DTE FCM Expenditure Policy
Policy and procedures controlling the expenditure of DTE funds
Purpose
To regulate and control all expenditure of DTE funds.
Scope
All expenditures for DTE (except expenses of directors which are regulated by the Board of Directors Expenses Policy).
Cash in Hand Transactions
Volunteers are not to engage in “cash in hand” transactions (see definition below) as this amounts to tax evasion. DTE can claim back the GST paid on legitimate tax invoices and hence such transactions may not save DTE any money. Volunteers must understand that if they engage in cash in hand transactions they may forfeit any future funding.
Link with other Policy documents
This Policy links with the Application for Funding, which includes budget application forms
Definitions
AC Approving Committee. The committee approved a budget. This is either the Organising Committee or the ConFest Committee.
Appropriation Funds allocated by members at an annual general meeting or a special general meeting.
Budget An estimation of expenditure approved by an AC for the conduct of a specific activity, purpose, project or purchase over a period of time.
Capital asset Capital items are significant pieces of property such as plant, machinery, vehicles, equipment, containers, and computers etc. A capital item is a type of asset which has a useful life longer than a year.
Cash in Hand Payment made directly in cash without obtaining a tax invoice. Perhaps in exchange for a cheaper service/deal. Smaller cash payments (under $100) themselves are acceptable provided there is a verifiably written receipt for each purchase. As with all receipts, there needs to be a record of the seller’s name and address and a contact detail (phone or email), the date of the transaction, and an itemised description of the goods paid for and the amount paid (in cash). If subsequently the vendor cannot be contacted and the details of the sale verified then there are good grounds not to reimburse the volunteer.
Debit Card A card issued by a bank allowing the holder to transfer money electronically from DTE’s bank account when making a purchase. The principal method by which DTE funds are provided to volunteers.
FC FinCom The committee which keeps track of expenditure from each appropriation and each budget within each appropriation.
Operating Expenses Costs as listed under Operating Expenses in the annual DTE Profit and Loss Statement.
Substantiation A not necessarily documented corroboration and verification that a transaction has taken place and goods and/or services have been received.
Volunteer A person who works for DTE without being paid.
- Documents referred to this Policy
Invoice
A formal document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer.
Receipt
A formal verifiable written or printed document acknowledging that money or property has been received.
Tax invoice
Similar to an invoice but contains the amount of GST being charged and the ABN of the supplier. A tax invoice that signifies that the amount of the tax invoice has been paid. It contains specific details of the purchases made, GST paid, payment method and amount, date and other information that is required for effective recording and checking.
For a further understanding of a tax invoice please refer to:
https://www.ato.gov.au/Business/GST/Issuing-tax-invoices/
Difference between an invoice and a receipt
The significant difference however between the two is that the invoice is issued prior to the payment while the receipt is issued after the payment. An invoice is used to track the sale of goods or services. However, a receipt acts as documentation for the buyer that the amount has been paid.
Procedures for obtaining budget approval and accounting for the expenditure
In brief
- Become familiar with this Expenditure Policy.
- Complete the budget application forms available with Application for Funding on: http://confest.org.au/downloads/all
- Submit the completed application form for approval. Note: Anyone who still owes more than $500 to DTE will not be provided with advance funding in any way. These debtors may be considered for a budget approval only on the basis of tax invoice reimbursement only.
- After budget approval gained apply funds within the limits of the budget.
Submit receipted tax invoices (or an acceptable scan, photograph or copy thereof), along with a detailed summary sheet to the Finance Committee. Retain copies or originals of tax invoices.
In detail
a) Prior to any spending, a volunteer must submit a Budget Application to an Approving Committee (AC) which sets out:
i) the purpose of the proposed expenditure,
ii) applicants details,
iii) applicants agreement to be personally responsible for any funds advanced,
iv) a detailed description of the intended uses of any funds advanced, and
v) timetable in which funds would be needed.
b) The forms with Application for a Budget are to be used in applying for a budget.
c) Budget overruns will only be approved in exceptional circumstances. No further funding will be provided while receipt tax invoices or funds are outstanding.
d) If approved by the relevant AC a debit card will be issued to the applicant. See below for conditions governing the use of a DTE funded debit card.
e) Funds will be transferred to the applicant’s debit card in the time frame agreed.
f) When spending funds a receipt tax invoice must be obtained for each transaction. The only exception is when no GST is charged by a supplier, in which case a formal receipt with other substantiation is required. Statements, written or oral, of what could have been paid, or it was cheaper if proof of purchase was not provided, or other such will not be accepted.
g) Expenditure must be within the limits of the approved budget for that project/purpose.
h) Money from one budget cannot be used to cover spending in another budget area.
i) Expenditure must be in accordance with this Policy, reasonable and necessary, and conform to all requirements by DTE Rules, the ATO and other regulatory agencies as applicable.
j) Submit paid tax invoices or an acceptable scan or copy - after keeping originals or copies - together with a detailing summary to support/evidence transactions/claim to the FC.
k) Keep a copy before handing over receipt tax invoices.
l) Tax invoices to be submitted within the following timetables:
i) non-ConFest projects and activities: submitted within14 days of the completion of the purpose of the budget has been attained, or
ii) ConFest specific projects:
Prior to ConFest to the FC as above, or
at ConFest to authorised person. For those who cannot fully complete the submission at ConFest, you must do so within two weeks of the festival finishing. Firm arrangement/appointment for this is to be made with an authorised person before leaving the festival.
m) There will be facilities available at ConFest to receive tax invoices and supply copies of them and accept the return of debit cards. Operating times and place of this depot will be made available on site.
n) Where tax invoices are not provided for transactions the amount/s involved will be regarded as owed to DTE by the volunteer and recovery action will be taken.
o) All charges/purchases must be individually substantiated and details supplied.
p) Expenditures will be checked by the FC for compliance with the budgetary approval.
q) Authorised person/s knowledgeable about DTE requirements will review all tax invoices to verify the propriety of the transactions. The reviewer/s will be thorough, detailed, and have a questioning mindset. For example; What was the purpose? Is it valid and directly related to the service as a volunteer for DTE? Does it include personal expenses? Reviewers will enforce ethical policies regarding spending, receipts and coding of expenditures. The reviews will be overseen by the relevant AC.
r) In measuring the reasonableness of expenditures, the AC or reviewer may consult the provider of the service or item. All expenditures will be subject to the review process to establish it’s legitimacy.
s) Nobody to be the reviewer of their own charges or enter their documentation into DTE’s books.
t) The relevant AC will decide whether or not to accept an expenditure.
u) If dissatisfied with a decision by an AC a volunteer can, after providing further information, request a reconsideration by the AC
Debit Cards
a) Whenever possible volunteers are to obtain and use a DTE debit card for payments in relation to their undertakings for DTE and the application of their budget.
b) Debit cards are not to be used to pay DTE operating expenses over $100, regular direct charges or purchase of capital assets. These are to be tabled at a relevant meeting for perusal and approval.
c) Should a cash expenditure be necessary volunteers may use their own funds and apply for reimbursement by supplying tax invoices and written explanations. Only in exceptional circumstances may they make a cash withdrawal from their debit card. Cash withdrawals from debit cards are strongly discouraged. Tax invoices for such expenditure (like all spending on DTE’s behalf) must be supplied. ATM or EFTPOS receipts are not tax invoices. Nor are estimates of what could have been paid.
d) Only DTE related business transactions are to be charged to the card. A DTE debit card must not be used for personal transactions. Charging or buying personal items from these cards constitutes abuse and is not acceptable under any circumstances.
e) Debit cards are not permitted to be given or loaned to another person under any circumstances.
Criteria for approval/reimbursement of expenditure
Only reasonable and necessary expenditure actually transacted and travel incurred by volunteers in the application of their budget will be approved. Volunteers are expected to exercise discretion and good business judgement, be cost conscious and spend DTE funds judiciously. Expenditure that could be perceived as lavish or excessive is not acceptable.
a) Capital Items. Volunteers must have had specific approval for the acquisition of any capital items.
b) Travel. All travel expenditure must have prior budget approval.
i) Cost of travel of volunteers to and from ConFest is a private expense. The only exception is the extra cost of hauling festival items to ConFest. Volunteers can seek reimbursement for pre- ConFest work visits to the site, but not for attending ConFest,
ii) Travel expenses claimed must be related to the approved budget/project. This expense like all others, must have been included in the budget application and the expense must be within the limits of the budget allocation for the project/purpose, and
iii)The following must be provided for a travel claim; date of travel, method, purpose and starting/ending points.
c) Private Motor Vehicles. DTE may pay fuel costs only for the use of private motor vehicles in attending to DTE related work. Fuel for other use must have prior approval of the Board. No fuel costs will be approved for attending meetings or ConFest. No other costs approved including repairs, maintenance, insurance, fines, damage etc.
Expenses which are not approvable.
The following expenses are not considered to be reasonable or necessary. These expenses are not eligible for acceptance unless the AC makes and enters into the minutes an affirmative determination that such an expense is reasonable and necessary, including a description of the circumstances and justification for that determination.
a) Alcohol,
b) Food whilst travelling,
c) Food unless it’s available for general consumption during ConFest,
d) Any transport expenses for attending ConFest,
e) Services by DTE members/people involved in a project/village, including hire arrangements,
f) Cigarettes, tobacco, drugs, confectionary,
g) Private expenses of any kind,
h) Loss/theft of cash, personal funds or property,
I) Lost baggage or excess baggage charge for personal items,
j) "No-show" charges or penalties for flights, hotel and car service if incurred due to non-business related changes in schedules,
k) Parking or traffic fines,
l) Personal automobile repairs or service,
m) Personal travel portion of a business trip,
n) Expenses of any person other than the volunteer claiming,
o) Expenses which can be claimed by a volunteer as a tax deduction,
p) Expenses normally recoverable from a third party,
q) Claims for purchases that are required to be made under a DTE purchase order, or
r) Expenses that are not incurred for DTE business purposes.
s) Medical, hospital or auxiliary health expenses.
The above list is not exhaustive and merely gives examples of expenses that will not be reimbursed or accepted. As a volunteer, you are expected to behave honestly, responsibly and within the guidelines of this policy (e.g., keep costs low).
Procedure Responsibilities
a) The Board implements this Policy.
b) The Board of Directors enforces this Policy.
c) Superseding Effect. This Policy supersedes all previous policies and memoranda concerning the subject matter. Only the full Board may authorise exceptions to this policy.
Acknowledgement
This Policy has been based on the work of the many volunteers who have contributed to this area in the past and their work is acknowledged. How we have thought and worked in the past can play a powerful role in shaping the present.