Fiscal-manual
KROKA FISCAL MANUAL
GENERAL FINANCIAL STRUCTURE
Kroka’s finances are organized into “Funds”, “Cost Centers”, and “Accounts”.
Our financial assets are kept in bank accounts - mostly held by the Savings Bank of Walpole (SBOW)
FUNDS
Operating Fund
All income and expenses involved in regular ongoing program operations.
Money for the operating fund is kept in three different bank accounts: SBOW Checking, SBOW Payroll, SBOW Savings.
Capital Fund
All income and expenses relating to major capital improvement projects, such as barn building, farmhouse renovations.
Money for the capital fund is kept in SBOW Capital
Endowment Fund
Permanently restricted endowment fund managed by Vermont Community Foundation. see below for notes
COST CENTERS
Our “Cost Centers” within the Operating Fund are managed as “Classes” within Quickbooks, and are specified as follows:
SAP: Summer Adventure Programs
Individually enrolled students come for programs during the summer season, typically 5-day, 7-day or 14-day programs for up to 12 youth, ages 9 through 18 years old..
CON: Contracted Group / School Programs
An organization contracts with Kroka to provide a program for a group of people. (primarily School groups).
SEP: Semester Programs
Individually enrolled students spend a semester learning and traveling with Kroka, with a curriculum that includes rigorous academics as well as adventure expeditions.
WSP = Winter Semester (January - June), FSP = Fall Semester (Sept - December).
CAP: Community Adventure Programs
Local students coming for day or weekend programs, including local school day field trips, homeschool students, weekend adventures, outreach to alumni and the general public.
ORD: Outreach & Development
Sharing the mission and vision of Kroka with the general public. All direct fundraising costs: development staff, appeals, grant proposals, special event costs. All public educational events, community events. Fairs & Marketing events. Open-House events. Postage for appeals. Graphic design and printing for fundraising materials. Some website and advertising. Subclass for the Campstore used for COGS that the campstore purchases for resale.
FARM: Farm
All direct farming costs: haying, mowing, fertilizer, livestock, fencing, forestry, land improvements.
FAC: Facilities
Utilities and maintenance and repair of all buildings and grounds that are used for primarily for administrative or agricultural functions. Costs of owning and maintaining property, buildings, staff residences (as opposed to renting them). Includes cost of mortgage. Subclasses for each building: Farmhouse (FH), FarmBarn (FB), Campus (C), Vinylhaven (VH), Rogers (ROG).
ADMIN : Administration
General costs of being an organization: management, human resources, staff meetings, board of trustees, office services.
Costs that cannot easily or practically be directly allocated into these specific cost centers will be temporarily placed in the “Indirect (IDC)” Quickbooks class. Examples of these indirect costs include: photocopier, telecommunications, insurance, vehicles, bank fees, utilities, taxes, depreciation. See Expense procedures for more information.
TOOLS & SYSTEMS:
We use Quickbooks Online as our primary bookkeeping software.
We use a shared Google Drive folder to store budgets and financial reports.
We use a business.manager@kroka.org email account to communicate with customers and vendors.
We use a hosted CRM called Linseed to invoice customers (program participants) and record their payments, as well as record donations.
We use online banking from the Savings Bank of Walpole to manage our bank accounts, get statements, and transfer money.
We use credit cards for expenses, and login to Chase and Southwest.
We use Stripe to process incoming credit card payments.
INCOME & EXPENSE ACCOUNT DESCRIPTIONS:
* TUITION & FEES Tuition for programs, after scholarships and financial aid * DONATIONS & FUNDRAISING Unrestricted Operating Donations and fundraising revenue * GRANTS Foundations, Grants, Major Gifts. >$10,000 * NET SALES Net External & Internal Sales from Farm & Store (gross sales-Cost of goods=net sales) * OTHER Rental Income, Sale of Assets, and other Miscellaneous reimbursements * EXPENSES: * PEOPLE AND SERVICES: * STAFF BENEFITS Camera Program Reimbursements * PAYROLL – Year Round Employees Kroka Employees: Salaries, Wages, Payroll Taxes, Staff development * BENEFITS– Year Round Employees Health Insurance * PAYROLL – Seasonal Employees Seasonal Staff: Salaries, wages, payroll taxes, bonuses * BONUSES Cash bonuses * APPRENTICES Apprentice Staff: Salaries, wages, payroll taxes * PROFESSIONAL FEES AND SERVICE Non-Employee Compensation: Subcontracted Teachers, Builders, Professionals providing essential services to our organization. Accountants, Lawyers, Graphic Designers, Consultants * SUBCONTRACTED PROGRAM ACTIVITES Subcontracting another organization to deliver programs to our students – ie. Nahual, Koviashuvik, WMA, Landmark lifeguard training. If the contract includes travel equipment rental (such as boats, skis) that equipment rental can go to expedition travel. * DIRECT COSTS: * ADVERTISING Print, web, camp fair advertising * CHARITABLE GIFTS Voluntary Donations to other Organizations * STAFF DEVELOPMENT Conference Registration, Staff Training – onsite or offsite, reimburse personal trainings * Due FROM Employees/students/others: Reimbursements due * DUES AND MEMBERSHIPS Professional Memberships, accreditation, etc * EQUIPMENT EXPENSE Purchase of tools and gear, office equipment. * Purchase of equipment that Kroka will rent to students * EXPEDITION TRAVEL & LODGING NO GASOLINE, but all other program travel and adventure activities with students: plane tickets, train tickets, highway tolls, shuttle services, lift tickets, camping, fishing license, hotel rooms, permits, access fees, entrance fees. Rental of travel equipment (boats, skis, submarines, hot air balloons) that is specific to a single trip * FOOD All Food for human consumption, groceries, berry picking, etc. * GASOLINE All gasoline that we directly purchase for any reason. * POSTAGE All postage, most of the cost is bulk mailings * PRINTING Printing: brochures, appeals, etc. * SUPPLIES Consumable supplies & building materials * TRAVEL & LODGING Staff travel without students - except gasoline, scouting, r&r on way home * INDIRECT COSTS: * BANK FEES Service charges, credit card processing fees * DEPRECIATION Savings to cover depreciation of property and equipment * TAXES Marlow and Alstead property taxes * TELECOMMUNICATIONS Internet and phone bill, plus equipment * INSURANCE Liability, directors, property, life, workers comp * INTEREST EXPENSE Property mortgages, etc. * UTILITIES Electric, Fuel, & Firewood: Farmhouse, Rogers, Gaspe, etc.
* VEHICLES Vehicle & trailer maintenance, and repair, long-term van rentals, Vehicle Registrations (but not insurance)
ROLES AND RESPONSIBILITIES
See job descriptions for:
- Board of Trustees (Jed Williamson Treasurer)
- Executive Director (Misha Golfman -> Nathan Lyczak)
- Bookkeeper (Alex Stroshine)
- Office Manager (Sasha DuVerlie & Linda Fuerderer)
ANNUAL OPERATING BUDGET & FISCAL YEAR
The executive director will work with the business manager to prepare an annual operating budget for each fiscal year (January 1st – December 31st). The budget will be prepared in October and approved in November of each year for the following year. Typically the budget will be revised during the year to reflect ongoing changes. The board approves a threshold for changes that may be made at the discretion of the executive director and leadership council.
FINANCIAL OPERATING PROCEDURES
APPROVAL: All one-time expenses will be documented on paper with a “pink-sheet” “purchase order” form and approved by a director.
BANK DEPOSITS: Bank deposits can be prepared by staff member who receives money on behalf of the organization.. Bank deposits are entered into the Linseed system where checks and cash are credited towards donors or against an invoice. Once a bank deposit is finalized it is printed onto a "blue sheet" and put into Linda Fuerdere's inbox. Linda brings all bank deposits to the Savings Bank of Walpole, and returns them with a deposit slip to the business manager for entry into Quickbooks.
CASH FLOW MANAGEMENT:
- No checks will be written that would cause our “Quickbooks bank balance” to become negative – regardless of what the cleared balance or actual cash bank balance is.
- Operating funds must not go below $2000 per bank balance.
CASH HANDLING: Office manager maintains a locked cash box for petty cash reserves. Any cash receipts (sales) are kept in the locked cash box, or a sealed envelope with a bank deposit.
CHECK SIGNING: Our operating checking account has the following signatories: Ezra Fradkin, Linda Fuerderer, Nathan Lyczak. In general, the person generating a check (printing it from Quickbooks) or using a check (carrying a handwritten check to an off-site vendor) will not be the same person who signs the check.
DOUBLE-ENTRY: The person who receives money and credits it to an invoice (Linseed) will not be the same person who enters it into Quickbooks.
ONLINE ACCOUNTS: We several online financial accounts to manage our finances, and different staff members have different levels of access. Executive Director and Business Manager have full access. Bookkeepers, program managers, and other directors have view-only access on an "as-needed" basis. Login accounts and passwords are kept personally (not shared) and not permitted to be memorized by web-browsers on personal computers.
RECEIPT: Postal mail which is retrieved and opened only by the office manager and any incoming checks are placed in specific mailboxes. (program income, donations income, etc.). Cash and checks from farm store sales are placed in the secure locked farm cash box.
RECONCILIATION: All bank accounts and petty cash accounts are reconciled on a monthly basis. Monthly bank statements for all bank accounts are reconciled against Quickbooks. Bank deposits are reconciled between Linseed and Quickbooks on a monthly basis. Two people will participate in all reconciliations.
TASKS: Here are lists of weekly financial tasks and monthly financial tasks.
ACCOUNTING PRACTICES
ACCRUAL / DEFERRAL : Some expenses are incurred well before the time period in which they apply. For example, we spend money in November 2015 to design and print a 2016 summer program brochure. If they are substantial, these expenses can be deferred with a journal entry as needed.
Kroka often receives program tuition deposits and fees before we provide program services – sometimes even six months or a year in advance. These tuition & fees are entered into Quickbooks on a cash basis as they are received. At the conclusion of each year (December 31st), we make a journal entry to defer unearned revenue from each cost center, and then re-recognize the revenue on January 1st in the proper year to which it applies. These “unearned revenues” should show up on the December 31st balance sheet as a liability.
Kroka sometimes receives program tuition and fees after the program has already been provided. Typically these accounts receivable are managed in Linseed, but not in Quickbooks. If a group or a family owes Kroka tuition from a program that has already been completed, and there is a high likelihood that the tuition will be collected (especially if it is on a FACTS plan), and the collection period crosses a fiscal year, then we will enter the tuition as a “Quickbooks Invoice” / “ACCOUNT RECEIVABLE”, and credit future payments towards this “account receivable”. These accounts receivable should show on the balance sheet as an asset. At the conclusion of the semester program, the accounts of all student should be studied and either closed or set up as receivables.
For Kroka semester programs, we collect tuition & fees, rental charges, group money, pass through donations and more. For the convenience of parents and our staff, we combine all of these charges on a single “statement”, and receive payments credited towards these statements. As these payments come in, we book them in quickbooks towards a single income account: “Individual Tuition & Fees”. After the program begins, we make a single program-specific journal entry that debits tuition & fees and credits the other accounts, such as: camp store sales, equipment rental, and pass-through donations. Information for this journal entry comes from Linseed and camp store sales reports. At the conclusion of the semester program, we revisit this journal entry and correct it to reflect any additional charges that have taken place during the program. Typically we do not track the student escrow account in Quickbooks, as there is too much activity, and it would be redundant with Linseed. Income from camp store sales is booked as “CAMP STORE GROSS SALES” to the ORD Cost Center so that it matches the Cost of Goods Sold (also booked as ORD, CS), regardless of whatever program activity may be generating the sales.
BARTER: Sometimes Kroka will receive goods or services in exchange for program tuition. For bartered goods, a paper document with credible estimate of the value of the donated goods will be used to document the barter. A quickbooks journal entry will reflect the gift as both “TUITION RECEIVED” as well as “EQUIPMENT or SUPPLIES” expense. For bartered services, an invoice from the service provider will reflect the value of the services provided. A quickbooks journal entry will reflect the gift as both “TUITION & FEES INCOME” as well as “PROFESSIONAL SERVICES” expense.
CAMP STORE SALES & OTHER FEES: Camp store sales, gear rentals fees, transportation and overnight fees etc. that are directly attributed to a program participation are typically added to the invoice for that program participation/registration. All income from a program is booked to "PROGRAM INCOME". At the conclusion of the year, a report from Linseed will show us how much of all program income came from tuition, products, fees, rentals, etc. A single Quickbooks journal entry will recategorized this income into the proper income sub-accounts.
Camp store sales and other miscellaneous gear rental fees, transportation that are NOT attributed to a program participation an be handled as follows: in Linseed, create a new invoice under the annual CAMP STORE activity. When receiving payments for these invoices, they can be booked as: ORD - GENERAL CAMP STORE SALES. In Quickbooks, these can be booked to the general camp store sales income account and the ORD class.
The expenses of purchasing goods for camp store sales, rentals, etc. should be booked as ORD - GOODS FOR RESALE
CAPITALIZED EXPENSES / DEPRECIATION: increase the value of the long-term assets of the organization. Examples include: purchasing a truck or a van or building a new building. To “capitalize” an expense means to treat the expenditure as increasing the value of the assets of the organization, rather than increasing the operating expenses of the organization. Any expense of a single item of $2,000 or more that creates (or increases the value of) a long-term asset for the organization (such as a repair or improvement to a building, or a purchase of major long-term equipment) shall be “capitalized”. Any repair or construction expense (including materials and labor) that improves the long-term value of the property shall be “capitalized”. Regular repairs and maintenance of buildings and grounds are not capitalized – they are part of the ongoing operating expenses. Examples of this are: painting the farmhouse, replacing individual plumbing fixtures. Capital improvements are budgeted for with a separate capital improvements budget. Depreciation of these capitalized assets is entered on a quarterly basis based on estimates from Kroka’s depreciation scheduled.
EXPEDITION TRAVEL: Expedition Travel expenses are expenses incurred during an expedition. This includes plane tickets, camping, shuttle, access fees, etc. Travel expenses incurred by staff during an expedition with students will also be posted to the Expedition Travel account. Any travel expenses incurred without students will be posted to travel and lodging. This includes traveling to and from an expedition with out students. No gasoline is included in either account.
FARM SALES Income from farm sale invoices is always booked as “FARM GROSS SALES” to the FARM cost center, regardless of whatever program activity may be generating the sales.
GIFTS-IN-KIND: Substantial donated gifts-in-kind of goods or services will be entered into Linseed and the donor will be thanked by our development director. These gifts-in-kind will be entered into Quickbooks if: - the value of the gift exceeds $1,000 - the donor is a career professional in the area that they are providing services - the goods donated would otherwise have been purchased by Kroka
FOOD PURCHASES: are expensed to the best of our ability by the cost center of the programs most active at the time the food is purchased. This of course is not 100% accurate as food inventories are maintained and used by many different programs at once.
INTEREST INCOME:
Interest income is booked into the ADMIN cost center/class.
INDIRECT COST ALLOCATIONS: Indirect costs such as insurance, vehicles, utilities etc, may be temporarily placed into the IDC cost center. These incomes and expenses will be allocated to the specific cost centers on an annual basis via Quickbooks journal entries, based on the following criteria:
- VEHICLES will be allocated to cost centers based on the distribution of income.
- LIABILITY INSURANCE: will be allocated to cost centers based on the distribution of income
- AUTO INSURANCE: will be allocated to cost centers based on the distribution of income
- BANK FEES: will be allocated to cost centers based on the distribution of income
- TELECOMMUNICATIONS: will be allocated to cost centers based on the distribution of income
- HEALTH INSURANCE and WORKERS COMPENSATION: will be allocated to all cost centers based on the distribution of PAYROLL ALLOCATIONS
- UTILITIES, MORTGAGE INTEREST, and PROPERTY TAXES: will be allocated to FACILITIES
PAYROLL: Each payroll posting will be allocated to the cost centers at the time of entry.
STOCK GIFTS: are received into the Edward Jones account and booked as donations based on the value at the moment of the gift. Kroka’s policy is to immediately sell the stock, and apply the funds to the operating, property, capital or scholarship fund, based on the intentions of the donor.
ENDOWMENT FUND
Fundraising for an endowment fund began in 2019 during Phase II of the Capital Campaign. Funds were initially held in a bank account at Mascoma Savings Bank. On December 28, 2020 we wrote a check to the Vermont Community Foundation for $117,165.27 to officially establish the fund. To administer the endowment fund, log in to: DonorCentral
How we receive gifts for the fund: all deposits to the endowment fund should come from the Kroka itself, so the Kroka should direct donors to give to Kroka and not attempt to give directly to the nonprofit fund at the VCF.
