Financial Policy

Introduction

Your Way Inc, is committed to maintaining the highest standards of financial management and accountability to ensure the effective and efficient use of resources in fulfilling our mission to support children and families. This policy outlines the principles and procedures for financial planning, management, and reporting.

Policy Statement

Your Way Inc, is dedicated to ensuring that all financial activities are conducted with integrity, transparency, and accountability. We strive to comply with all applicable laws and regulations and to adopt best practices in financial management.

This policy ensures that Your Way Inc, manages its financial resources responsibly, maintaining the trust of our donors and stakeholders while effectively supporting our mission to help children and families.

Scope

This policy applies to all financial activities of Your Way Inc, including budgeting, accounting, financial reporting, internal controls, and audit. It covers all employees, volunteers, and board members involved in financial management.

Financial Management Principles

  1. Integrity: All financial transactions and records must be conducted with honesty and integrity.
  2. Transparency: Financial information must be accessible and transparent to stakeholders.
  3. Accountability: All staff and board members are accountable for the financial health of the organization.
  4. Compliance: All financial activities must comply with applicable laws, regulations, and ethical standards.

Financial Planning and Budgeting

  1. Annual Budget:
    • The Executive Director, in collaboration with the finance committee, will prepare an annual budget reflecting the organization’s goals and priorities.
    • The budget must be reviewed and approved by the Board of Directors before the start of the fiscal year.
  2. Budget Monitoring:
    • Monthly financial reports comparing actual income and expenses to the budget will be prepared and reviewed by the Executive Director and the finance committee.
    • Significant variances must be investigated and reported to the Board of Directors with recommended actions.

Accounting and Record Keeping

  1. Accounting System:
    • An appropriate accounting system must be used to ensure accurate and complete recording of all financial transactions.
    • The accounting system must comply with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).
  2. Record Retention:
    • Financial records must be retained for a minimum of seven years or as required by law.
    • Records must be stored securely to protect them from unauthorized access, loss, or damage.

Internal Controls

  1. Authorization and Approval:
    • All financial transactions must be authorized and approved by designated personnel in accordance with the approved budget and authorization limits.
  2. Reconciliation:
    • Bank accounts must be reconciled monthly by someone other than the person responsible for processing transactions.
  3. Expense Claims:
    • All expense claims must be supported by original receipts and approved by the appropriate authority. 

Income and Revenue

  1. Income Recognition:
    • Income must be recorded when it is earned or received, in accordance with applicable accounting standards.
  2. Donations:
    • Donations must be recorded promptly and acknowledged with a receipt.
    • Restricted donations must be tracked separately to ensure they are used in accordance with donor intentions.
  3. Grants and Contracts:
    • Grant and contract income must be recognized according to the terms and conditions of the funding agreement

Expenditure Management

  1. Procurement:
    • All purchases must be made in accordance with the procurement policy, ensuring value for money and competitive pricing.
  2. Payment Processing:
    • Payments must be processed promptly and accurately, with appropriate documentation and approvals.
  3. Payroll:
    • Payroll must be processed in accordance with legal requirements and employment contracts.

Financial Reporting

  1. Monthly Reports:
    • Monthly financial reports must be prepared and reviewed by the Executive Director and the finance committee.
    • Reports must include income and expenditure statements, balance sheets, and cash flow statements.
  2. Annual Financial Statements:
    • Annual financial statements must be prepared in accordance with GAAP or IFRS and audited by an independent auditor.
    • The audited financial statements must be approved by the Board of Directors and made available to stakeholders.

Audit and Review

  1. Internal Audits:
    • Regular internal audits must be conducted to assess the effectiveness of internal controls and compliance with policies.
  2. External Audits:
    • An independent external auditor must be appointed to conduct an annual audit of the financial statements.
    • The results of the audit must be presented to the Board of Directors and any recommendations must be addressed promptly.

Fraud Prevention and Reporting

  1. Fraud Prevention:
    • Policies and procedures must be implemented to prevent, detect, and respond to fraud.
  2. Whistleblower Protection:
    • A whistleblower policy must be in place to protect individuals who report suspected fraud or financial misconduct.
  3. Reporting:
    • All suspected fraud or financial misconduct must be reported immediately to the Executive Director and the Board of Directors.
    • Investigations must be conducted promptly, and appropriate actions taken.

Review and Updates

This policy will be reviewed annually and updated as necessary to reflect changes in legislation, best practices, and organizational needs.