SPENDING POLICY:

Ultimate control of spending rests with the General Membership which must approve the annual budget each year.  At the same time, staff, committees and the Board of Directors must have sufficient flexibility to manage the Co-operative.  This policy outlines a set of guidelines for achieving spending control.

The Finance Committee will monitor receipts and expenditures on a monthly basis and propose a revised budget to the Board if required.

1.         Annual Budget:

Prior to the beginning of each fiscal year, a budget for the year will be presented to a General Meeting. The Members have the right to question and amend the budget. The budget must, budget separately for each major category of revenue and expense. Each section of the budget must be, accompanied by sufficiently detailed notes to allow meaningful discussion by the Members.

Once approved by the General Meeting, the budget authorizes staff and committees and the Board of Directors to incur expenses according to the provisions of the following sections.

During the course of the fiscal year, the Board may revise the budget if necessary.  Any such revisions must be reported to, or approved by a General Meeting as follows:

a)   Any increase or reduction in one budget category exceeding 5% of the total budget for that category must be reported to the next General Meeting.

b)   Any increase or decrease in expenses which result in an increase or decrease in the total expense budget by 5% to 15% must be reported to the next General Meeting.

c)   Any increase or decrease in expenses which result in an increase or decrease of the total expense budget by more than 15% must be approved in advance by a General Meeting.

d)   Any change in housing charges as a result of revisions to the budget must be approved in advance by a General Meeting in accordance with the Co-operatives Act and the Co-op’s bylaws.

2.         Mandatory Expenses:

Mandatory expenses are those that are incurred by the Co-op routinely and are not the result of a specific purchase or order.  This includes such things as municipal taxes, utilities (electricity, water and sewage), salaries (once a position and salary has been approved), insurance (if the coverage is not being changed), mortgage payments and any contracted services, once a contract has been signed.

Mandatory expenses may be, paid by the Treasurer or a staff person designated by the Board of Directors.  If it appears that a mandatory expense will be higher than anticipated by the budget, it must be reported to the next meeting of the Board. The Board shall then make or propose an appropriate revision to the budget in accordance with Section 1 of this policy.

3.         Discretionary Expenses:

Discretionary expenses are those where the Co-op has an option as to when (or if) to incur them.  They include such things as equipment purchases, maintenance supplies, office supplies, professional services, education, and membership in other organizations, new staff positions, changes in insurance coverage and signing new contracts for any goods or services.  All discretionary expenses should be incurred in consultation with the Treasurer and Finance Committee.

The Co-op’s purchasing agent is appointed by the Board of Directors and is the person responsible for signing all purchase orders.

All discretionary expenses must be authorized by a purchase order.  The Co-op’s purchasing agent may issue purchase orders as follows:

a)   Where the expense is within the budget approved for that category up to $200, no further committee approval is required;

b)   Where the expense is within the budget approved for that category and over $200, committee approval is required;

c)   Where the expense will put a budget category over budget or was not anticipated by the budget, it must be approved by the committee and the Board or by the General Membership.

Before approving a discretionary expense of more than $1,000., the Co-op will normally obtain 3 bids or quotes.  Regularly contracted goods and services must have 3 bids or quotes.

4.         Emergency Expenses:

Emergency expenses are those that have to be incurred immediately because a delay will risk property damage or endanger personal safety.

Notwithstanding sections 1, 2, and 3; an emergency expenditure may be, approved by a designated staff or members without a maximum.  A special purchase order is required.  Special purchase orders must be signed by 2 of 5 people designated by the General Membership as having the authority to approve emergency expenditures.

All emergency expenditures must be, reported to the next meeting of the General Membership by the Finance Committee.

5          Signing Officers:

All cheques drawn on a Co-op account must be, signed by two of the signing officers (Executive Directors: President, Vice President, Treasure and Secretary).

6.         Miscellaneous:

No person may issue any purchase order or approve any purchase or payment that substantially benefits that person.