Party Expenses

All Party Expenses must be paid from the Party's chequing account. This account is with TD Canada Trust. The home branch for the account is at Jane Street and Bloor Street West in Toronto.

In order to reduce the risk of malfeasance(?), every cheque must be signed by two people, preferably members of the Executive Committee. Since about 2010 the Leader, Recording Secretary and Treasurer have had signing authority. Three people were given signing authority in case one is unavailable. As a matter of practice, the "Payee" does not sign the cheque. In order to change who has signing authority, all three new signatories must attend at the home branch together to sign the required documents. At the Convention on November 4, 2017 the Recording Secretary and Treasurer have been replaced.

Because of the requirement for two signatures, the ATM card cannot be used to withdraw cash from the Party's account. It is only used to deposit cash and cheques. This also limits our ability to obtain a credit card from TD Canada Trust.

There are two procedures currently in use for obtaining two signatures on cheques;

1. The Treasurer (or other person with signing authority) prepares the cheque(s) and takes it/them to a meeting, such as Pub Night, where one or both of the other individuals with signing authority will be present to sign them.
2. If such a meeting is not happening soon, the Treasurer prepares the cheques and mails them to one of the other authorized signers, who signs them and forwards them to the Payees. (The Treasurer usually includes stamped envelopes addressed to the Payees.)

Some expenses may be "pre-authorized" by the Party to be taken directly from the Party's account by the Payee. The Executive Committee must approve such an arrangement. Currently the only pre-authorized payment (PAP) is the monthly cell phone charge.

The Treasurer must have an invoice or expenses statement before preparing a cheque. For example, Paragon dpi sends the Treasurer an invoice after printing our quarterly newsletter and return envelopes (and delivering them). So to for our insurance company and the company that provides our mail box. However, many of the expenses must be paid in cash or by credit card;

• PayPal Pro (the service that allows donors to pay by credit card instead of PayPal) will only accept payment by credit card.
• Facebook advertising also will not accept a cheque from the Party.
• Stamps and courier services
• Office supplies such as paper and ink cartridges

Typically the person responsible for conducting party business, such as publishing Bulletin, 'Boosting' Facebook posts, preparing and mailing New Member Kits, mailing Nomination Packages to Candidates or Official Receipts to donors must pay for the materials and (later) be reimbursed by the Party. The individual incurring such expenses must provide the receipts or invoices to the Treasurer. These may be original documents or scanned. They may be listed on a covering email or on an Expense Statement. Expenses must have been approved by the Executive. Many are covered under the Operating Budget (Bulletin, postage, Insurance, Telephone, Internet, etc.) or approved spending motions (e.g.election campaigns, fundraising campaigns).

This method works provided the individual incurring the expenses (on behalf of the Party) has a credit card with a sufficient credit limit, or adequate funds in their bank account. Otherwise the delay before being reimbursed is unacceptable and would prevent them from taking on the responsibility. This can be overcome by the ...

Petty Cash Procedure

Any member of the Party tasked with completing an item with an approved budget may request a "Petty Cash" advance. Such a request should be made at least one week and preferably two weeks before the cash will be required. The individual receiving the advance (the "Trustee") must obtain receipts and invoices for all expenses.

For ongoing tasks (e.g. New Member Kits, Thank You Cards) the advance should be sufficient to cover expected expenses for 2-3 months. As the Petty Cash gets low and if additional expenditures are expected, the Trustee should provide an Expense Statement or email listing and totaling the expenses incurred and all receipts and invoices (originals or scanned copies) to the Treasurer. The Treasurer will then issue a cheque in the amount of the reported expenses as an advance to replenish the Petty Cash fund, obtain a second signature and send/deliver it to the Trustee. The Treasurer should not issue a cheque that would exceed the budget by more than 10%(?).

If it appears that the expenses required to complete the task will exceed the approved budget, a motion should be made to approve an increase in the budget or to terminate the task. The Treasurer should not issue a cheque to replenish Petty Cash until the increase is approved. The Trustee should advise the Executive prior to a meeting if an increase is required before the next meeting.

If the task is nearing completion, the Treasurer should only issue a cheque for the amount required to complete the task. If the task is completed, a cheque should only be issued for the amount not already covered from Petty Cash advances. If the full amount of the Petty Cash has not been spent (i.e. cheques issued is greater than expenses reported) the Trustee must return the unused portion to the Party.

Accounting

A Petty Cash advance is not treated as an expense. The Petty Cash is an asset of the Party until it is spent. Since it is not under the control of the Treasure it is considered as an Account Receivable. It is money owed to the Party by the Trustee.

When the Treasurer receives an expense statement from the Trustee, the expenses will be recorded as reductions in Accounts Receivable. If the Petty Cash is to be replenished, the new advance will increase the Accounts Receivable.

Sample Petty Cash for a Project 

The following table shows the transactions for a hypothetical project with an approved budget of $1,000. Every positive transaction is balanced against a negative transaction. Funds added to Petty Cash (Accounts Receivable) reduces chequing. Expenses paid from Petty Cash are charged against the Expense Budget.

1. On January 8 the Executive approved a budget of $1,000 for some project that will take several months. In effect, an amount of $1,000 has been set aside in the chequing account and in the Expense Budget. whoever volunteered to take on the project is designated as the "Trustee."
2. On February 1 a cheque is issued to the designated Trustee for $300, transferring the funds from Chequing (reducing the balance) to Accounts Receivable (increasing the balance).
3. On March 30 the Trustee submits an expense statement and supporting documentation for expenses of $200, which is charged to various expenses and reduces the amount outstanding in Accounts Receivable (A/R) and increases Expenses by the same amount
4. The Treasurer issues a cheque to the Trustee in the amount of the expenses reported taking funds from Chequing and, charging it to A/R and replenishing the Trustee's Petty Cash Account.
5. The process repeats for June and August.
6. On September 30, the project is believed to be completed, so the Petty Cash is not replenished and a cheque for $25, the amount not covered by Petty Cash, is issued to the Trustee. The project appears to be completed for $950, $50 under budget. Note that if the final expenses at this point had been less than $300, the Trustee would be expected to return the balance in the Petty Cash account to the Party.
7. A short time later, the Trustee discovers an additional expense is required and a cheque for the additional $75 is issued. Now the project total is $1,025, $25 over budget.

Date	Description	Petty Cash - A/R		Chequing		Expenses
		Transaction	Balance	Transaction	Balance	Transaction	Total
8-Jan	Approved Budget				1,000
1-Feb	Initial Advance	300	300	-300	700
30-Mar	Expenses reported	-200	100			200	200
	Reimburse Petty Cash	200	300	-200	500
30-Jun	Expenses reported	-150	150			150	350
	Reimburse Petty Cash	150	300	-150	350
31-Aug	Expenses reported	-275	25			275	625
	Reimburse Petty Cash	275	300	-275	75
30-Sep	Expenses reported	-325	-25			325	950
	Pay Balance of Expenses	25	0	-25	50
15-Dec	Pay additional expenses			-75	75	75	1,025