3.5 Expenses and Accounts Payable

Published

April 18, 2022

Policy and Procedure 3.5 - Expense and Accounts Payable

3.5.1. Payroll

Policy

We pay staff members on the last day of the month. If the payday falls on a holiday, staff members will be paid on the last working day before the holiday.

Procedures:

The Operations Director processes payroll through Quickbooks.

3.5.2. Time Sheet Preparation & Approval

Policy

  • All staff members must complete a timesheet for each pay period.
  • All staff members should record actual hours worked plus all use of paid time off.

Procedures:

  • Employees complete timesheets in Quickbooks and submit them to their supervisors on the due date, based on the schedule produced at the beginning of the year.
  • Supervisors review, correct if necessary, and approve.
  • All paid time off balances are maintained within the payroll system, based on the information provided on approved timesheets.

3.5.3. Purchase & Procurement

Policy

  • Any expenditure in excess of $10,000 for the purchase of a single item should have bids from three (3) suppliers if possible. These bids will be reviewed by the Executive Director and the bid award must be specifically approved in advance by the Executive Director.
  • Due diligence must be followed for acquisitions of goods and services (resources), especially for procurement of resources that include costs for acquisition, operation, storage, maintenance, safeguards, or disposal. All acquisitions should be approved by the Executive Director. A request for an acquisition must be submitted at least 10 days before the resource must be ordered. A comparative analysis of available resources should be completed prior to procurement. The procurement of resources that cost more than $10,000 must follow a formal bidding process to ensure that the resource is acquired at a competitive price.

3.5.4. Bill Approval & Processing

Policy

  • Bills may be received by postal service or email. All bills are processed through Bill.com. All bills must be approved by the Executive Director. Approved bills will normally be paid within 30 days of receipt or as required by the agreement/bill terms. All accounts payable transactions must have supporting documentation adequate to demonstrate that costs claimed have been incurred, are allocable to the grant or other cost objective (personnel, indirect), and comply with applicable regulations.

Procedure

  • Bills will be opened, reviewed and scanned to electronic form by the Operations Director.
  • All goods and services purchased directly for a grant are coded to the appropriate Job Name in the accounting system.
  • Bills are entered into Bill.com by the Operations Director upon receipt.
  • All invoices are stored in Bill.com.

3.5.5. Expense Reimbursement

Policy

  • Staff members are reimbursed for approved travel and entertainment expenses. Staff members are asked to complete a record of all expenses for which they seek reimbursement and to submit receipts along with the expense record for reimbursement to the Operations Director. All reimbursements are processed through Bill.com.

3.5.6. Travel Expense

Travel Expense - see policy

3.5.7. Company Credit Cards

Policy

  • A credit card provides ESIP personnel with the ability to effectively and efficiently make purchases in relation to the Board of Directors approved ESIP budget.

Guidelines

  • The Executive Director will approve the issuance of all ESIP credit cards.
  • Credit cards will be issued in the name of the employee.
  • The card may be used only for the purchase of goods or services for official business of the ESIP.
  • All purchases will be within current budget line item amounts. (See Fiscal Procedure for further details.)
  • The person issued the card is responsible for its protection and custody, and shall immediately notify the credit card company and Executive Director if it is lost or stolen.
  • The person issued the card must immediately surrender the card to the Executive Director when employment with ESIP has ended.
  • The person using a credit card for purchases that cannot be substantiated as a necessary purchase for official business will be subject to disciplinary action.

Procedure

  • Credit card statements, along with receipts for all items to be paid by the ESIP, will be reconciled on a monthly basis by the Operations Director and reviewed by the Executive Director. Receipts must show the date, purpose, and name(s) for which the expense was incurred. Monthly credit card statements will be reviewed by the Treasurer for accuracy.
  • If receipt is lost or missing, employee will write a description of purchase, sign and date and Executive Director will also sign and date. This will be included with all other monthly receipts.

3.5.8. Expense Allocation

  • All cost items (labor, travel and other direct costs) which are incurred specifically for the performance of a particular grant or similar cost objective are direct charges provided that all like costs, incurred for the same purpose and in similar circumstances, can also be readily and economically identified as direct costs. Direct costs assigned to grants include direct materials used, labor hours directly worked on the grant, and equipment used exclusively for the grant, and goods or services received from other entities that are directly used in completing the grant. Cost items where (i) the allocability to specific cost objectives is not readily measurable or (ii) are insignificant in value (example: supplies) are charged to the applicable indirect expense pool.
  • Upon receipt of an executed grant or other agreement, the outside accountant creates a new customer/job in the accounting system. Service items and classes may be created as needed to facilitate cost tracking in accordance with grant requirements.
  • Direct expenses are all coded to the job via time entry, purchase orders, expense reports, bill, and other means of documenting expenses.
  • Indirect rate allocations to government grants are calculated outside of the accounting system by extracting cost data from the system and entering it into an Excel rate model.
  • Indirect costs are costs of resources jointly or commonly used to benefit two or more grants but not specifically identifiable with any one grant. Typical examples of indirect costs include costs of general administrative (G&A) services, technical support, depreciation, insurance, security, operational and maintenance costs for buildings and equipment, and utilities. As with direct costs, indirect costs can be incurred internally or for goods and services received from other entities.
  • All indirect costs are segregated into measurable pools of related costs. They are accumulated by logical groupings or pools that are based on the common relationships that they share with the business objectives. These pools are distributed to the benefiting or generating objectives by means of an allocation base common to all objectives which will share in the allocation of the pooled expenses. The basic classifications of indirect pools are fringe, indirect, and unallowable.

This Policy was approved by the Board of Directors of ESIP on October 17, 2017. Revisions to this policy were approved by the Board on September 15 2021.