Internal Controls & Financial Accountability Policy

Internal Controls & Financial Accountability Policy Version: 12 June 2023

GIVEWISE FOUNDATION CANADA

(“GW” OR “GIVEWISE”)

INTERNAL CONTROLS & FINANCIAL ACCOUNTABILITY

POLICY OVERVIEW:

The GiveWise Foundation Canada Board of Directors and staff acknowledge, understand, and will seek to carry out their fiduciary responsibilities to the organization and the safeguarding of charitable funds donated to the organization. The board and officers acknowledge the responsibility for managing and preserving the charitable assets which must be used to benefit the public good.

The following guidelines and controls set forth the protection and oversight of charitable assets, that all assets are managed properly, and all investments are directed prudently and that the charitable purposes of the organization are carried out. A failure to meet these obligations is considered a breach of fiduciary duty resulting in liability for the board of directors and officers. The effective internal controls outlined in this document will help protect an organization’s assets and assist in their proper management.

The platform currently used as the donor-advised fund sub-ledger system (referred to as the “SLS”) is Flight DAF Management and the accounting management software (referred to as the “AMS”) is Sage 50 Pro Accounting.

  1. PURPOSE AND SCOPE OF INTERNAL CONTROLS: A primary responsibility of directors and officers is to ensure that the organization is accountable for its programs and finances to its contributors, members, the public and government regulators. Accountability requires that the organization comply with all applicable laws and ethical standards; adhere to the mission of GW; create and adhere to conflict of interest, ethics, personnel and accounting policies; prepare and file its annual financial report with the Canada Revenue Agency and make the report available to all members of the board and any member of the public who requests it. The development and maintenance of the organization’s internal controls will help to ensure accountability.

    The internal controls are systems of policies and procedures that protect the assets of an organization, create reliable financial reporting, promote compliance with laws and regulations and achieve effective and efficient operations. These systems are not only related to accounting and reporting but also relate to the organization’s communication processes, internally and externally, and include procedures for

    1. Handling funds received and expended by GW

    2. Preparing appropriate and timely financial reporting to board members and officers

    3. Conducting the annual audit of the organization’s financial statements

    4. Evaluating staff and programs

    5. Maintaining inventory records of real and personal property and their whereabouts

    6. Implementing personnel and conflicts of interest policies.

The scope of this document does not include full procedures, which can be referenced in function-specific procedure documents. Copies of these documents can be attained by emailing support@givewse.ca

  1. INTERNAL FINANCIAL CONTROL POLICIES AND PROCEDURES

    1. Procedures for Monitoring Assets

      The GiveWise Executive Director (“ED”) is responsible to prepare an annual budget with a strategic plan. These are reviewed and approved by the Board of Directors of GW. The ED will provide quarterly reports to the board, comparing actual receipts and expenditures to the budget with timely variance explanations.

      The Board of Directors of GW bears responsibility for hiring and reviewing the performance of the GiveWise ED ensuring that the Director adheres to the policies contained within this document. The board of GW provides oversight, meeting quarterly with the Executive Director and Director of Finance and Investments, reviewing financial statements. The Board acknowledges and complies with its obligation to donors, employees and the public to provide transparency of the organizations financial health and operations by providing a copy of the organization’s annual financial report.

      The Finance Committee of the Board is responsible to review all invested assets and the returns on a quarterly basis. Should an investment holding underperform, the Committee bears the responsibility to seek changes in the investments. The Investment Policy Statement must at all times must adhere to the Prudent Investor Rule. The Board of GW annually reviews its approved Investment Policy Statement.

    2. Policies For Internal Accounting & Bookkeeping Controls

  2. Contributions Receiving and Processing - GiveWise accepts contributions via cheque, credit card, Electronic Funds Transfer (EFT), wire transfer, security transfer, and Third Party transfers from other foundations. All contributions are verified by an Administrator for source of funds, accuracy, and compliance and then manually posted to the SLS and AMS, with the following controls based on each method of payment. SLS contribution records are reconciled on a monthly basis against the bank statements and AMS ledger reports by the Director of Finance.

    1. Cheques – Cheques are deposited within 24 hours of physical receipt. Prior to deposit, GiveWise will verify that the source of funds matches the donor and that the Giving Fund number is noted.

    2. Credit Card - All contributions via credit card are fully automated by the SLS and are verified by a GiveWise administrator. If required, upon verification, the administrator will manually correct any processing fees that were posted incorrectly due to difference from standard rates.

    3. Electronic Funds Transfer –

      1. Interac eTransfer – Interac eTransfers are automatically deposited to the GiveWise Donations account and are accompanied by an email notification that includes details of the source of funds and the Giving Fund number. These details are confirmed before the contribution is posted to the SLS and AMS.

      2. Third Party EFT Transactor (VoPay) – VoPay contributions are automatically created in the SLS in Pending state. Once transactions have been cleared in VoPay and verified, an administrator will change the status in the SLS to Cleared and will post into the AWS.

    4. Security Transfer - All Security contributions are posted once the transfer has been completed in full and the security has been liquidated to cash (if appropriate.)

  3. Grant Payments - GiveWise grants and gifts are processed and sent weekly using a payment summary report that is exported from the SLS and uploaded into the payment processing software. Payment totals are tracked in the AMS and reconciled monthly to the SLS and bank statements. The Payment summary file is reviewed and approved by a member of the Senior Management Team within GiveWise.

    Grant recipients’ direct deposit information is captured into the third party payment processing platform by a designated individual from the charity. No banking information is shared with GiveWise.

  4. Operating Expenses

    1. Please reference Addendum A of this document for a detailed guide to delegation of authority, particularly with regard to all expenditure and capital transaction approvals.

    2. General operating expenses will be paid via EFT, credit card, third party payments processor, or cheque. All operating invoices will be reviewed and approved by the ED and will be stored in secure Cloud based storage.

    3. Invoices

      1. Invoices will be saved in a secure Cloud based storage system where they can be accessed for approval and review.

      2. In concert with the approval process, invoices will be entered into AMS.

      3. Any contracts with other organizations will be paid based on the terms of the contract.

        1. Note: If monthly invoices are required, the contract will be set up as recurring of the term of the contract.

    4. Procedure - By the end of each month the ED or the Director of Finance will review the outstanding invoices that need approval.

  5. General Ledger Processing

    1. Policy - All business transactions for GiveWise will be represented in accordance with GAAP in the general ledger. Activity will be reviewed quarterly for trends and potential reclasses, with any final decisions being made by the ED. This includes monthly balance sheet reconciliations and reconciliation with the SLS and reviewed with the ED.

    2. Procedure

      1. Balance sheet and SLS reconciliations will be completed by an administrator and reviewed and approved by the Director of Finance by the end of each month for the prior month.

      2. Entries which are outside of the normal accounts payable, payroll, expenses and accounts receivable postings created by those modules will be entered as they occur or at month end. These include entries related to:

        1. Prepaid Expenses

        2. Prepaid Insurance

        3. Depreciation

        4. Operating Accruals

        5. Payroll Accruals

      3. Recurring entries will be set up for any activity requiring monthly entries.

  6. Access, Handling and Storage of Electronic Data

    In handling, accessing and uploading electronic files and information, all files are stored in secure Cloud based storage. No files are saved on individuals’ hard drives. The files are only accessed by individuals who have been provided that access for their specific tasks. Our file storage systems have built in backup in order to preserve and ensure the safety and security of all data. Any changes to electronic files are logged in the systems, including who has accessed the file and when. Multiple legacy versions of each file are also stored in these systems.

  7. Financial Reports

    1. Policy - Required grant reporting and standard financial reports (statement of activities, statement of financial position, and budget variance reports) will be completed and review by the end of business on the last day of the subsequent month. Reports will be placed in the GiveWise Cloud storage and the appropriate employees will be notified of the readiness of the reports.

    2. Procedure

      1. An internal calendar is kept monthly with all required tasks to complete month end. This calendar is updated as each month is completed.

      2. Once all GiveWise items have been completed, the Director of Finance will review a trend statement of activities and statement of financial position and present it to the Treasurer.

      3. This review will include a review of the current month’s general ledger activity, the bank reconciliations for the month.

      4. Significant changes month over month are noted and included with the month narrative.

      5. A quarterly and year to date report is completed along with a narrative for the Board of Directors.

      6. A monthly meeting is then scheduled to answer questions, ifnecessary.

  8. Audit RequirementsThe CPA Firm will be the point of contact for the designated audit firm. CPA Firm staff will make themselves available for questions, meeting and field work. Field work can be completed in CPA Firm offices.

    All audit requests will be completed and documentation placed in a shared folder. The audit team will be invited to the folder to access all document requests provided.

    The main GiveWise contact will be copied on the folder notifications.

  9. Personnel Policies

    Each position within GW is governed by a Job Description which clearly articulates roles and responsibilities. Human Resources maintains all copies of Job Descriptions including that of the board of directors and officers, employees, volunteers and consultants. All individuals are supplied with a copy of their Job Description and are evaluated at least annually on their job performance against the Job Description and documented in a report.

    All personnel policies, including vacation and sick leave, health insurance and other benefits, evaluations, ordinary and overtime compensation, conflicts of interest and code of ethics, and grievance procedures (including protections for “whistle blowers”) are in writing, accessible to all employees and given to all potential employees prior to hiring, with changes in policies communicated on a regular basis. Training is provided for new directors, officers, employees and volunteers

  10. Conflicts of Interest Policies and Code of Ethics

    Directors and employees of GW are required annually to review and sign a Conflict of Interest Policy & Disclosure at each AGM, which requires an individual to fully disclose any interest the individual and/or the individual’s family has in any entity that does business with the organization and that any change in the information concerning potential conflicts should be provided to the organization immediately. These individual(s) may not participate in any decision to approve doing business with the individual or any entity in which the individual has an interest, and such decision must be made by a disinterested majority of the board of directors.

    The GW Code of Ethics addresses transparency, fundraising solicitations, integrity in governance, and diversity.

GIVEWISE FOUNDATION CANADA

(“GW” OR “GIVEWISE”)

APPENDIX A: DELEGATION OF AUTHORITY

  1. Roles and Responsibilities:

    1. Board of Directors: The highest governing body responsible for overall strategic decision-making and financial oversight.

    2. Executive Director/CEO: Responsible for the day-to-day management of the organization, including financial operations.

    3. Finance Committee: Assists the Board in financial oversight, budgeting, and making recommendations regarding expenditure and capital transactions.

  2. Expenditure Approvals:

    1. Budget Creation: The Finance Committee, in collaboration with the Executive Director, prepares an annual budget for approval by the Board of Directors.

    2. Operating Expenditures: The Executive Director or designated staff members have the authority to approve routine operating expenditures within budgeted limits.

    3. Non-Routine Expenditures: Expenditures exceeding a certain threshold or falling outside the approved budget require additional approval. This might involve the Finance Committee, the Board of Directors, or a specific budget review process.

    4. Financial Policies: The delegation of authority should include guidelines for specific expenditure categories such as salaries, program expenses, administrative costs, fundraising, and other operational expenses.

  3. Capital Transaction Approvals:

    1. Definition: Capital transactions involve significant investments or acquisitions that have a long-term impact on the organization's assets or operations.

    2. Capital Budgeting: The Finance Committee, in consultation with the Executive Director, develops and presents a capital budget for approval by the Board of Directors.

    3. Capital Expenditures: The delegation of authority should define the threshold for capital expenditures that require specific approval, such as the purchase of property, equipment, or other major assets.

    4. Capital Investment Review: Depending on the organization's policies, the Finance Committee or the Board of Directors may review and approve capital investments, considering factors like financial feasibility, impact on mission, and risk assessment.

  4. Reporting and Accountability:

    1. Financial Reports: The Finance Committee or designated staff members are responsible for providing regular financial reports to the Board of Directors, highlighting the organization's financial position, expenditures, and capital transactions.

POLICY CONTROL:

  • Initial Ratification Date: 2021.06.11

  • Current Version: 2023.06.12

  • Date Policy Approved: 2023.06.23

  • Date for Review: 2025.06.23

Audit and Compliance: The delegation of authority should emphasize compliance with relevant financial regulations and the need for periodic audits to ensure proper financial management and accountability.

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