Welcome and Call to Order

The joint meeting of the Governance Committee and Finance Committee was called to order and a quorum ascertained at 8:11 a.m.

Approval of Agenda

The committee approves the agenda

Financial Policies

Ms. Lee presented the updated financial policies manual, highlighting the changes made to titles and contacts. She also introduced new policies on cash receipts and disbursements, and month-end closing. A discussion ensued about the policy on gift card purchases, with Dr. Bostic and Ms. Arnold expressing concerns about the need for board approval and potential misuse. The committee agreed that any gift card purchases should require board approval, regardless of the amount, and that these should be pre-planned. Dr. Bostic was tasked with wording the policy on gift card purchases. 

Cash Receipts Policy Language Concerns

Ms. Arnold expressed concerns about the language used in the cash receipts policy, suggesting it was too loose and could leave room for interpretation. She emphasized the need for strong language to ensure that the person collecting cash must not be the same person reconciling it. Dr. Bostic agreed, noting that DPAs usual procedure involves two people counting cash. Ms. Lee acknowledged Ms. Arnold's points and agreed to make a note about the importance of having another person available for counting and reconciliation in the Standard Operating Procedures (SOPs). Dr. Bostic also mentioned that DPA had received counterfeit bills in the past, which led to a pause in accepting cash. The team discussed the risks associated with cash handling, including the risk of employees carrying large amounts of cash to the bank. 

Revising Third-Party Payment Policy

The team discussed the risks associated with third-party payments, specifically mentioning Cash App and Venmo. They agreed to revise the policy to exclude these payment methods. They also discussed the cash disbursement policy, with a focus on the need for proper documentation and the potential for manual checks. The team decided to clarify the segregation of duties and the handling of outstanding checks in the policy. They also discussed the need for strong language in the policy to avoid ambiguity. 

Strengthening Policy Language and Financial Oversight

The team discussed the need for stronger language in their policies, specifically considering the use of "must" versus "will". They agreed on the importance of consistency and clarity in their policies to avoid confusion. The team also discussed the need for an independent review of financial transactions to prevent potential issues, such as self-auditing. They decided to add language about third-party vendors and gift card purchases to their cash receipts policy. The team also considered the potential unintended consequences of their policies and sought input from Ms. Lee, who had experience in the financial space. 

Internal Audits and Cash Handling

The team discussed the need for internal audits to ensure policies and procedures are being followed. They agreed on the term 'monitoring' for the review of internal control environments, with a focus on policy effectiveness and efficiency. The team also discussed the risk of handling cash in the school and proposed a designated area for cash counting to reduce risk. The principal's office was suggested as a potential location for this task. The team also discussed the location of the school safe, which is in the vault. 

Designated Cash Transaction Space Discussion

The team discussed the need for a designated space for cash transactions at the school, with security measures in place. They acknowledged the importance of developing procedures alongside the policy, ensuring alignment between the two. The team also recognized the policy as a living document, open to adjustments and course corrections. A contingency plan was discussed in case the treasurer or finance committee chair disagreed with the proposed changes, with the possibility of updating the policy before the final board vote. 

Cashless System Transition Challenges Discussed

Ms. Lee discussed the school's transition to a cashless system, acknowledging that they are not entirely against cash but are currently using a hybrid model due to the challenges of finding the right software platform. She mentioned that they are pushing parents to use the software despite their concerns and are working on improving its ease of use and reporting. Ms. Young and Ms. Rodgers confirmed that the school is still accepting cash, albeit in limited circumstances. The conversation ended with a discussion on the month-end closing policy and suggestions for improving the clarity of financial terms for non-financially savvy individuals. 

Adding "Unaudited" to Financial Reports

Ms. Arnold expressed concern about the accuracy of financial reports, suggesting that they are not audited and therefore may contain errors. She proposed adding the word "unaudited" to the policy to reflect this. Dr. Bostic agreed, suggesting consistency with other policies. Ms. Young raised a question about the use of Bloomberg in the existing policy, which was unclear to the team. Ms. Lee confirmed that she had not seen it in action and had not changed it in the policy. The team agreed to add "unaudited" to the policy and to review the use of Bloomberg in the existing policy. 

Clarifying Procedure vs. Policy

Ms. Arnold clarified the difference between a policy and a procedure, noting that the document in question was a procedure, not a policy. She suggested that the procedure might have been written for a specific situation, such as donations from small businesses, and may no longer be relevant. She recommended that the procedure be reviewed and possibly moved to a policy and procedure manual. Ms. Lee agreed to research the existence of a software mentioned in the procedure and provide an update.

Next steps

• Ms. Lee to revise cash receipts policy to explicitly state prohibition of third-party payment methods (Venmo, Cash App) 

• Ms. Lee to add gift card purchase policy requiring Board approval for all gift card purchases 

• Ms. Lee to update policy language from "should be" to stronger terms like "will be" or "must be" for consistency 

• Ms. Lee to add glossary or write out financial abbreviations (YTD, etc.) in full form 

• Ms. Lee to update policy to specify reports as "unaudited" financial reports 

• Ms. Lee/Dr. Bostic to research if Bloomerang system is still in use and remove from policy if not active 

• Ms. Lee to move procedure-specific content from policy manual to separate SOP document 

• Dr. Bostic to develop detailed procedures for cash handling before implementing cash acceptance 

• Finance team to research secure cash pickup service options and associated costs 

• Ms. Lee to create comprehensive SOPs that align with the financial policies, including specific internal controls for cash handling 

Other Business

No other business discussed.

The Meeting was Adjourned

The meeting adjourned at approximately 9:45 a.m.