Financial Policies

FOR Trail Dames Foundation

Purpose. The Trail Dames Foundation is a nonprofit organization committed to protecting and using our assets for our nonprofit mission. Proper financial practices are very important in doing this, since proper practices help to prevent and detect errors and fraud. Good financial practices also assure our donors that we use their gifts for the purposes for which they were intended.


Review of Risks. These policies were drafted after consideration of the risks associated with the various aspects of our financial operations to enact policies and procedures designed to minimize those risks. The Board of Directors (hereinafter known as the Board) will review these policies each year to consider whether the risks have changed. Such changes may include receipt of grant monies for the first time or receipt of grants with restrictions, a change in the laws regulating our nonprofit, hiring of employees or a major change in our programs. If so, the Board needs to identify any new risks and adopt appropriate procedures to minimize those risks. The Board shall consult with a professional if necessary to ensure that it is properly addressing the risks.
Segregation of Roles. There are several fiscal “roles” in our organization—custody, authorization, execution, and monitoring. For example, the person who has authority to sign checks is acting in the custodial role. The person who approves payment of a bill is authorizing. The Board as a whole acts in an authorizing role when it approves the annual budget of makes a decision to purchase a major item like a copier. The person who prepares the checks for signature by an authorized check signer is acting in the execution role, executing an action that has been authorized by the Board through the annual budget or by the individual responsible for approving payment of the bill. The person who reconciles the bank statement acts in the monitoring role. The Board also acts in a monitoring role when it reviews the monthly financial reports to be sure that its plan—the budget—is being executed properly.
As much as possible, the Board seeks to separate the responsibilities for fiscal roles so that at least 2 (two) and preferably more individuals fulfill these roles. It is particularly important that the same person does not authorize, execute and monitor any transaction. At each step of handling funds, Trail Dames Foundation shall ensure that more than one person verifies that the step is done correctly.



Our organization faces the risk that funds that we receive may be stolen or lost or that someone maybe falsely accused of stealing funds. We also face the risk that we may fail to record a restriction that a donor has placed on our use of funds.


All funds, whether cash or check, which Trail Dames Foundation receives will be deposited intact into the bank account, with no monies removed to make payments or for other purposes. All cash receipts should be deposited into the bank as soon as possible. This allows for a complete accounting and independent verification of what happens to our funds. Communications from donors that establish restrictions on the use of their contributions will be saved. If we believe that a donor has restricted the use of funds in a conversation, we will follow up and get written confirmation of the donor’s intent.


1. Receipt of Checks in the Office. The Secretary opens all mail addressed to Trail Dames Foundation. The Secretary makes a photocopy of all checks received and provides the photocopies to the Treasurer. This allows the Treasurer to verify that all checks received are deposited.
The Secretary will endorse all checks by an endorsement stamp that provides that the check is “For Deposit Only” and will be paid to the order of the corporate bank and lists Trail Dames Foundation’s name and account number. This lessens the risk that a check may be stolen and cashed.
2. Receipt of Cash in the Office. Cash is easily stolen and must be handled carefully. If cash comes into the office, the person accepting the cash must provide a written receipt when taking the cash:

3. The Secretary or the Secretary’s designee shall train all office volunteers in these procedures. The Treasurer will compare the receipt book and the bank’s list of cash deposits when making the Bank Reconciliation described below. Deposit Slips. The Secretary will deposit corporate funds as follows:

4. Bank Deposit. If no cash is present, the deposit may be mailed to the bank. If cash is present, a second person (if available) shall verify deposited funds prior to the Secretary sealing the envelope and making the deposit in person. The person verifying the cash shall initial the cash on the copy of the deposit slip retained by Trail Dames Foundation.
5. Receipt of Checks and Cash outside the Office. If checks and/or cash come in outside the office (such as at a fundraising event), we need to take special precautions to protect these receipts from theft and to ensure that no one is falsely accused of stealing funds.

6. Credit Card Contributions. We do not accept contributions by credit card. If we decide to do that, we need to get accounting advice to make sure we have the proper controls in place.
7. Acknowledging Donations. While IRS rules require that we acknowledge all donations that are more than $75, our policy is to provide written acknowledgement for every gift we receive. The Secretary shall respond to each donation with a letter thanking the donor for their generosity:
8. Posting Donor Names on Website. The Secretary shall post the names of all donors (except those requesting anonymity) on our website. The website will indicate that we hope to acknowledge every donor. It will invite donors who are not listed to contact the Treasurer. In addition to publicly thanking all our donors, a donor whose check or cash was misreported, lost or stolen may alert us to the problem.



We face the risks that that our funds will be spent on unauthorized items, that someone will steal our funds by taking blank checks or by writing checks to payees who are not our vendors, that someone will use corporate property for personal purposes or that payments we make will be improperly recorded.


Make all disbursements from Trail Dames Foundation’s funds by check, with the exception of petty cash. This allows us to track how our funds are spent, who is spending them and who is authorizing expenditures.


1. Opening Bank Accounts. Bank accounts may be opened only upon authorization by the Board of Directors.

2. Custody of Checks. The Secretary is the only person authorized to have access to unused check stock. The checks should be stored in a locked location and information about how to access them should be kept confidential from everyone but the President.
3. Check Authorization. All invoices will be forwarded immediately to the Treasurer for review and authorization to pay.

4. Expenses Not Invoiced. In some cases, expenses may not be invoiced, such as rent. When such expenses are due, the Treasurer needs to ensure that the expense is in the budget and write a note authorizing payment of the expense and the amount of the expense and supply it to the Secretary.
5. Payment by Checks. Upon approval of the invoice and note by the Treasurer, the Secretary is authorized to prepare all checks and should do so.

6. Duties of Check Signers. All checks will be signed by the signers designated by the Board of Directors. Prior to signing a check, a check signer will do the following:

7. Prohibited Practices. In no event will:

Each check signer will be made aware that signing blank checks exposes our organization to theft since the bank is entitled to charge our account for any check that has a valid signature. A signed blank check is an invitation to theft.

8. On-line Payments. If we make online payments, we will make arrangements with the bank that allow the Treasurer to have online, read-only access to the account. We will also arrange with the bank to be sure that only the individuals the board has authorized as check signers will be permitted to authorize the payment of bills electronically. In addition to the monthly reconciliation, the Treasurer will periodically spot-check the account to compare the bank automatic payments with the vendor statements.


Payments by cash are not as completely documented and are not as easily monitored as payments by check and thus subject Trail Dames Foundation to greater likelihood of errors and fraud.


The Petty Cash Fund should only be used when payment by check is impracticable.


Administration of Petty Cash Fund. The Secretary is responsible for the administration of the Petty Cash Fund. The Fund shall be funded with checks made out to “Petty Cash—name of Secretary” and initially recorded in the Petty Cash Fund account. The Secretary will require receipts for all purchases and may ask those reimbursed to sign for money the Secretary provides as reimbursement.
The Secretary will record all cash purchases in a journal and save the receipts. When the fund gets low, the Secretary will apply to the Treasurer for authorization to reimburse the fund for the total amount expended. The check written to reimburse the Petty Cash Fund will be recorded in the appropriate expense accounts for the items that were purchased with Petty Cash, so that these expenditures made through the Petty Cash fund are properly classified by type – for example, postage, parking fees, etc.


Trail Dames Foundation does not have the same level of control over expenses incurred on behalf of Trail Dames Foundation by those who pay with personal funds and seek reimbursement as it does for expenses paid directly by the corporation. The corporation is not in as good a position to determine whether the good or service purchased might have been obtained at a lower price elsewhere, whether there is a personal benefit to the person seeking reimbursement and how the expenditure fits in with the rest of Trail Dames Foundation’s budget.


In proper circumstances, Board members, employees and volunteers are entitled to be reimbursed for expenses related to Trail Dames Foundation that they incurred on behalf of Trail Dames Foundation. To receive reimbursement, you must meet the following requirements:


To be reimbursed for expenses:


The corporation wants to ensure that all purchases on behalf of the corporation are authorized by the Board or by Board policies. Unauthorized purchases deplete Trail Dames Foundation’s resources and interfere with the Board’s ability to govern properly.


All purchases made on behalf of Trail Dames Foundation must be made pursuant to the Board-approved budget or Board rules.


The Treasurer can authorize purchases of $_________ or less which conform to the Board’s budget. The Board must approve purchases above that amount. The Board must authorize any purchase which does not conform to the Board’s budget.


The corporation faces a risk that individuals will use corporate property without authorization for personal purposes. Usage reduces the life of property and eventually is an expense that the corporation assumes. It also betrays the trust of our donors who expect that the corporation will use its resources only for purposes that help us achieve our mission.


Property and equipment owned by the corporation may only be used for corporate activities or activities approved by the corporation. They may not be used for personal purposes.


If a Board member, officer, employee or volunteer wants to use corporate property or equipment for any purpose other than a corporate purpose, that individual must obtain permission from the Board.



The corporation needs to ensure that any obligation undertaken in the corporate name is authorized by the corporation and is for a corporate and not a personal purpose.



Corporate credit or debit cards can be misused when people charge personal expenses on them, fail to obtain documentation showing that a purchase was for the corporation or put expenses on the corporate card for purchases that are embarrassing to the corporation.


The corporation will not authorize the use of debit cards for any purposes. The Board will determine whether there is a compelling need for the corporation to obtain one or more credit cards. If the Board determines that credit cards are needed, the Board will authorize specific individuals to utilize a corporate credit card. A corporate cardholder may use the credit card only for official purposes directly related to the needs of Trail Dames Foundation. The cardholder may not use a corporate credit card for personal purposes, even if he or she plans to reimburse Trail Dames Foundation.

The following purchases are not allowed on the corporate credit card:

An individual purchase shall not exceed $____________. Aggregate monthly purchases shall not exceed $___________.


In order to use the card, the cardholder must follow these procedures:


Trail Dames Foundation needs to ensure that borrowing in the corporate name is authorized.


The Board must approve application for and acceptance of any Lines of Credit. Once the Line of Credit is authorized by the Board, the Treasurer can authorize borrowing within the limit of the line of credit up to $_______. The Board must approve all borrowing against the line of credit greater than that amount. The full Board must approve any other borrowing of funds in the name of the corporation, including the use of any promissory notes. The Board must give very serious attention to be sure that the corporation will have sufficient funds available to repay any loans or lines of credit on time.



Even the most honest and attentive individual makes mistakes. Monitoring allows us to uncover errors. If our records and the bank records do not agree, it is likely that our records are wrong. Monitoring also assists us in identifying discrepancies between our accounting records and our banking records that suggest theft or fraud, checks signed by unauthorized signers, and identity theft.


The Treasurer will monitor the corporation’s accounts regularly and will prepare a written reconciliation of all bank or investment accounts which proves that the balances presented on our financial reports agree with the records of the financial institution.