Financial Management Policy and Procedures

This policy and procedures, or parts of this policy and procedures have application to all employees, members of BCOM and Branch Delegates to National Council as appropriate

PURPOSE

This policy and procedures are established to assist the Branch Secretary, the Finance Committee and the BCOM in overseeing all aspects of the financial management and operation of the Union including financial risk management strategies and financial policies and procedures.

POLICY STATEMENT

HSUSA employees and Branch Officers are expected to uphold the integrity of the Branch and Union in the highest manner when undertaking their duties and in their undertakings with members, employers, outside organisations and suppliers.

• HSUSA employees and Branch Officers must behave honestly and with integrity in the course of their employment or duties.
• HSUSA employees and Branch Officers must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with their Branch or Union employment or duties.
• HSUSA employees and Branch Officers must not make improper use of inside information or use the employee’s or Officer’s duties, status, power or authority in order to gain, or seek to gain, a benefit or advantage for the employee, Officer or for any other person.

POLICY

1. Definitions

‘Act’ means the Fair Work (Registered Organisations) Act 2009.

‘Administrative Manager’ means the person appointed to manage the administrative operation of the Branch on a day to day basis and appointed as such by resolution of the BCOM.

‘BCOM’ is the Branch Committee of Management elected in accordance with the rules of the Union.

‘Branch’ refers to the Health Services Union, South Australian Branch.

‘Credit Card’ also means ‘Debit Card’.

‘Finance Committee’ means the Committee established by resolution of the BCOM.  The Finance Committee performs all of the functions and duties required under the registered rules of the Union.

‘Bookkeeper’ means the person appointed to manage and operate the financial accounts of the Branch on a day to day basis.

‘HSUSA’ means the Health Services Union, South Australian Branch.

‘Health Services Union’ or ‘HSU’ means the National Union (as defined by the rules) of which HSUSA is a Branch.

‘Immediate Family’ means any child, stepchild, parent, step-parent, spouse (including de facto), sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, and any person (other than a tenant or employee) sharing the household of the employee or Branch Officer.

‘Officer’ is an Officer of the Branch in accordance with the rules of the Union.

‘Union’ means the Health Services Union.

2. Branch Supplied Credit/Debit Cards

2.1       Branch Credit/Debit Cards will be supplied to the Branch Secretary and any other employee of the Branch expressly approved by the Branch Committee of Management.

2.2       All Credit/Debit Cards issued to Branch Officers and employees are to be used only for bona fide Branch business and are to be used in accordance with these procedures.  Credit/Debit Cards may be used for items that are part of the normal operating expenditure and other general administration expenditure as defined in clause 3.  Credit/Debit Cards may only be used for items that are part of the extraordinary operating expenditure in accordance with these rules.

2.3       Other than as provided for in Clause 5 of this policy, cards must not be used for personal expenditure not associated with bona fide union business.

2.4       No cash withdrawal facilities shall be available from Union Credit/Debit cards.

2.5       Branch Credit/Debit Cards will only be issued to individuals and those individual card holders are responsible for all expenditures made on their card.

2.6       The limit on all Credit/Debit cards held by the Branch Secretary in the name of the Branch shall be $6,000.

2.7       The limit on all Credit/Debit cards held by all others authorised in the name of the Branch shall be $2,000.

2.8       Credit/Debit card expenditure on any item of expenditure which exceeds $1,000 for card holders, other than the Branch Secretary, must have the prior approval of the Branch Secretary.

2.9       Receipts and tax invoices are to be kept for all Credit/Debit card expenditure and the card holder must provide a signed monthly reconciliation indicating that all expenditure was authorised expenditure and in accordance with these policies and procedures.

2.10     The Bookkeeper is to ensure that all Credit/Debit card expenditure have associated receipts and tax invoices and that monthly reconciliations have sufficient detail supplied by the card holder, including by the Branch Secretary.

2.11     The Branch Secretary must sign each employee’s monthly reconciliation confirming that the expenditure was authorised and made on the items referred to in sub-clause 2.2 and submit the reconciliation to the Finance Committee.

2.12     The Bookkeeper and Branch Secretary must immediately investigate any doubt or discrepancy with respect to any unauthorised expenditure and report such investigation, finding and action to the Finance Committee.

2.13     The Branch President must review and sign off on the Branch Secretary’s monthly reconciliation confirming that the expenditure was made on the items referred to in sub-clause 2.2 and must immediately investigate any doubt or discrepancy with respect to any unauthorised expenditure and report such investigation, finding and action to the BCOM.

3. Normal Operating Expenses

(General administration and reasonable incidental expenditure)

3.1       The Branch Secretary is authorised to make and/or commit to normal operating expenditures. There may be other expenditure, other than those defined in sub-clauses 3.2 and 3.4, that is expenditure on the general administration of the union or for purposes reasonably incidental to the general administration of the union (“other general administration expenditure”). The Branch Secretary is authorised to make and/or commit to other general administration expenditure consistent with the approved budget, and a specific policy or program direction issued by the BCOM.

3.2       “Normal Operating Expenditure” includes but is not limited to the following items of expenditure:

Affiliation Fees (other than National Union Capitation Fees), Air Fares, Accommodation, Audit Fees, Cleaning and Housekeeping products, Computer Support, Computer and associate Hardware, Computer Software, Meeting Expenses, Newspapers, Office Equipment Maintenance, Petrol, Parking, Petty Cash, Postage, Printing, Taxes, Rubbish Removal, Rent, Internet and Telephones, Equipment Rental, Stationery , Subscriptions, Staff Training, Conference Attendance, Employee Expense Claims, Utilities, Taxi, Airport Parking, Vehicle Lease, Insurance Premiums, Storage Rental, Campaign Expenses and Member Industrial Servicing Costs.

The limit of expenditure on any of the above items without the approval of the BCOM is $5,000.

3.3       Superannuation, Wages, Australian Taxation Office

Expenditure on the above items is as incurred. The wages paid to any Branch Officers and employees are to be in accordance with the resolution of the BCOM setting those wages.

3.4       Legal Expenses

Legal expenses are not normal operating expenses and require approval by resolution of the Finance Committee or BCOM.  Where possible the engagement of legal advice/representation should be approved by the Finance Committee or BCOM prior to engagement.  It is recognised however that prior approval is not always possible.  Where it is necessary to engage legal advice/representation without prior approval then the Branch Secretary may make the decision and the decision must be considered for approval at the meeting of Finance Committee or BCOM following the engagement.

3.5       The Branch Secretary must scrutinise any expenditure incurred by, or on behalf of, the Branch prior to the expenditure being incurred.    In relation to cheques and electronic funds transfers, the noting of the approval, signing and dating of the approval is to be in accordance with sub-clauses 9.2 and 10.2 of this policy.

4. Extraordinary Operating Expenses

(Not general administration and reasonable incidental expenditure)

4.1       This clause applies to expenditure that is not expenditure on the general administration of the union or for purposes reasonably incidental to the general administration of the union (“extraordinary expenditure”).

4.2       The Branch Secretary is authorised to make expenditure up to $5,000 on items or services of an extraordinary nature.  Where such expenditures occur, they must be reported to the Finance Committee at its next meeting.

4.3       Extraordinary expenditure over $5,000 and up to $10,000 requires prior approved by the Finance Committee or BCOM. Extraordinary expenditure over $10,000 requires prior approval by the BCOM. The approval of extraordinary expenditure by Finance Committee must be reported to the next meeting of the BCOM.  The approval of extraordinary expenditure by the Finance Committee or BCOM must be minuted.

5. Union Funds on Personal Expenditure

As a general rule the use of union funds must not be used for personal expenditure not associated with bona fide union business.

However it is recognised that there may be situations or occasions where it is difficult to reasonably separate business and personal expenditure on the same invoice.

An example is where accommodation on a trip away from home may be a mixture of work related and personal related expenses and appear on one invoice.  The same may apply with items such as airport parking where a trip has a component of business and personal associated with it.

Where these circumstances arise, the following will apply:

• The Officer or employee must reimburse the Union in full as soon as the amount of personal expenditure is known and, unless it is unreasonable to do so, before the Union incurs any actual expenses (eg before a Credit/Debit card payment or invoice is paid).
• The personal expenditure must be reported to the next meeting of the Finance Committee by the Branch Secretary detailing the actual personal expenditure, the reasons for the expenditure and the date of repayment and the full details noted in the minutes of the meeting.

6. Opening and closing of accounts in the Name of the Branch

Financial institution accounts in the name of the Branch may only be opened or closed by resolution of the BCOM.

7. Financial Institution Accounts in the Name of the Branch

7.1       Any Investment Accounts must be set up in such a way that funds may only be transferred to the Branch’s Operating Account.

7.2       Any union funds not required to be held in the Operating Account will be held in the Investment Account.

8. Signing of Cheques

8.1          Cheques will be signed by the Branch Secretary, and two other Officers of the Union.

8.2          Cheques will normally be prepared by the Bookkeeper on the approval of the Branch Secretary.

8.3          The Branch Secretary must sign a cheque first to indicate that the payment is approved.

8.4          Under no circumstances are blank cheques to be pre signed.

9. Electronic Funds Transfers

9.1       Bank procedures for Electronic Funds Transfers (EFTs) must be set up in such a way that it is not possible for one individual to begin and complete an EFT transaction.

9.2       Except as provided for in clause 11, EFTs will only be prepared by the Bookkeeper with the approval of the Branch Secretary.

9.3       Once an EFT transaction is authorised by the Branch Secretary, it may then be uploaded for EFT payment authorisation.

9.4       All EFT transactions must be authorised by the Branch Secretary, and two other Branch Officers approved by the BCOM.  The Branch Secretary is to authorise the expenditure first indicating that he or she has approved the expenditure.

9.5       EFT transaction reports will be examined by the Branch Secretary following EFT transactions to confirm that they are the same as the transaction that was approved.

10. Direct Debit Transfers

10.1        All Direct Debit Transactions must be authorised by the Branch Secretary, and two other Branch Officers approved by the BCOM in the month the expenditure occurs.

10.2        All Direct Debit Transactions will be examined by the Branch Secretary following the transaction to confirm that the transaction was the same as the invoiced amount.

11. Approval of Wages

The payment of wages will be by a standing periodic payment arrangement whereby each fortnight the wages to be paid are automatically released to the employee’s bank account.  The Committee of Management must authorise the amount of the periodic payment by resolution.  Any additional payment that the employee is eligible for such as annual leave loading etc, will be paid to the employee by cheque of by EFT in accordance with this policy.

12. Purchasing Goods and Services

12.1     Nothing in this Clause serves to limit the application of Clauses 3 or 4 of this Policy.

12.2     The engagement of barristers and Legal Services has a standing exemption from the application of this Clause.

12.3     The following applies for the purchase of good and services:

12.4     Exemptions from obtaining quotations may only be made by resolution of the Finance Committee or BCOM and the reasons for an exemption must be documented in the minutes.

12.5     Purchases from Regular or Preferred Suppliers

While the use of regular or preferred suppliers is an appropriate means of purchasing smaller valued goods and services (eg stationery supplier, provision of telecommunications and IT services, provision of insurances, etc) it is important to recognise and manage any risks to good procurement practice which could arise from a tendency to give certain suppliers repeat business.

The period of any contract or arrangement will depend upon a number of factors however, as a guideline such contracts and arrangements should be market tested at least every three (3) years.

13. Dining and Entertainment Expenses

13.1     It is recognised that from time to time it may be appropriate for Branch Officers and authorised employees to incur dining or entertainment expenses associated with conducting the business of the Branch or Union. The authorisation of the expenses shall be in accordance with the relevant clause in this Policy depending on the nature of the payment.

13.2     Union Business Meals

“Union Business meals” are meals taken with stake holders, during which a specific Branch or Union business discussion takes place.

The Branch will pay or will reimburse Branch Officers and employees for the reasonable cost of Branch or Union business meals when they are directly related to, or associated with, the active conduct of Branch or Union business. The amount expended on Branch or Union business meals must be reasonable, publicly defensible and not open to perceptions of excessiveness.

Business meal expenses require an itemised receipt and credit card receipt regardless of the amount and are to be acquitted in accordance with this policy.

13.3     Union Entertainment

“Union Entertainment expenses” are activities that include entertainment associated with BCOM meetings, meeting with groups of members or stake holder activities. Such expenses incurred by Branch Officers or employees are paid for or reimbursed only if they are directly related to the active conduct of Branch or Union business, or are necessary to accomplish the Branch’s or Union’s business.

Branch or Union business must be transacted or discussed immediately before, during, or immediately after the activity.

Branch or Union Entertainment expenses require an itemised receipt regardless of the amount and are to be acquitted in accordance with this policy.

The amount expended, and the nature of the expenditure, on Branch or Union entertainment must be reasonable, publicly defensible and not open to perceptions of excessiveness.

14. Expense Claims

14.1     All claims for authorised expense reimbursement must be made in writing and be supported by receipts and tax invoices for all such expenditure.

14.2     The Bookkeeper will ensure that such claims have the associated receipts and tax invoices attached and contain sufficient information to establish the exact nature and purpose of the expenditure or claim.

14.3     Expense reimbursement claims made by the Branch Secretary must be approved by the President.

15. Monthly Accounts

The Branch Secretary is to arrange for monthly accounts and reports to be prepared by the Bookkeeper.  These reports are to be reviewed by the Branch Secretary and the Finance Committee.

The monthly accounts and reports to be presented to the Finance Committee must include:

Balance Sheet

Profit & Loss Reports

Debtors Report (Receivables Reconciliation)

Creditors Report

Payments Report (Bank Register)

Bank Reconciliations Report

Monthly Bank Statement

Monthly Credit Card Statements and Reconciliations

16. Donations and Sponsorship

All loans, donations and sponsorships over $1000, must be approved by resolution of the BCOM prior to the expenditure or commitment to the expenditure.

17. Annual Operating Budget

The Finance Committee, in consultation with the Branch Secretary, shall be responsible for developing a budget for the Branch which should be submitted to the BCOM for adoption by June each year.  Once approved, expenditure consistent with the budget constitutes “Normal Operating Expenses” and, unless provided for in the rules or in this policy, the Branch Secretary may expend or approve expenditure in line with the budget allocations.

18. Income Management

18.1     All income, including union dues, will be receipted by Branch Secretary.

18.2     Banking of Income Receipts

All cash and cheques will be deposited into the HSUSA operating bank account on a fortnightly basis.

A deposit summary will be completed and filed, listing the total money deposited for each type of payment, with any supporting paper work attached.  Once deposited, the deposit summary and all supporting paperwork is to be provided to the Bookkeeper.

19. Keeping of Financial Records

19.1     It is the responsibility of the Branch Secretary to ensure that all records regarding financial transactions, including records evidencing authorisation of those transations and including MYOB data files, are retained for 7 years as required by subsection 252(5) of the Act.

19.2     The Branch Secretary will ensure that all records of financial transactions, including records evidencing authorisation of those transations in accordance with the Financial Management Policy and Procedures, be kept and electronically archived and backed up each month.  Following the end of each month, the Branch Secretary must ensure that an electronic copy of the year to date MYOB file is provided to the Branch Auditor.

9.3       The Branch Secretary will ensure that the Branch Auditor is provided with a copy of the completed MYOB data file, other financial records sufficient for the Branch Auditor to be able to compile a General Purpose Financial Report, and other reports, in accordance with the requirements of the Act.  This information must be supplied within four weeks of the end of the financial year.

20. Compliance and Review of this Policy

20.1     A substantial or repeated breach of this policy by a Branch Officer or employee covered by the scope of this policy will be deemed to be a disciplinary offence, in the case of an employee, or misconduct under the rules of the Union, in the case of a Branch Officer.

20.2     By June each year, the Finance Committee will undertake a review of the operation of this Policy and Procedures to ensure that the policy is adequately regulating the financial governance of the Branch and that the policy is being fully complied with and report the findings of the review to the BCOM.

20.3     The Finance Committee and the BCOM will each have a standing ‘Governance Issues’ agenda item for each meeting to provide a regular forum for the discussion of Branch governance issues.

20.4     The Branch Secretary will ensure that all relevant policies and procedures are made available to Branch Officers and employees and that appropriate training (including an induction process) is offered to ensure they understand the Branch’s financial policies and procedures and their own responsibilities.