4-70 INTERNAL FINANCIAL STATEMENTS

POLICY

Internal financial statements will be prepared monthly for each department after all bank accounts and key balance sheet accounts have been reconciled and all monthly adjusting entries have been entered. A breakdown by program is prepared for departments with multiple programs.

PROCEDURE

After all posting to the general ledger is complete, the trial balance verified and account analyses are complete, the Accounting Manager will print and review the financial statements.  The internal financial statements will be prepared on a cash basis as opposed to an accrual basis.  Internal financial statements will include capital assets, mortgage principal and reserve payments as expenses.  At year end, adjusting entries will be processed to capitalize assets (see capital asset policy), record depreciation, deferred revenue and amortization of deferred revenue in accordance with Generally Accepted Accounting Principles.  A reconciliation between the internal financial statement and audited financial statement will be prepared.

Variances above or below budget on monthly internal financial statements will be checked and an explanation attached to the statement package.  The monthly statements and supporting documentation will be forwarded to the Director of Finance.  The Director of Finance will prepare a summary analysis by department for management and for reporting monthly (see note) to the Resources Committee of the Board of Directors.  (Note:  At year end, March internal financial statements will be reviewed in conjunction with the audited financial statements in May.  April, May financial statements will be presented in June.  June, July financial statements will be presented in August.)  

Financial statements have 6 columns:

Service Directors will be emailed the financial statements for their departments from the Finance Manager the day following a Resources Meeting. Detailed general ledger transactions files for expense accounts will be emailed to assist them in meeting their budgets for these expenses.

Monthly, quarterly and/or yearly financial reports as detailed by the Agency contracts will be prepared and forwarded to the appropriate government departments as required.

Reports will be filed, as required, by government regulations for GST/HST, payroll remittances, EHT, T4’s, WSIB, Charity Returns and Nevada.

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