, while maintaining flexibility and avoiding unnecessary formality.
This policy supports Kyeema Support Services to apply Standard 2: Governance and Operational Management of the NDIS Practice Standards.
Scope
This policy applies to all workers.
Related legislation and policy
National Standards for Disability Services
NDIS Practice Standards
Financial Management and Accountability Act 1997
A. Policy
Financial transactions carried out in the name of Kyeema shall, as far as possible, be governed by the following principles.
1. No payments shall be made in the name of Kyeema unless such payment has been authorised by the Board.
2. Payment authorisation can be made either through Board approval in the annual budget or by other avenues approved by the Board (such as through a written delegation of the Board).
3. Complete records of payment authorisation should be kept on file.
4. The Board, through the Chairperson and/or delegated director from the Finance Audit Risk Committee, shall have continuous access to Kyeema’s bank statements and Kyeema’s accounts, books and records.
5. No single person shall have the authority to carry through all processes (budgeting, authorisation, payment, approval) to do with any:
•payment
•approval of a supplier
•approval of an agreement or contract with an external party
•contract of employment.
6. Any person who has an actual or potential conflict of interest in respect of any:
•payment
•approval of a supplier
•approval of an agreement or contract with an external party
•contract of employment,
must declare that conflict of interest to the Board and either comply with any Board direction or withdraw from involvement in the transaction.
7. All payments (except credit card and petty cash payments) shall require signatures (or equivalent validations) from two persons with properly delegated authority, as recorded in the Financial Delegations Register.
8. Financial transaction cards may only be issued to a person approved by the Board.
9. Cardholders and persons making a payment out of petty cash (Payor) must obtain a tax invoice or receipt for each transaction. If a tax receipt is lost or misplaced, the Payor must provide a written statement setting out the details of the transaction. Tax invoices or receipts and statements must be provided to the CEO with each monthly account statement.
B. Procedure
This procedure explains how Kyeema will implement the Financial Controls Policy and Procedure.
1. Processes: Payments
a. Financial Transaction Card Issue
Any organisational financial transaction cards (credit or pre-paid debt cards) may only be issued to a Board member, staff member, or volunteer where their functions and duties would be enhanced by their use. Cards thus issued will be noted on a list held by the Finance Manager and be made available to Chairperson of the Board on request.
Other persons may be added to the list by the Board. The Board may delegate the power to add persons to the list to any or all of:
•The Finance, Audit, Risk Committee
•The CEO
Financial transaction cards may be issued on a temporary basis and recovered afterwards.
Each financial transaction card will be issued to a specific person, who will remain personally accountable for the use of the card.
b. Cardholder’s Responsibilities
i. The Cardholder shall:
1. In all cases obtain and retain sufficient supporting documentation to validate the expense (e.g. tax invoice or receipt) or provide a written statement in lieu (the CEO may require a statutory declaration).
2. Attach supporting documentation to the monthly statement from the bank.
3. Review the monthly statement for inaccuracies and report these to the CEO.
4. Verify that that goods and services listed were received.
5. Sign the monthly statement to verify that transactions have been made for official purposes.
6. Forward the papers to the authorised signatory for approval (the Board Chair shall authorise payments by the CEO; the CEO shall authorise the expenditure of all other cardholders).
7. Notify the bank and the CEO (or in the case of the CEO, the Board Chair) immediately if:
a. The card is lost or stolen
b. Any unauthorised transaction is detected or suspected
c. A personal expense has inadvertently been charged to the card.
8. Notify the CEO and the bank of any change in name or contact details.
9. Take adequate measures to ensure the security of the card.
10. Cease using the card and promptly return the card to the CEO if:
a. The cardholder resigns
b. The CEO determines that there is no longer a need for the cardholder to retain their card
c. The card has been cancelled by the bank.
11. Be personally liable for any unauthorised transaction unless the card is lost, stolen or subject to fraud on some part of a third party.
ii. The Cardholder shall not:
1. Exceed any maximum limits set for the card.
2. Obtain cash advances through the card.
3. Use the card for any illegal purchases.
4. Authorise their own expenditure.
5. Claim double allowances (i.e. request reimbursement for an expense already paid by the card).
c. Card Expenditure
The card will only be used for purchases that are directly associated with the cardholders’ function within the organisation.
Where doubt exists as to whether an item is function-related, prior authorisation should be obtained from the CEO (or, in the case of the CEO’s own card, the Chair of the Board or of the Finance, Audit, Risk Committee).
Where private expenditure occurs on the same transaction as a corporate expenditure (e.g. a person incurs a debt for personal telephone calls during a hotel stay) the cardholder must settle the private expense prior to charging the balance on the organisational card.
The use of the corporate card for “services of a dubious nature” is expressly prohibited. “Services of a dubious nature” are defined as any goods or services that could bring the name of the organisation into disrepute.
d. Card Expenditure Review
Records of all expenditures made on the card are reviewed by the Finance Manager or the Corporate Services Manager, with a view to establishing both the need for the expenditure and the authorisation of the expenditure.
e. Financial Transaction Card Use
i. Card Misconduct
Wherever a breach in this policy occurs, the CEO will assess the nature of the breach and may institute an appropriate disciplinary process, including:
•counselling and/or verbal warning
•a diary or file note created and retained on employee’s personnel file
•a written warning.
Where the CEO considers that the breach is such that serious sanction is appropriate, Kyeema’s right to summarily dismiss an employee for serious misconduct may be exercised.
The CEO may determine whether to report a breach of the policy to the police for criminal investigation.
Following report of a breach, at the next Finance, Audit, Risk Committee meeting, the CEO shall report:
• the investigation of the circumstances of the breach
• any police reports and action
• any disciplinary action taken.
f. Bank Accounts
Bank accounts may only be opened in Kyeema’s name, or to hold Kyeema’s funds, when authorised by a person with the appropriate authority as recorded in the Financial Delegations Register.
Any variations to banking arrangements can only be made by a person with the appropriate authority as recorded in the Financial Delegations Register.
g. Bank Transfers
Any bank transfer above the level approved for the person in the Financial Delegations Register (or any series of payments within the period of fourteen days amounting to 150% of the level approved for the person in the Financial Delegations Register) must be approved prior to the payment by two persons authorised to make such approvals by the Financial Delegations Register.
Each payment must be supported by an invoice, receipt, or other appropriate documentation. Authorisations must be attached to this documentation prior to payment.
h. Cheque Use
All cheques must contain two eligible signatures. Eligible signatories are persons approved by the Board and recorded in Kyeema’s Financial Delegations Register.
Signatories cannot sign a cheque made payable to themselves, or a blank cheque. All details on the cheque form must be filled in before signature.
All cheques received will be deposited in Kyeema’s bank accounts within three days.
i. Cash
Except when classified as Petty Cash, all cash receipts shall be:
• Kept in a supervised or secure (locked) environment, and
• Deposited in the organisation’s bank accounts within three working days.
j. Petty Cash
• see separate Petty Cash Procedure.
2. Processes: Operations
a. Payments to Suppliers
New suppliers - any new supplier must be approved by an authorised person on the Financial Delegations Register.
b. Purchases
All purchases must be requested through a purchase order on the appropriate form, which must specify the authorising officer for the transaction.
Purchases for items over the value of $200 must be made to authorised suppliers only.
All items received are:
• to be checked against purchase order and recorded as supplied to specification
• to be checked against the original supplier authorisation.
c. Asset Management
All purchases of equipment above the value of $5000 must be entered in the organisation’s Asset Register in a standard format. Computer and IT equipment below that value is to be recorded on an assets register for security purposes.
3. Responsibilities
It is the responsibility of the Board to:
• Approve a budget for Kyeema and authorise any departures from that budget.
• Maintain supervision of the financial progress of the organisation.
It is the responsibility of the CEO to ensure that:
• Procedures consistent with this policy are implemented.
• Reports on the implementation of these procedures are regularly submitted to the Board.
• Staff and volunteers are aware of this policy and these procedures.
• The Financial Delegations Register is maintained.
• Any breaches of this policy or procedures are dealt with appropriately.
It is the responsibility of all employees and volunteers to ensure that any payment made on behalf of the organisation conforms to this policy and these procedures
4. Review
The Asset Register shall be reviewed at least yearly.
Related Documents
Delegations Policy and Procedure