If changes need to be made to financial policies or procedures, extra care should be given to make sure that the organization’s potential areas of risk and the system’s needs are taken care of and that all changes are thoroughly documented.

12.1.3 Overview of ASA Financial Management

12.2 General Financial Policies and Procedures

12.2.1 Record Keeping 

Financial records are maintained of every financial transaction. Revenue is always recorded in the month in which it was earned. These include the maintenance of receipts, invoices, bank statements, asset inventories, deposit slips, any transactions relating to financial transactions, 990 returns, and board financial reports. These can be found in the ASA Folder under financial documents. 

Currently, all of the accounting for ASA is done through Quickbooks. The ASA Quickbooks account allows 5 individuals (plus 2 accountants) to have unique logins. Because Quickbooks keeps a log of all changes made by each user, having unique logins provides transparency by showing the activity of each individual. The Chair of the board, Treasurer, and Bookkeeper(s) should all have their own login.

12.2.2 Budgets

Each year, an Annual Operating Budget is approved by the Board of Directors. The goal is to have approval from the Board within one month of the new financial year.

ASA’s Bylaws do not allow ASA to incur any kind of debt. So the approved budget may not exceed the money held in reserve or planned to be collected.

As the Financial Committee prepares the Annual budget, they should be careful to consider previous expenses, any adjusted or new programs, any projected changes, and inflation or other cost increases.The Board of Directors determines the Family Fee, Student Fee, and Class Fee each year. When deciding what fees should be, the Board of Directors strives to keep them as low as possible while also collecting enough to create a quality educational experience and to keep ASA financially solvent. 

Once the Board of Directors has approved the Annual Operating Budget, the Bookkeeper informs members of committees what their budget is for the year. The Bookkeeper may also start reimbursing submitted expenses.

If expenses exceed the approved budget in any category, the Bookkeeper notifies the Treasurer, and the Treasurer seeks permission from the Board to approve the reimbursement.

12.2.3 Reimbursement and Payments

Once the Board of Directors has approved the Annual Operating Budget, the Bookkeeper informs members of committees what their budget is for the year. The Bookkeeper may also start reimbursing submitted expenses.

Expenses need to be within the approved annual budget. If expenses exceed the approved budget in any category, the Bookkeeper notifies the Treasurer, and the Treasurer seeks permission from the Board to approve the reimbursement.

A reimbursement form should be completed that contains:

1 The name of the person seeking the reimbursement.

2. A copy of the receipt.

3. What the expense was for.

4. The total amount being requested.

Under no circumstances can an individual authorize their own reimbursement.

Receipts are required before making a payment for reimbursement. Print at home costs can be handwritten. Approval of other handwritten receipts can be requested in rare situations, and requires approval by 2 members of the Finance Committee including the chair or Treasurer.

12.2.4 Receipt of Donations Including Donations in Kind

In the instance of any project or any activity that attracts donations, including donations of any goods or services for whatever the intended purpose, the underlying policy requires that all such donations are accounted for, totaled and valued for the purposes of end of year reports and for reporting to the IRS. Donations for organizations or people outside of ASA do not need to flow through ASA. This will require some form of recording:

a. What item was received and in what quantities

b. The intended purpose of the donation, if specified by the donor

c. The estimated value of the donation using an assessment of current market rates

The principle of two hands being involved with each transaction continues to be applied in these instances. The Treasurer is to provide the board with a report at each board meeting on the volume of donations in kind received, including an estimate of their value.

In the instance where donations in-kind have been made via a third-party internet or other provider, the principles outlined above remain the same. 

Any in-kind donations that are sent to Aspire Scholar Academy need to be stored in a safe and appropriate place.

Where a donation has been specified for an identified purpose e.g. for a project, a report is to be filed to indicate how that donation was used e.g. how it was distributed, to whom etc.

12.2.5 Insurance 

Each year, at the same time as the board undertakes an assessment of any risks facing the organization, there will be a review of the insurance policies covering Aspire Scholar Academy. Insurance may include, but is not limited to, Directors and Officers liability Insurance, public or general liability insurance.

The Finance Committee is responsible for managing all insurance policies and warranty claims.  It is the responsibility of every board member, or volunteer, to notify the Treasurer when there has been a loss of property or damage to property that will be reported to the insurance company under the responsibility of ASA. The Treasurer is responsible for managing the claim process and reporting progress to the Board.

12.2.6 Monthly Reconciliations and Audits

The Treasurer will  have their own access to the electronic banking service and accounting software so that they will also have oversight of the bank accounts and can reconcile accounts.

Monthly reconciliations will be carried out for bank accounts, outstanding debtors and creditors and for income and key expenditure areas against the approved budget by the Treasurer. Reconciliations should include an audit of random reimbursements and any checks that have been written to a member of the Finance Committee.,Transactions involving the Treasurer must be reviewed by another member of the finance committee - preferably the Chair. The Treasurer reports that reconciliation has happened at board meetings.

12.2.7 Annual Financial Statements and Audits

Annual Financial Statements must be prepared in a timely manner and forwarded to the Board in time for its annual meeting in accordance with the rules and regulations of the Aspire Scholar Academy.

The Board could request to have an annual financial audit done by an outside expert, especially if there is a problem that the board has noticed. The Board could also decide to have internal audits performed by people within the organization. They check accounting records and for compliance with the financial procedures. 

12.2.8 Fixed Assets

There is a detailed register of all nondisposable fixed assets (worth more than $500 that is kept updated.)

The details of assets will include:

• Date of Purchase 

• Supplier

• Cost

• Guarantee Details

• Description of Asset

• Situation/placement in the organization

The asset register must be adjusted if an asset has been lost, replaced, sold or destroyed. This also applies if an asset has been re-located.

The  Facilities Committee will be responsible for the physical care and storage of all fixed assets. The Finance Committee  will be responsible for managing a central file of all fixed assets which will be made available on request to any board member or volunteer. In some instances, as in an audit from the IRS or other authority, they will seek and should be granted access to the fixed asset register.

An accounting of all assets should be conducted at the end of each financial year. The information from this review is provided to the Treasurer for the end of year accounts and for inputting into the 990 form.

12.2.9 Accounting Address

Because the bank address is associated with the Treasurer or a designated board member's home address, new checks should be ordered if the checks no longer reflect the designated address.

The current Treasurer’s home address and phone number are also the main numbers associated with the state, bank accounts and Paypal account. (See Section XYC)

Never allow signing of blank checks.  

12.2.10 Sales Tax Exemption and Refunds

As a 501(c)(3) organization, Aspire Scholar Academy is exempt from paying sales tax on purchases made in relation to our organization’s purpose. 

For purchases under $1000, a sales tax refund will be issued by submitting a Utah Sales Tax Refund Request - TC-62N. All receipts in relation to the expense will be saved in the regular bookkeeping folders and do not need to be submitted. They should all stay on file for 7 years in case of an audit.

For purchases over $1000, the exemption should be taken at the time of purchase using Form TC-721. Any member making a qualifying purchase of over $1000 should clear it with the Treasurer first to receive a copy of the form specific to their purchase.

12.3 Internal Financial Controls

12.3.1 Conflict of Interest

Managing conflicts of interest is one of the means of ensuring that funding is expended in the most effective way possible. Where contracts for services are granted to those with personal relationships with board or staff members, this opens the possibility of uncompetitive or outside of market rate prices and may jeopardize the non-profit status of our organization.

For the conflict of interest policy for board members refer to the bylaws. Where there exists a personal relationship with any vendor, multiple quotes must be obtained from other vendors and the related party within Aspire Scholar Academy will declare their conflict of interest and excuse themselves from any decision making.

A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization. 

(See https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations)

12.3.2 Financial Paper Trail

The following documents are stored in the Financial folder of the Google Drive. The Treasurer is responsible to ensure that all the documents are correctly stored but may delegate uploading to members of the Financial Committee.

• PDF monthly and end of year financial reports 

• Annual Budget

• Spreadsheet that details ASAP information regarding each category and class

• ASAP bank settlement report

• ASAP general ledger

• Bank statements

• 990 tax form

• Insurance Policies

12.4 Class Budgets

Mentors submit their recommended tuition amounts with their class descriptions. The Mentor Support Committee reviews and approves the tuition and adds the Operating Fee (if it hasn’t already been added). Once the add/drop period has ended, the Bookkeeper informs the mentors of the available budget for the class. 

Mentors are expected to stay within their allotted budget. If mentors submit reimbursement requests that exceed the budget amount, the Bookkeeper must get approval from the Board before reimbursing the mentors. (See Section XYC)

If there is money leftover in a class at the end of the year, the remaining budget amount is folded into the ASA emergency buffer.