Financial Planning & Management
Section: 6
Table of Contents
IntroductionPage
6.0162-70
Fiscal Policy
6.0271-76
SECTION 6: FINANCIAL PLANNING & MANAGEMENT
POLICY 6.01: Introduction
ORIGINAL DATE: April 2009
REVISED/APPROVED: November 2012
Canadian Mental Health Association Huron Perth Branch (CMHA Huron Perth) conducts its fiscal management in a manner that supports its mission, values and performance objectives. Fiscal practices adhere to established accounting principles and business practices.
Design of Financial Planning and Management Activities
The CMHA Huron Perth financial planning and management activities are designed to meet the established outcomes for the clients served by the organization and organizational performance objectives. Financial planning is included in the organization’s performance monitoring activity. On a quarterly basis, actual costs for service are compared to targeted costs.
Budgets
A written operating budget is prepared for the organization on an annual basis prior to the start of the fiscal year. A draft budget is developed by the Finance Coordinator with the Executive Director, based on the previous year’s performance and what is known about the fiscal environment. The budget includes reasonable projections of revenue and expenditures and is presented to the Board of Directors at the beginning of each fiscal year (usually the May meeting after the year-end review is completed by the auditor.) The budget is accepted on a motion for
approval by the board.Once approved by the board, staff are advised of the confirmed budget for theyear and provided with reports on achievement of the budget.
Analysis of Actual Financial Results
The Finance Coordinator completes a financial report, comparing actual financial results to the budgeted costs on a monthly basis and provides this report to the Executive Director. The report is reviewed by the Agency Management Committee. Decisions are made by the Management Committee about year-end projections, offsets, possible surpluses in budget lines, overages on budget lines, and the explanation of variances.
The Executive Director reviews the monthly financial report with the Board Treasurer. These discussions may include the Finance Coordinator if necessary. The results of the monthly review are provided to the board by the Treasurer. The monthly Management Report which includes both service data and budget summary information by program is provided to the Board on a monthly basis. To streamline financial reporting, the Board is moving to a process where the financial information contained in the Management Report will continue to be reviewed monthly and a complete review of financial statements by the Board will take place on a quarterly basis.
Organization Review of Revenues, Expenses, Internal and External Trends
The Finance Coordinator, in collaboration with the Agency Management Committee, maintains an ongoing monitoring process for the organization, identifying and reviewing revenues, expenses, internal and external trends on a monthly basis.
The organization has an established relationship with the Ontario Ministry of Health and Long-Term Care (MOHLTC) and the Southwest Local Health Integration Network (SWLHIN) which provide the funding for the organization’s services. The MOHLTC funds CMHA Huron Perth's housing related programs. All other MOHLTC funded programs are managed through a relationship with the SWLHIN. This relationship is formalized in a legal agreement called the Multi-Sector Accountability Agreement (M-SAA).
The organization is required to confirm compliance with the M-SAA in quarterly and year end reports. The Executive Director provides a compliance report to the organization’s Board of Directors. The Board of Directors submits a separate declaration of compliance to the SWLHIN.
Compliance Report to Board and President Compliance Report to LHIN
Reporting RequirementsQuarter / Trial Balance / submitted / CAT / submitted
Due Date / Due Date
1st / Not Required
2nd / 31-Oct-12 / 23-Oct-12 / 07-Nov-12
3rd / 31-Jan-13 / 07-Feb-13
4th or ARR / 31-May-13 / 30-Jun-13
Schedule
Performance Standards Targets
Target / Actual / Actual / Actual
For Year / to Sep 30/12 / to Dec 31/12 / to Mar 31/13
Case Management
Face-Face/Phone Visits / 18,822 / 8,020
Individuals Served / 656 / 489
Group Sessions / 56 / 12
Operating Expenses / $968,956 / $547,774
Court Suport
Face-Face/Phone Visits / 5,393 / 1,035
Individuals Served / 146 / 67
Group Sessions / 6 / 0
Operating Expenses / $284,474 / $136,862
Support In Housing
Face-Face/Phone Visits / 2,340 / 585
Individuals Served / 44 / 88
Group Sessions / 0 / 0
Operating Expenses / $296,783 / $123,250
Consumer - Peer
Not Uniquely Identified Rec. / 1500 / 1436
Group Sessions / 272 / 179
Operating Expenses / $109,288 / $36,829
Consumer - Family
Individuals Served / 65 / 37
Operating Expenses / $15,152 / $14,922
RGI - Housing
Face-Face/Phone Visits / n/a / n/a
Individuals Served / n/a / n/a
Group Sessions / n/a / n/a
Operating Expenses / $296,783 / $76,259
Administration
Operating Expenses / $515,000 / $237,291
An Annual Information Report and a Budget are provided to the MOHLTC for CMHA Huron Perth housing programs, for all other programs, reports are provided to the SWLHIN through the Community Analyst Tool (CAT) and MIS Trial Balance. A Budget is submitted as required by the M-SAA and reports are submitted for the 2nd, 3rd and 4th quarter.
SECTION 6: FINANCIAL PLANNING & MANAGEMENT
POLICY 6.02: Fiscal Policy
ORIGINAL DATE: April 2009
REVISED/APPROVED: November 2012
Fiscal Policies and Procedures
The organization implements fiscal policies and procedures. These policies and procedures include procedures for internal control and procurement procedures.
Internal Control Procedures
•No fees are charged for client services.
•Payment for all goods and expenses are verified for accuracy and signed by a designated manager and the Executive Director before payment is issued. The Executive Director reviews all invoices with the Treasurer at each cheque signing. The Finance Coordinator may not approve a payment/invoice.
•Cheque signing authority is approved by the Board of Directors. Each cheque must be signed by one staff (Executive Director or Director of Operations andone volunteer board member (Treasurer or President).
•Bank reconciliations/bank statements are reviewed and signed monthly by the board Treasurer.
•Appropriate accounting records are maintained including: general ledger, cash/bank deposit records, general journal, accounts payable
records, and accounts receivable records. All financial records are securely stored for 7 years. Electronic records are backed-up off site.
•Policies for the management of petty cash are in place. Petty cash is used as required at the discretion of the Finance Coordinator. Receipts and signatures are collected when petty cash is disbursed. The agency replenishes the fund to the amount of $200.00.
•Fixed assets or Ministry funding are not used as collateral when borrowing money. Any loans are arranged in accordance with the agency’s borrowing by-law.
•Revenue is held in interest bearing accounts and interest is maximized through secured investments. A reserve fund of about $80,000 is in place for housing repairs.
•Harmonized Sales Tax is identified on all invoices and these costs are recovered.
•Any funds generated through donations or fundraising are accounted for separately from revenue received from the MOHLTC. Charitable receipts are provided in accordance with the Canada Revenue Agency guidelines and are signed by the Executive Director. No revenue from the MOHLTC is used to support fundraising costs.
•A conflict of interest policy is in place and no monetary payment is made to members of the Board of Directors. Staff and board members may not accept personal gifts, except small tokens of appreciation. Small gifts or financial honorariums may be made to staff or volunteers in recognition of service provided such as staff length or service awards, and volunteer recognition awards.
•An inventory of assets (furniture, fixtures, equipment) valued at $250 and over, is maintained on the main server by the Director of Operations. Assets are tagged and checked against inventory once per year.
•An official market appraisal of the Seaforth office and informal realtor assessments of rental properties is completed every 5 years.
•A bi-annual inspection of all properties is completed noting long term replacement/repair items such as roofing or other upgrades.
•Agreements for services (contracts/letters of agreement) are documented for all purchased services (e.g. lawn care, office cleaning, snow removal, information technology). The agreement identifies the provider, frequency of service, expectations, cost and payment details.
•All expenses incurred by staff/volunteers and board members must have prior approval by an agency supervisor. Approved expenses are reported on a standard claim form completed immediately following the event.
•Payroll policies and procedures are in place including the management of personnel files. An attendance reporting system is in place to keep track of health time, vacation, holidays, and leaves.
•All assets are disposed of at fair market value.
•The Board of Directors establishes a compensation rate for staff travel reflecting the costs of vehicle operation (currently $0.46 perkilometer). A monthly flat rate payment is established once a monthly travel pattern has been established.
•Staff provides a record of travel each quarter. An adjustment will be made to the monthly flat rate payment based on actual travel report each quarter. This system allows staff to receive travel reimbursement on a timely basis and assists the agency to budget travel expenses. Staff receiving a flat rate payment provides a copy to the Canada Revenue Agency of employment related vehicle costs on an annual basis.
•Many CMHA Huron Perth staff is required to maintain a home office and compensation is provided for this purpose. These staff members report this income to the Canada Revenue Agency when completing their income tax return.The compensation rate is currently $185.00, a T2200 is provided to staff for income tax purposes
Procurement Policy and Procedures
The procurement policy and procedures have been established to be fair and transparent to all stakeholders. Stakeholders have equal access to information on procurement opportunities, processes and results. Quality considerations guide all procurement decisions. Procurement procedures include the following:
•Members of the Board of Directors are required to declare a conflict of interest during the discussion at each meeting.
•A competitive bidding process is followed for the purchase of goods, services or construction of $5,000 or more. Any single acquisition of goods, a service agreement or construction/repair of $10,000 or more requires the approval of the Board of Directors. The competitive bidding process includes a request for a minimum of three written quotations. While the lowest quotation will generally
be awarded a project, notes will be kept to document the reasons for selecting a higher cost bid. Reasons for not selecting the lowest proposal may include use of materials, timing for completion, unsatisfactory references. The organization must be able to provide reasons to a bidder why their lower bid was not accepted.
•Service agreements over $5,000 annually are submitted to a competitive bidding process every three years.
•The organization’s auditor monitors the appropriate separation of duties: requisition, budgeting, commitment, receipt and payment.
•Any large construction/renovation project valued at $50,000 or more will require the oversight of a consulting engineer or architect who will supervise all phases of the specifications, bidding, selection and satisfactory completion of work.
•A written agreement between the organization and a supplier of ongoing services such as building maintenance, repairs, lawn care, and snow removal will be in place specifying the period covered by the agreement, expectations, and cost of the service. These agreements will be renewed on an annual basis.
Senior staff and board members are provided with the financial planning policies and procedures. Information is provided to assist in reading and understanding financial reports.
Policies and Procedures
An annual audit of the organization’s financial statements is conducted by an independent auditor on an annual basis to determine that the organization’s financial position is accurately represented in its financial statements.
There are several letters/reports provided by the auditor. Once the annual audit is completed the Executive Director, Treasurer, President and Finance Coordinator meet with the Auditor (s) to review the draft financial statements. The final statements and any management letters are presented at the Annual General Meeting by the Treasurer. Any issues emerging from the annual audit are addressed by the Board.
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