Finance & Program Operations

Revenue Recognition Policies

Gads Hill Center receives revenue from several types of transactions. Revenue from each of these types of transactions is recognized in the financial statements in the following manner:

1. Grant income - Monthly accrual based on the incurrence of allowable costs (for cost-reimbursement awards) or based on units-of-service (e.g., number of days attended and number of meals served).

2. In-Kind Contributions – Recognized as income when received (See below the section titled "Cost Sharing and Matching").

3. Program Income – Includes refunds and other applicable credits, and is recognized as a reduction in expenditures in the period in which it is received.

4. Nongovernmental Cash Contributions – Recognized as income when received, unless accompanied by restrictions or conditions (see the following section on contribution income).

5. Program-Related Fees – Monthly accrued based on assessed fee by intake department on the transaction form. The fees are set for each Child in the program.

Immaterial categories of revenue may be recorded on the cash basis of accounting (i.e., recorded as revenue when received) as deemed appropriate by the Chief Financial Officer.

Definitions

The following definitions shall apply concerning the policies described in this section:

Contribution – An unconditional transfer of cash or other assets to the Organization, or a settlement or cancellation of the Organization's liabilities, in a voluntary nonreciprocal transfer by another entity or individual.

Condition – A donor-imposed stipulation specifying a future and uncertain event whose occurrence or failure gives the promisor a right to return the assets it has transferred to the Organization or releases the promisor from its obligation to transfer its assets.

Restriction – A donor-imposed stipulation that specifies a use for the contributed asset that is either limited to a specific future time period or is more detailed than the broad limits resulting from the nature of the Organization, the environment in which it operates, and the purposes specified in the Articles of Incorporation and Bylaws. Restrictions on the use of an asset may be temporary or permanent.

Nonreciprocal Transfer – A transaction in which an entity incurs a liability or transfers assets to Gads Hill Center without directly receiving value in exchange.

Promise to Give – A written or oral undertaking to contribute cash or other assets.

Exchange Transaction – A reciprocal transaction in which Gads Hill Center and another entity each receive and transfer something of approximately equal value to the other.

CASH RECEIPTS

1. All checks and cash receipts received through the mail or by Gads Hill Center personnel are restrictively endorsed immediately by the assigned nonfinance department staff person and recorded in the cash receipts register listing the date received, payer check number, the amount received, and any restrictions.

2. The assigned staff person will make one copy of each cash receipt. Receipts are immediately delivered to the Finance department for deposit. They deliver one copy of the report to the Chief Executive Officer (or, in the absence of the Chief Executive Officer, a Senior Staff Member) for review, correction, and approval. The copy of the approved contribution receipt, along with copies of any supporting documentation, is then sent to the Development Office for their review and then forwarded to the Finance Office.

3. The Chief Financial Officer reviews the contribution receipt package and then gives it to the Accountant. The Accountant will prepare the bank deposit daily, attach a copy of the deposit slip and deposit receipt to the cash receipts copies, and forward the entire package to the Chief Financial Officer for approval before it is deposited. On receipt of the validated deposit slip, it is attached to the related cash receipts journal entry package (with check copies, approved contribution receipt form, letters, etc.) and coded according to the chart of accounts.

4. United Way Monthly Allocation wire transfer received at the beginning of each month is entered into the general ledger by the Chief Financial Officer. Monies sent to the operating account by the Government funding like Chicago Commons, City of Chicago, IDHS, IDHS-Teen reach, ISBE, and Other Government grants for payment of any voucher are posted To the general ledger by the Chief Financial Officer when the validated deposit slip is received.

5. Collections of currency are made at various times of the month. These monies (i.e., fees for services, rental fees, and program fund-raisers) are to be kept in the Finance Office as received and verified until the date of deposit. Cash receipts are deposited into the operating account intact and on a timely basis. Monies submitted to the Finance Office must be accompanied by a proper listing identifying the sources of the receipts and the approval of the appropriate Senior Staff Member.

6. Donated Goods: New goods are valued at approximate retail/wholesale values if not valued by the donor. The Development department will keep an accounting of all items donated, including the value placed on the goods by the donor. The donor maintains responsibility for the fair valuation of goods.

7. Donated Services: Are valued at fair market value of services contributed. The Development Office will keep an accounting of all donated services, including the amount of time donated, activity performed, and any professional statements associated with the particular service. A dollar amount will be assigned to each hour of service based on prevailing wages where appropriate. In some cases, the donor will be responsible for reporting fair service valuation.

Expenditures and Procurement

The following are Gads Hill Center’s procurement and purchasing procedures:

1. Gads Hill Center shall avoid purchasing items that are not necessary for the performance of the activities required by a Federal award.

2. Where appropriate, an analysis shall be made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal government. This analysis should only be made when both lease and purchase alternatives are available to the program.

3. Some form of cost or price analysis shall be completed for every procurement. Price analysis may be made in various ways, including comparing price quotations submitted or market prices. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability, and allowability.

4. Cost/price analysis for routine supplies are performed on an ongoing basis with the current suppliers.

5. Documentation of the cost and price analysis associated with each procurement decision shall be retained in the procurement files about each Federal award.

6. Gads Hill Center shall make all procurement files available for inspection upon request by a Federal awarding agency.

7. All contracts with vendors shall require the vendor to certify in writing that it has not been suspended or disbarred from doing business with any Federal agency. (Alternatively, the Organization may research potential vendors on the Excluded Parties List at the GSA\ website.)

8. Gads Hill Center shall not utilize the "cost-plus-a-percentage-of-costs method of contracting staff members with authority to approve purchases will receive a copy of and be familiar with Title 45 CFR part 75.329.

In-Kind Forms/Donations

in kind donation form.pdf

In-Kind Forms Volunteer and Time

In-Kind Volunteer $15.40.docx

Volunteer Time and Services

Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor will be included in in-kind if the services are an integral and necessary part of the program.

Examples of contributed services received and recorded as income and expense by Gads Hill Center include Classroom assistance, including reading to children, cleaning, setting up bulletin boards, etc. Clerical office assistance Child services such as dental check-ups

Volunteer services will be valued at rates consistently established by the Head Start and Early Head Start grantee.

Gads Hill Center requires volunteers to document and account for their contributed time in a manner similar to the timekeeping system followed by employees. Each program that uses volunteers will provide the volunteers a sign-in sheet which collects the following information:

▪ Date service was performed

▪ Volunteer name and address

▪ Hours donated

▪ Service provided

▪ Signature of volunteer sign-in sheets will be delivered to the Accounting Department monthly so they can be tallied, valued, and recorded as in-kind in the accounting records.

Supplies

Donated supplies must be used in the program and shall be valued at fair market value at the time of donation. Supplies can be counted as a match only if the program would have purchased such items themselves.

Credit Card

Certain purchases may require or be facilitated using the company's credit card (Fifth Third Bank or PNC Bank). Employees must check with the vendor first to see if they accept a company check before purchasing with a credit card. The credit card should be used as a last resort or with vendors who do not carry checks. If they need the check at the time of delivery of items, submit the check request a week in advance.

Procedures for the usage of the credit card

Get a Purchase Order from the receptionist

Fill out the purchase order with the following information

– Item Description

– Quantity

– Price

– Total (if known)

– Account Number

– Department

– Program

– Location

– Funding Source (If applicable)

After the purchase order is filled out obtain leader's signature and make sure the person who will be using the credit card writes their name in the requested by line. The credit card needs to be signed out in the finance office. Once the purchase is made, receipts, original purchase order, and credit card must be given to the finance office on the day of the purchase or within 24 hours.

Under no circumstances will the credit card be used by anyone other than the person who was given the card.

Check Request

The check request form is used for payment of services or reimbursement for purchasing items out of pocket to use in the organization. The check request form is also used to pay employees for mileage when they travel to a training, meeting, site to site, home visit or etc. Under no circumstance should the employee request mileage if the starting point is home. The mileage should be from the site to your destination not home to destination.

The check request form needs to be turned in by 3:00 PM on Tuesday two weeks before the check is needed if mailed, and one week before if check is picked up.

Checks are cut every Wednesday, signed on Thursdays, and prepared and sent out on Fridays at 4:00 PM.

If checks will not be ready on a Friday due to a lack of signatures an email will be sent out to everyone letting them know.

The check requests need to be properly filled out and signed by a leader (Maricela, Michael, Ernesto, Andrew, Krystal, Marsha, Sara and Cindy) because if it’s not it will be returned to the employee, and payment will be delayed.

Employee Reimbursements MUST BE submitted after the month ends in one check request. All receipts should be added to one check request. If you know you will need to make multiple purchases throughout the month avoid submitting multiple check requests. The check request should have all original receipts and travel forms (if used).

Contractor check requests submitted for payment should be based on how it was specified in the contract. If in the contract it says the contractor will get paid monthly the check request should be done on a monthly basis. The check request should include an invoice or timesheet with the total of hours worked.

The agency has a tax-exempt letter. Please make sure to use it when making purchases. Most vendors accept it if taxes are included on the check request for vendors who do accept it the amount will be deducted and only the subtotal will be allowed.

The mileage reimbursement rate is $0.625 which is the federal amount. When you submit your mileage reimbursement for the first time please attached a printout of Google maps or MapQuest directions. Also, submit directions for places you have not submitted before. This will help verify that the amount in the travel form is correct.

Purchase Orders

The purchase order form allows for only one vendor to be included on all requests. These forms are located at the Reception desk at each site and each form is pre-numbered to allow the Finance office to keep track of them. Purchasers must indicate the program where the supplies should be charged to, and if known, the applicable funding source. Once completed, obtain approval from the appropriate member of the leadership team, and then place the order. Once the order has been placed, submit all the documentation (including the purchase order) to the Finance Office.

Financial Documents 2.27.23.pdf

Petty Cash

Petty cash is a revolving fund maintained at a constant (impress) amount to cover local emergency needs and small cash expenditures such as postage, minor office supplies, travel advances, etc. The general ledger petty cash account balance should be the amount of cash that was initially advanced to the custodian of the petty cash account. Only when the amount initially advanced is increased or decreased should the general ledger balance change.

Petty cash should be maintained at an impress balance of $ 500.

The Contract Specialist will act as a custodian of the petty Cash.

Petty cash disbursements are limited to $60.00 in amount.

Three types of signatures are required for petty cash request:

1. Those individuals receiving the funds,

2—the coordinator of the Program, and 3. One member of the Leadership team.

No individual may perform two of these functions, except that the Chief Executive Officer may authorize expenditures and sign checks.

The person authorizing an expenditure certifies that a) the expenditure falls within the approved budget for that program and b) that the expenditure is appropriate.

The petty cash custodian signing the reimbursement request certifies that the listed amounts have been disbursed for the accounts and projects listed and that the remaining cash amount is as stated.

The person signing the check approves reimbursement of that amount to the custodian's name based on the abovementioned information.

Each petty cash disbursement must have legible, itemized receipts as backup, and for funded programs, the vendor's name must be pre-printed on the receipt. Where the expenditure's purpose is unclear (i.e., parking fee), it should be stated on the petty cash slip.

Once the petty cash account is nearly depleted and needs to be replenished, a summary of all petty cash vouchers must be prepared and submitted to the Chief Financial Officer as an invoice ledger. The cash on hand plus the non-reimbursed petty cash vouchers should always total the Petty Cash amount.

Petty cash is a revolving fund constantly maintained to cover local emergency needs and small expenditures such as postage, minor office supplies, travel advances, etc. Petty cash disbursements are limited to $60.00.

The following needs to be filled out) Name

b) Date

c) Department) Program) Description) Total amount (maximum $60.00)

g) Account Charged

Three types of signatures are required for petty cash request:

1. Those individuals receiving the funds;

2. The coordinator of the Program, and

3. One member of the Leadership team.

The person authorizing an expenditure is certifying that) The expenditure falls within the approved budget for that program, and) The expenditure is appropriate.

Each petty cash disbursement must have legible, itemized receipts as a backup; for funded programs, the vendor's name must be pre-printed on the receipt. Where the expenditure's purpose is unclear (i.e., parking fee), it should be stated on the petty cash slip. Receipts must be submitted on the same day of the purchase.

Micro Purchases

Aggregate procurements of supplies or services that do not exceed $3,000. Gads Hill Center will distribute micro-purchases equitably among qualified suppliers.

Small Purchases

Standard applies to procuring services, supplies, or other property that do not cost more than the simplified acquisition threshold (up to $150,000 except for construction)

Sealed Bids

Formal advertising. Bids are publicly solicited, and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid conforming to all material terms and conditions of the invitation for bids. The Sealed bid method is the preferred method for procuring construction.

1) For sealed bidding to be feasible, conditions should be present

(i) A complete, adequate, and realistic specification or purchase description is available

(ii) Two or more responsible bidders are willing and able to compete effectively for the business, and

(iii) The procurement lends itself to a firm fixed price contract, and the selection of the successful bidder can be made principally based on price.

2) If sealed bids are used, the following requirements apply:

(i) Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised;

(ii) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to appropriately respond;

(iii) All bids will be opened at the time and place prescribed in the invitation for bids, for local, and tribal governments, the bids must be opened publicly;

(iv) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder, Where specified in bidding documents, factors such as discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and

(v) Any or all bids may be rejected if there is a sound document reason.

Procurement by competitive proposals, the technique of competitive proposals, is normally conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for using sealed bids. If this method is used, the following requirements apply:

Competitive Proposals

Procurement by competitive proposals, the technique of competitive proposals is usually conducted with more than one source submitting an offer, and either a fixed price or cost-reimbursement type contract is awarded. It is generally used when conditions are not

appropriate for the use of sealed bids. If this method is used, the following requirements apply:

(1) Request for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;

(2) Proposals must be solicited from adequate number of qualified sources;

(3) The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and for selecting recipients;

(4) Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and

(5) The Non-Federal entity may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional service whereby competitors’ qualifications are evaluated and the most qualified competitor is selected. Subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposal effort.

SPECIAL PURCHASING CONDITIONS

Emergencies:

Where equipment, materials, parts, and/or services are needed, quotations will not be necessary if the health, welfare, safety, etc., of staff and protection of Agency property, is involved.

Single Distributor/Source:

Sole source purchases will be made only when solicitation of multiple vendors is not feasible and one of the following conditions apply:

▪ The item or service is only available from one source,

▪ The situation is a public emergency,

▪ The awarding agency approves the purchase, or

▪ Competition is deemed inadequate (insufficient bidders)

If Director of the program is not available any Leadership member can approve the request.

If the Chief Executive Officer is not available the Chief Financial Officer or the Chief Development Officer can approve the request.

The Chief Executive Officer is the only officer authorized to enter into any contract on behalf of Gads Hill Center. The Chief Executive Officer may, at his/her discretion, delegate the authorization of routine contracts of less than $ 3,000 to the Chief Development Officer or Chief Financial Officer. These policies shall also apply to renewals of existing contracts.

Evaluation of Alternative Vendors

Vendors shall be evaluated on a weighted scale that considers the following criteria:

1. Adequacy of the proposed methodology

2. Skill and experience of key personnel

3. Demonstrated experience

4. Other technical specifications designated by the department requesting proposals

5. Compliance with administrative requirements of the request for proposal (format, due date, etc.)

6. Vendor’s financial stability

7. Vendor’s demonstrated commitment to the nonprofit sector

8. Results of communications with references supplied by vendor

9. Ability/commitment to meeting time deadlines

10. Cost

11. Minority- or women-owned business status of vendor

12. Other criteria (to be specified by the department requesting the proposal)

Not all of the preceding criteria may apply in each purchasing scenario. However, the department responsible for the purchase shall establish the relative importance of the appropriate criteria before requesting proposals. It shall evaluate each proposal based on the criteria and weighting that have been determined.

After a vendor has been selected, the final selection shall be approved by the Chief Executive Officer before entering into a contract.

ACCOUNTS PAYABLE MANAGEMENT

Gads Hill Center shall strive to maintain efficient business practices and effective cost control. A well-managed accounts payable function can assist in accomplishing this goal from the purchasing decision through payment and check reconciliation. The following are general policies for accounts payable:

▪ Assets or expenses and the related liability shall be recorded by an individual who is not responsible for ordering and receiving.

▪ The amounts recorded shall be based on the vendor invoice for the related goods or services.

▪ The vendor invoice shall be supported by an approved purchase order where necessary and shall be reviewed and approved by the purchaser prior to being processed for payment.

▪ Invoices and related general ledger account distribution codes shall be reviewed prior to posting to the subsidiary system.

The primary objective for accounts payable and cash disbursements is to ensure that

1. Disbursements are properly authorized.

2. Invoices are processed in a timely manner.

3. Vendor credit terms and operating cash are managed for maximum benefits.

Budget Procedures

A budget shall be prepared on a yearly basis. The Leadership Team, with the Chief Executive Officer, are ultimately responsible for the preparation of the budget. All program coordinators should be involved in the initial determination of what financial needs will be required for the upcoming year.

After the initial draft of the budget is prepared, the Chief Executive Officer and Chief Financial Officer meet with the Treasurer and other members of the Finance Committee who shall review the budget for completeness and accuracy, based on known future events/requirements and past knowledge of the Agency’s business.

A final draft of the budget shall be sent to the Board of Directors for their review and approval. The final budget shall be approved prior to the start of the Agency’s fiscal year (i.e. July 1).

On a monthly basis, the Finance Committee, Chief Executive Officer, and Chief Financial Officer shall review the budget to actual for revenues and expenditures. When events/funding occurs that materially affect the feasibility of the current year budget, a review, and possible update shall be made by the Finance Committee, Chief Executive Officer, and Chief Financial Officer. If it is determined that the budget needs to be updated, a revised budget shall be sent to the Board of Directors for their review and approval.

Program/ Sites and Budget Aquesition

Below is the information that needs to be used when filing check requests and purchase orders for North Lawndale.

· Cloud, Rainbow, Sunshine, and Butterfly (HS/PFA)