The procurement of goods, services and assets will be conducted with sufficient due diligence to demonstrate transparency, fairness, quality, and value for money in meeting TFNs requirements During the annual budgeting process, Council will approve the expenditure authority limit of the Executive Director and set the limits that he/she may approve for Program Managers and Supervisors.

All purchases must be within spending authority limits and with verification that:

• The necessary funds are in the program budget and are a line item;
• The expenditures are required for a community program, or for administration and in accordance with established policies and procedures
• The service of goods to be purchased are required for a TFN service and in accordance with existing funding/contractual agreements signed with funding agencies
• Appropriate tax exemptions are applied

The deliberate splitting of purchasing forms or invoices which have the sole purpose or effect of avoiding expenditure authority limits is expressly prohibited.

Expenditure Requests

All expenditure requests must be approved by an authorized signor within authority limits assigned and include an expense account code to ensure that funds are available within the line item budget. All expenditures will have the appropriate tax exemptions applied (see tax exemption notes at the end of this section).

The purchase of goods or services must be submitted in writing on one of the following purchasing forms with the exception of normal recurring accounts such as hydro, telephone and salary:

• Purchase Order to be used when requesting the purchase of goods or services for which TFN will be invoiced or paid with a TFN Visa business card
• Cheque Requisitions to be used in the event an invoice will not be generated such as for shopping advances to purchase goods where TFN does not hold an account, payroll advances, fees for services, and initial petty cash funds.
• Shopping Advance Reconciliation to reconcile a shopping advance
• Requests for reimbursement - for payment of small miscellaneous amounts paid personally on behalf of TFN

All receipts should only contain items purchased for TFN.

Purchase Orders Sample attached in Schedule 12A

Blank, pre-numbered purchase order forms shall be issued and controlled by the Finance Manager and are to be safely guarded in a locked cabinet.

The purchase order is to be completed with the name of the supplier, description of the item, unit price and total cost, the ACCPAC account code to be charged and whether the purchase will be made with a visa card or invoiced and paid by cheque.

Purchase orders are to be prepared in triplicate with the distribution as follows:

• Original is to be forwarded to the supplier, and stamped with the official TFN stamp
• The yellow copy is forwarded to the finance department as soon as the purchase is made along with any invoices or receipts
• The pink copy is to remain in the purchase order book and retained

All purchase orders prepared in error must be marked VOID.

All used purchase order books shall be returned to the Finance department at the end of each fiscal year.

Cheque Requisitions Sample attached in Schedule 12B

Cheque requisition forms will be from duplicate pre-numbered cheque requisition books or custom forms for recurring payments. The original is forwarded to the finance department for cheque preparation and the second copy is to remain in the requisition book.

Shopping Advance Procedures

• Complete requisition form including description of what the shopping advance is for
• An authorized signor approves and signs the requisition and forwards to finance department for cheque preparation
• The AP clerk issues a cheque from balance account 0124
• The shopping advance is the responsibility of the employee receiving the advance and must be reconciled within 7 business days of receiving the advance by completing a shopping advance reconciliation form by entering each receipt, taxes paid and the proper account codes to be charged.
• If the advance matches the receipts, a general journal entry is done to clear balance account 0124 and enter expenses to the correct expense accounts
• When funds are returned, a receipt is issued. Correct distribution of expenses and taxes are done through accounts receivable. The entire amount of the cheque is received into 0124-010 and the expenses and taxes are coded with negative numbers so that it will debit the correct accounts.
• If the receipts exceed the advance, another cheque will be issued through accounts payable with the advanced amount coded to 0124 as a negative amount and expenses and taxes coded to the correct accounts.

Gift Cards

The purchase of gift cards are considered a shopping advance and must be reconciled with a listing of what the gift cards were used for along with the recipient names.

Requests for reimbursement for payment of small miscellaneous amounts paid personally on behalf of TFN

• Complete request for reimbursement form including details of the items purchased, taxes paid, amount to be reimbursed and the relevant expense account codes
• Attach all relevant receipts
• Have an authorized signor approve the request
• Forward documentation to the finance department for cheque preparation

Visa Cards

Visa Cards will be managed by the Finance Manager and may be provided to Managers, Chief and staff for work related expenses upon signing an agreement regarding use of the card as follows:

• There are to be absolutely no personal credit charges for any reason.
• All travelling expenses normally done through a travel expense claim form must continue to be done this way with the exception of group meals, business meetings, accommodations and hotel parking. (when using the card for accommodations, ensure that there are no extra charges ie. movies, room service included)
• Card Statements received by the 18th of each month must be forwarded to the TFN accounting department within 5 business days along with properly coded and approved documentation such as purchase orders and receipts.
• Any misuse of this card will be disciplined appropriately.

Petty Cash

Petty cash funds are provided to a maximum of $300 and must be approved by the Finance Manager. Petty cash must be locked and only accessible by the person who has been issued and thus responsible for the petty cash. Petty cash accounts may be audited at any time.

Procedures for Initial Petty Cash Fund.

• Complete a cheque requisition form and forward to the Finance Manager for approval
• Once approved, the Finance Manager will code the requisition to balance sheet account 0113-010 and forward to the accounts payable clerk for cheque preparation.

Procedures to replenish Petty Cash

• A petty cash reconciliation form (attached) and all receipts and vouchers are submitted to the Finance Manager for verification and approval.
• No amounts will be reimbursed unless documentation is attached or adequate explanation provided
• Once approved, documentation is forwarded to the accounts payable clerk for cheque preparation with each receipt/voucher detail entered to the correct account code.

Year End Petty Cash Reconciliation

To ensure that all expenses are recorded in the correct fiscal year, all petty cash funds must be reconciled at the end of the fiscal year.

• Petty cash reconciliation form is completed and given to the Finance Manager along with any remaining funds
• Reconciliation form and remaining funds are verified by the Finance Manager
• Accounts payable clerk issues the cheque, ensuring invoices are dated to the correct fiscal year

Invoice Processing

There will be a segregation of duties in that the person entering invoices and printing cheques does not have signing authority.

No cheque shall be issued in settlement of any account unless goods or services have been received, as evidenced by appropriate supporting documentation such as packing slip, purchase order, invoice, etc.

The Accounts Payable Clerk holds shipping dockets, packing slips and purchase order forms in a folder pending receipt of invoices or statements

• Upon receipt of invoices, the finance clerk matches the invoice with supporting documents and enters the invoice into ACCPAC and stamps paid.
• Once approved, the accounts payable clerk generates the cheques
• Unsigned cheques are presented to authorized check signers for their signatures along with the documentation used to generate the cheques
• Any cheques over $5,000 will be tagged with a sticky note to ensure that one of the signatures are that of Chief or a Councillor with cheque signing authority

Invoices are not to be paid by statements however supplier statements will be reconciled to the aged accounts payable list by verifying that the total amount owing on the supplier statement agrees to the amount recorded on the aged payable list and investigate any differences to determine if any additional payables need to be set up or if the supplier needs to be notified that their records are inaccurate.

The Accounts Payable Clerk will notify the Finance Manager about any non-compliance with purchasing and payments or suspicions of fraud.

Monitoring of Contractors / Suppliers

Contracts will be reviewed on an annual basis or more often if necessary to determine if a request for a new contractor/supplier is to be initiated. Performance evaluation will be tailored to job size and complexity. A review of quality will be based on criteria established at time of award. Any adjustments to the criteria will be made in conjunction with the contractor/supplier.

Tax Exemption Considerations

Tax exemption certificate will be provided to all vendors/suppliers at the time of purchase to ensure all tax exemptions at source will be applied.

Goods and services delivered to the Reserve by vendors/suppliers are HST exempt.

Good and services purchased from vendors off reserve and brought to Bear Island by TFN are PST exempt. 50% of the GST will be recovered.

Q : Explain in your own word how the organization set up the control for purchasing budget (10 marks).