Community Involvement Programs

Community Involvement Programs

Community Involvement Programs

Finance Committee Charter FINAL- FebruaryDRAFT- March20162017

FINANCE AND AUDIT COMMITTEE CHARTER

1.Committee Charge: Monitor and act to maintain the organization’s financial health and viability through the following responsibilities:

a.Select and monitor key financial indicators for regular review and periodic reporting to the Board.

b.Review monthly financial statements, current and prospective financial issues and recommend corrective actions.

c.Ensure that accurate and timely financial information is available to the Board.

d.Initiate, oversee and ensure the integrity of annual audit processes.

e.Recommend and oversee the annual budget planning process and guidelines.

f.Recommend the annual budget and long range financial strategy.

g.Annually review financial, investment and audit policies.

h.Annually review risk management plan, including adequate business insurance levels.

Overall Responsibilities

The Finance Committee, in its role of monitoring through direct inspection, is charged with assuring organizational compliance with board financial policies.

- Community Involvement Programs Board Governance Policy, adopted 5/20/13

Specific Responsibilities

Financial Control. In Conducting the business of the agency the Executive Director shall not operate without an adequate system of financial control, including but not limited to the following elements:

oBudgets

oAccounting principles- An accounting system and financial statements kept in accord with generally accepted accounting principles.

oInternal Controls

oBonding

oAdequate liquidity- A minimum current ratio (unrestricted current assets divided by current liabilities) of 1.5 will be maintained to assure an adequate level of cash to meet current obligations.

Net Income. Operating expenditures should not exceed operating revenues on a year to date basis except when in accord with an approved operating budget or budget modification.

Debt service coverage ratio. A minimum debt service ratio should be maintained such that earnings before interest, depreciation and amortization are at least 1.2 of annual debt service payments (excluding lease payments).

Debt to equity ratio. The agency’s debt to equity ratio shall not exceed 3.25 to 1.

oNote on financial covenants- The three financial covenants (debt to equity ratio, current ratio and debt service coverage ratio) are expected to be calculated and provided to the Finance Committee on at least a quarterly basis, and in addition are expected to be maintained according to the agreed-upon levels at all times.

Borrowing. The Executive Director shall not enter into loan agreements except under a Board approved line of credit.

Capital expenditures limitations. Unless included in the capital budget, the Executive Director shall not make capital expenditures in excess of $20,000 without the approval of the Board.

Leases.

oFacilities- the Executive Director shall not enter into facility leases of facility lease extensions of over one year if the future lease commitments exceed $20,000 per year.

oVehicles and Equipment- Unless included in the capital budget or by a specific action by the Board of Directors, the Executive Director shall not enter into new vehicle or equipment leases if the future lease commitments exceed $20,000. However the Executive Director may extend existing leases and enter into leases to replace current vehicles or equipment without Board approval.

Insurance. The Executive Director shall not operate without adequate business insurance including: Property Insurance, General Liability Insurance, Directors and Officers Liability Insurance, Workers Compensation Insurance, and Certificates.

Competitive bidding. No single purchase of more than $20,000 shall be made without competitive bids.

Contracts. The Executive Director shall not enter into contracts or contract extensions with duration greater than one year without specific Board approval.

Divestiture of Assets. The Executive Director shall not divest or liquidate any asset of real property with a value of $20,000 or more without the approval of the Board.

Audit. Executive Director shall not fail to provide the Finance Committee names of qualified external auditors provided by the Board and to contract with a qualified board approved auditor to audit against Board financial policies and Generally Accepted Accounting Principles (GAAP).

Audit Information.

Monitoring Finance Policies

oExternal Report—Audit. An annual audit following GAAP shall be performed by external auditors.

oInternal Report

oDirect Inspection

Capitalization- Any purchase in excess of $5,000 shall be capitalized, rather than expensed.

-Refer to the Community Involvement Programs Board Governance Policy, adopted 5/20/13, for further details regarding the exact financial policies of the Finance Committee.

Composition

The Finance Committee shall consist of at least five members, the majority of whom, including the Committee Chairperson, shall not be employees of Community Involvement Programs. The Finance Committee membership shall include Community Involvement Programs’ Chief Executive Officer and its Director of Finance. The majority Finance Committee members from the Board include the Treasurer (whom also serves as the Finance Committee Chairperson), in addition to two members-at large. The Committee and its Chairman shall be appointed annually by the Board.

  • External advisors/experts may be invited to participate in Finance Committee meetings, depending on the Committee’s perceived need for outside expertise.

Meetings

The Committee shall meet a minimum of four eight times per year, andat such times as deemed appropriate by the Chairman of the Committee and committee members. Attendance via conference call or web-hosted services is acceptable.

Committee Chairperson’s Responsibilities

  • In consultation with other Committee members, schedule dates, times and location for meetings and establish meeting agendas.
  • Officiate and conduct meetings.
  • Provide leadership and ensure Committee members are aware of their obligations and that the Committee complies with its responsibilities.
  • Ensure that minutes are complete and accurate, retained, and included and reviewed at the next meeting.
  • Report regularly to the Board on Committee activity.

Committee Goals -2016 & 2017

Comply with the overall and specific Finance Committee responsibilities.

Completing and submitting minutes from Finance Committee meetings to the Board.

  • Work with the Director of Finance and the other finance/accounting staff on improving financial software and related reporting capabilities, with the goal of being able to generate historical statements of cash flow, and budgeted cash flow forecasted abilities, as well and forecasted balance sheets and cash flow statements.
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