Policies

Smithfield Homeowners Association

FINANCIAL & CONTROL POLICIES

This policy for financial management clarifies the role, authority, and responsibility for financial management

activities and decisions, and describes and documents how financial management decisions will be carried out within the

organization.

AUTHORITY

The Board of Directors is ultimately responsible for the financial management of all activities. Expenditures greater than $2,000 must be approved by the Board of Directors. The President is authorized to enter into contracts for activities and projects that have been approved by the SHOA Board. However, once a proposed contract has been approved by the SHOA Board, the President may designate to another Board member, a Committee Chair or managing agent the authority to execute such contract on behalf of SHOA. The President and the Treasurer are each authorized to sign SHOA checks. The Treasurer, with confirmation by the President, is authorized to initiate transactions with FDIC-member institutions to provide cost-effective return on investment (i.e. open/close deposit bank accounts and purchase Certificates of Deposit).

RESPONSIBILITIES

The Board of Directors shall:

- Require three (3) competitive bids for items and services costing in excess of $2,000 per unit or contract. The process of obtaining bids may be delegated to a specific board member or committee chair as directed by the Board.

-- Approve and award bids for service or equipment and materials. Selection of products, provider or vendor will be

based on cost, service and other elements of a contract. The Board is not required to accept the lowest cost proposal.

-- Approve a proposed operating budget to present to the general membership which allows for annual deposit of

monies to the Capital Reserve account with a goal to achieve and to maintain a Capital Reserve balance of $30,000. -- Insure against theft and casualty losses to SHOA and against liability losses to Board members at levels indicated in consultation with

appropriate professional resources.

-- Review financial reports at each Board meeting.

The Treasurer shall:

-- Remit prompt payment for accounts payable owed by the organization.

-- Process disbursements to designated persons authorized to make purchases on behalf of the organization.

-- Provide reimbursement to authorized persons for expenditures made for the benefit of the organization.

-- Assure that the Board of Directors receives accurate and timely financial information and reports.

-- Prepare and submit the Annual Report to the State of Tennessee.

-- Prepare or oversee the preparation and submission of the annual Income Tax report to the Department of Treasury, IRS.

-- Maintain detailed financial records and receipts as required by law.

-- Use reasonable assumptions and projections and actual cost analysis as a basis for formulating the annual operating budget.

-- Submit a proposed operating budget to the Board of Directors in a timeframe which allows Board approval before

required distribution to the membership prior to the Annual Meeting.

Financial Policy approved and adopted at the

SHOA Board Meeting on February 9, 2021.