FINANCIAL POLICY

Purpose:

It is the Management’s responsibility to ensure efficient administration of the centre and accurate financial accountability to ensure that the goals of the centre are achieved.

Objectives:

•	To produce a budget each year to ensure that the Centre’s objectives can be carried out. 

•	To keep accurate and up-to-date records of all financial transactions.

•	To ensure the financial accounts are audited yearly and are available for inspection by parents on request.

•	To have adequate policies in place to ensure transparency and accountability within the daily operations of the Centre.

Implementation:

Financial authority will be carried out in accordance with the internal controls and procedures attached to this policy.

The Treasurer will:

•	Prepare draft financial policies and procedures for approval by the Management Committee;

•	Review financial policies and procedures to ensure effectiveness;

•	Produce an annual budget from 1 May – 30 April of every year, to be presented to the Management Committee for approval;

•	Review the annual budget in October of every year and present a revised budget (if necessary) to the Management Committee for approval.

•	Monitor any action required from the monthly accounts;

•	Check and validate reconciliation reports on a monthly basis;

•	Present the monthly accounts to the Management Committee with an explanation of budget variances;

•	Submit to the Management Committee completed annual financial statements from Accountant;

•	Ensure draft annual financial statements comply with all legislative requirements.

The Manager/Supervisor will:

•	Recommend to the Management Committee, policies and procedures which could be effective within the centre;

•	Ensure that the staff comply with approved financial policies and procedures;

•	Liaise with the Management Committee to prepare the draft annual budget;

•	Review the annual budget in consultation with the Management Committee;

The Administrator will:

•	Ensure all statutory returns such as GST, PAYE, ACC, FBT etc are submitted to Inland Revenue to meet the deadline dates so penalties are avoided;

•	Ensure all GST, PAYE, ACC, FBT etc are paid by the due dates (unless alternative payment plan agreed with IRD), so penalties are avoided;

•	Ensure that all required records are provided to the Accountants/Auditors to enable the accurate and timely preparation of annual financial accounts. 

•	Ensure the Centre’s asset register is kept updated and in agreement with financial accounts.

•	Carry out their duties in accordance with the internal controls and procedures attached to this policy.

•	Provide administrative advice to the Manager/Supervisor and Management Committee as required

HE WAKA EKE NOA 
EARLY LEARNING CENTRE

FINANCIAL PROCEDURES

Budget Criteria:

•	Cash out does not exceed funds on hand at any time.
•	Cash out can come only from assured income, e.g. when budgeting, expenses are to come only from assured sources such as MoE funding, parent’s fees etc.
•	Performance will be monitored on a monthly basis according to the following criteria:   
-	Funded Child Hours – target is 100%.
-	Proportion of Qualified Certified Teachers – target is 100%.
•	Financial Performance will be monitored on a 4 monthly basis to coincide with the receipt of bulk funding from the Ministry of Education. The following criteria will be applied:
-	Deviation of actual revenue from budgeted revenue, not to exceed 5%, and/or
-	Deviation of actual expenses from budgeted expenses, not to exceed 5%, and/or
-	Deviation of actual surplus from budgeted surplus, not to exceed 2.5%.
Any deviations are to be investigated, and measures to improve performance identified and implemented 

Financial Records:
•	Parents will sign an attendance register each day to verify that the child has attended the Centre;
•	Parents will be made aware that the annual financial statements are available for viewing;
•	All funding the centre receives from the Ministry of Education and Work and Income will be clearly shown;
•	The audited accounts will be sent to the Ministry of Education within the timeframe required.

Receiving Fees:
•	Only staff members that have been shown the receipt procedure are to receive fees and cash payments from parents. 
•	All cash payments and fees received are to be receipted in accordance with the receipt procedure detailed below.

Receiving Cash Payments:
•	The following procedure is to be followed when receiving cash payments:
-	Issue a receipt to the parent/caregiver;
-	On the receipt, check that the correct total cash paid has been annotated;
-	On the receipt, identify whether the payment was by Cheque or Cash;
-	Must be signed and dated by person receiving the payment; and
-	Total payment to be placed in the Childcare Fees Lock Box.
•	Only staff members that have been shown this procedure are to process cash payments.
•	If parent’s can claim a deduction in their tax returns for childcare fees on request, the centre will provide an end-of-year tax receipt in the first week of April each year.
Work and Income Subsidy:
•	Income support subsidy should be offered to all parents so that they can decide whether they are able to claim.
•	The Supervisor or Administrator is to sign the form for parents to claim the childcare subsidy through Work and Income.
•	Subsidy forms are to be stored securely for auditing accounts. 
Banking:
•	All cash/cheques must be banked at least weekly.
•	Cash held at the centre must be secured inside a lockbox at all times.
•	A record of each parent’s payments is to be entered into the Discover Childcare Software package, which is to reconcile with the bank statements.
•	Reconciliations should be completed each time a new bank statement is received or on a weekly basis, whichever is the soonest. One copy of the reconciliation is to be kept on file, and the second copy is to be submitted to the Treasurer to be verified.

Petty Cash:
•	All requests for petty cash are to be made to the Supervisor. The supervisor, in their absence, may nominate another staff member to approve petty cash requests.
•	If cash is to be held at the centre, a separate, lockable petty cash box with $300 in it is to be kept, to cover a week’s purchases of small items. This sum is to be reviewed on an annual basis to ensure it remains adequate.
•	The supervisor will reimburse staff from the petty cash and a receipt will be placed in the lockbox in it’s place.  
•	ATM withdrawals can be used to reimburse the petty cash box. The ATM receipt must  equal the cash paid out and also the amount recorded.
•	A reconciliation in Xero is to be completed each time the float is reimbursed. One copy is to be held on record, and the second copy is to be submitted to the Treasurer to be verified.
•	If the petty cash box float is short, investigate immediately.
PURCHASING
Purchase Order:
•	Approval from the Management Committee must be obtained prior to purchasing items over the value of $300. This is intended to include only items that are not included in, or which exceed the current budget.
•	The Management Committee will give due consideration to any purchase requests, taking into account the following considerations:
-	Whether the item has been budgeted for. Reasonable measures are to be taken to ensure that asset replacement is forecast at the time the annual budget is drawn up, however, any purchase will still be considered.
-	The need for the item and the benefit to be gained from its purchase;
-	Availability of grants if required;
-	The impact on the current financial state of the Centre; and
-	Any other relevant factors.
Payment of Accounts:
•	Upon receiving invoices or bills, ensure the following details are correct:
-	Are all the goods or services charged for?
-	Is this what was ordered and at the agreed price?
-	Are the calculations correct?
-	Was the expense properly approved before it was incurred?
•	The Administrator is to prepare the payment ensuring that the invoice amount is the same..
•	All Internet banking transactions are to be authorised by two approved persons.

Payment of Wages:
•	The Employment Contract Act requires a record be kept of employees’ wages.
•	Keep a record of the total number of hours worked, including statutory holidays.
•	Each staff member is to receive a pay slip setting out the calculation of pay whenever his or her pay alters.
•	Deduct PAYE and any other deductions such as childcare payments, child support, union fees etc.
•	Payment to Inland Revenue is immediately following each pay period
•	Information on Inland Revenue requirements can be obtained from myIR.

Payment of Goods and Services Tax:
•	All services, whether privately or community-owned must register with the Inland Revenue Department to collect GST if their turnover exceeds $60,000.
•	GST taxable sales for a childcare centre include:
-	Fees paid by parents and fees paid by Work and Income on behalf of parents.
-	Ministry of Education Funding Subsidy and special grants.
-	Any other grants, e.g. From the Lottery Board, ASB etc.
-	Receipts from advertising or sponsorship.
-	Sale of Goods purchased to raise funds, e.g. T-shirts
-	Net proceeds of raffles, etc. (if the prizes are donated, then GST is not payable on them).

Asset Register:
An asset register or inventory is a vital record of equipment and chattels for insurance purposes, as well as a requirement for your annual financial reporting.
Maintain an inventory, which records all the equipment in the centre, including large items such as white ware, computers etc.
This must be updated every time new items are purchased.
At least once a year, a full audit of assets must be undertaken.

DEBT MANAGEMENT POLICY

Purpose:
Sensible management of Centre finances, including control of the level of debt carried will enable our goals to be achieved and a high standard of care to be provided. Poor debt management creates problems for both the Centre and the families involved. 

Procedure:
•	All accounts are to be cleared fortnightly, unless by prior arrangement (agreed to by the Management Committee). If the amount owing is not paid within this period, the Management Committee has the authority to authorise the Supervisor to withdraw the child/children from the centre. 
•	The Administrator is to monitor all accounts, and implement the following actions if required:
-	 Notify parents/caregivers if payments are accumulating, and informing them of the debt management policy requirements.
-	 In consultation with the Supervisor, inform the elected Debt Management Officer of any emerging problems.
-	In conjunction with the Debt Management Officer, determine whether any further actions can be taken to prevent the situation from escalating.     
•	If a child has been withdrawn from the Centre for any reason, and there is an outstanding balance, the following procedure is to be implemented:
-	On the 20th of the month following the withdrawal, the parent/caregiver is to be notified by phone and mail, of their outstanding balance, and that payment is due immediately;
-	On the 20th of the second month following the withdrawal, the parent/caregiver is to be notified by mail of their outstanding balance, and that payment is due immediately.
-	On the 20th of the third month following the withdrawal, the parent/caregiver is to be notified by mail of their outstanding balance, and that their account will be forwarded to BayCorp for collection action immediately.
•	Any collection costs are the responsibility of the parents/caregivers.
•	The Management Committee and Supervisor have the right to request payment in advance, on a week-to-week basis, from any caregiver/parent who has had previous outstanding debts with the Centre.
•	Subsidy’s – When parents/caregivers are waiting for a subsidy from WINZ or any other type of subsidy they are responsible for paying 100% of their account until the subsidy becomes available. 

Date:	January 2024
	
Review Date:	January 2025
	
Consultation
Undertaken:	Management Committee	

            Links to 
           Licensing Criteria: GMA 9, 3