Financial Management Handbook
Financial Management Handbook
(Draft Copy)
(Childcare Centre Logo)
ABC Childcare Centre
School Year
Address
Telephone Number
Fax Number
Email Address
Website
TABLE OF CONTENTS
INTRODUCTION 4
FINANCIAL POLICIES AND PROCEDURES
INTERNAL CONTROL
Financial Policies And Procedures 6
RISK MANAGEMENT
Fraud Detection And Prevention 7
RECORDS ADMINISTRATION AND RETENTION
Records Retention 9
Required Documents 11
Annual General Meeting Minutes 15
Documents Submitted To Children’s Services 15
BUSINESS PLANNING AND BUDGETING
Budget 18
Cash Flow Forecast 19
Budget Revenue And Expenditures 19
CASH AND BANKING
Petty Cash 21
Preauthorized Transactions 21
Deposits (Cash And Cheques) 22
Cheque Signing 23
Bank Accounts Reconciliation 25
PAYROLL
TD1s 27
Terms Of Employment 27
Record Of Employment 29
Payroll Information 29
T4s 30
Payroll Related Remittances 31
Wage Grants 33
PURCHASING AND ACCOUNTS PAYABLE
Purchasing 36
Third Party Contracted Services Agreement 36
Vendor Invoice 37
REVENUE AND ACCOUNTS RECEIVABLE
Attendance 38
Fee Records 38
Parent Fee Reconciliation 39
Outstanding Parent Fee 39
Nsf Cheques 39
Other Receivables 39
INVENTORY AND ASSETS
Inventory And Assets 40
FINANCIAL REPORTS
Audits And Audited Financial Statements 41
Financial Reports 42
APPENDIX: POLICIES, PROCEDURES, TIPS AND FORMS
Code Of Ethics 44
Conflict Of Interest 45
Fraud Awareness Training 47
Safeguards Against Theft 48
Sample Bylaws 49
Minutes Just Don’t Happen 50
Sample: Board Meeting Minutes Form 51
Conducting Elections 53
Sample: Operating Budget 56
ABC Childcare Centre: Annual Operating Budget 56
Sample: Cash Flow Forecast 61
Policy: Terms And Conditions For Use Of Petty Cash 62
Sample: Employment Contract 63
**Note: ABC Childcare Centre has the responsibility to assign each task regarding the financial management of the Centre to the person whom they see fit. These tasks may be assigned to specific people, or to specific positions (for example: the Treasurer, the President, etc.), and each Centre will have these tasks divided differently depending on their organization.
It is best to assign all financial management tasks during the review of this handbook, and during the alteration and/or creation of any and all policies and procedures.
It is important to remember to record the assignment of the tasks so that each member will know what they are responsible for.
INTRODUCTION
FINANCIAL MANAGEMENT
Financial management is one of the most important policy development and monitoring areas of a Board of Directors.
It can be simply described as, ‘the managing and accounting of funds to ensure the funds are spent in accordance with the Centre and Board objectives. The effective acquisition, allocation, and use of the funds determine the extent to which the goals and objectives of the Centre and the Board are realized’.
Sound financial policies and practices form an essential part of the internal control system that exists within ABC Childcare Centre. The following are some key benefits of an internal control system:
✓ Provides reliable information necessary to make decisions within the Centre and produces accounting records necessary to aid in preparing financial statements and financial reporting
✓ Aids in preventing and detecting error and fraud
✓ Protects against unintentional exposure to risk by requiring regular comparisons of recorded assets with those actually on hand or limiting access to assets
✓ Measures the effectiveness and efficiency of operations
✓ Ensures compliance with applicable laws and regulations
ABC Childcare Centre is responsible for maintaining its financial records in accordance with generally accepted accounting principles. These records must be retained for at least seven (7) years.
Key Players in Successful Financial Management
Finance Committee
Depending on the complexity of the Centre, the Board of Directors may wish to have a Finance Committee. The Committee may be comprised of the Board Treasurer, Vice-President, Bookkeeper (if applicable) and additional volunteer Board members. The Committee meets throughout the year and may be responsible for:
✓ Reviewing the Treasurer’s records and reports
✓ Preparing budgets as required, either annually or quarterly (i.e. program fundraising, publicity, etc.)
✓ Reviewing the operating budget prior to the Board
✓ Monitoring budget performance
✓ Reviewing the financial statements as prepared by external auditors
✓ Overseeing salaries, membership and insurance, as well as any additional matters concerning the financial health of the Centre
The work of the committee not only protects the Centre but provides assurance to its members and supporters that finances are being handled appropriately!
Audit Committee
Once a Centre reaches a certain size, it may require both a Finance Committee and an Audit Committee. The Audit Committee may be responsible for:
✓ Ensuring that the audit is conducted in an efficient and cost effective manner
✓ Overseeing the financial systems and internal controls
✓ Recommending approval of the annual audited financial statements to the Board
✓ Recommending the appointment of the external auditor
If the Centre does not need two separate Committees, the Finance Committee may take on some of these roles or the Board itself may fulfill some of the roles.
Treasurer
The Treasurer’s function is to ensure management of the Centre’s finances and report either directly to the Board of Directors or through the Finance Committee to the Board of Directors. In addition to their responsibility as a member of the Board, the Treasurer may be responsible for:
✓ Maintaining accurate accounting records (i.e. bank audit, salaries, benefits, taxes, receipts, bank reconciliations, Government remittances and forms, etc.)
✓ Assisting the Board of Directors and/or the Finance Committee in the preparation of the operating budget
✓ Monitoring the Centre’s budget
✓ Reporting to the Board of Directors and the general membership on finances
✓ Preparing any required financial reporting forms on a timely basis
✓ Arranging auditing procedures at the fiscal year-end (if required)
✓ Collecting, receiving and disbursing the funds
✓ Maintaining payroll
✓ Monitoring and preparing the forms for the Ministry of Community, Family and Children Services (i.e. wage enhancement, pay equity, etc.)
✓ Co-signing all cheques and other Centre related documents
*Note: in some Centres the role of the Treasurer is combined with that of the Secretary.
*Note: not all Centres will require or use the services of a Bookkeeper — those Centres that do not use this service will have the Bookkeeper’s responsibilities delegated to the Board Treasurer
Senior Staff/Supervisor
Each Centre has a combination of a Supervisor and/or senior staff members who are responsible for ensuring that the financial policies established by the Board of Directors are carried out, as well as for the day-to-day financial transactions of the Centre.
*Note: each Board will define the roles, responsibilities and authority that each staff member and Supervisor will need to carry out their job
FINANCIAL POLICIES AND PROCEDURES
INTERNAL CONTROL FINANCIAL POLICIES AND PROCEDURES
Financial policy is written so that the roles, responsibilities and limits of authority of those responsible for financial management are clearly articulated.
Using simple language, with a straightforward tone is the way to ensure that everyone can read and understand what is meant by the policy!
ABC Childcare Centre has the following policies and procedures in place for effective financial management:
✓ Risk Management
✓ Records Administration and Retention
✓ Business Planning and Budgeting
✓ Cash and Banking
✓ Payroll
✓ Purchasing and Accounts Payable
✓ Revenue and Accounts Receivable
✓ Inventory and Assets
✓ Financial Reports
RISK MANAGEMENT
FRAUD DETECTION AND PREVENTION
What is Risk Management?
Risk management is any procedure or practice that a Centre uses to reduce exposure to liability. It includes actions to protect the Centre as a whole, its physical assets, its status (either not-for-profit, co-operative or charitable), its reputation, and its ability to raise funds. Risk management programs usually include financial management controls.
Large organizations may have formalized risk management policies and managers whose job is to oversee risk management. However, for small and medium-sized Centres without the staffing resources of larger groups, risk management may simply mean ensuring that a systematic, well-planned series of steps is readily available for Board members, program managers and volunteers to follow in order to minimize risk.
Types of Fraud...
Fraud (which is intentional and not done by error) has three main risk areas:
✓ Macro (actions by leaders or abuse, misuse of restricted funds, lies in financial or program results, tax information fraud and actions that damage the Centre’s reputation)
✓ Micro (embezzlement, receipts diversion, information technology, misuse of data, equipment and vendor schemes)
✓ Systemic (expense reimbursement, fundraising assets, payroll and benefits, debit cards and credit cards)
What can ABC Childcare Centre do?
As part of the ABC Childcare Centre’s risk management and fraud and error detection practices, the Board of Directors will meet on an ongoing basis to identify Centre-wide risks, both short-term and long-term. The Board will prioritize risks and develop policies to manage unforeseen events and ensure that the best risk management policies are applied.
These policies will include assigning responsibilities within the Centre and reporting procedures to ensure timely responses. All Board and staff members will adhere to ABC Childcare Centre’s Code of Ethics policy (refer to the Appendix of this handbook for a complete version of this policy).
Fraud awareness training will be made available to Board and staff members on an ongoing basis. The Supervisor and/or Board President will have received training and keep this up to date (refer to the Appendix of this handbook for more information).
Those persons having direct responsibility for finances will rotate these positions; ABC Childcare Centre will also ensure that there are backup individuals who are trained and available to replace vacationing and sick employees for required duties such as daily financial operations.
The Board of Directors and/or the Finance Committee is responsible for monitoring the financials of ABC Childcare Centre on a monthly basis. The Board of Directors and/or the Finance Committee will review monthly statements for accuracy and discrepancies. Discrepancies will be discussed immediately and followed up with promptly and reported to the Board at the following meeting. Failure to resolve any discrepancies will be investigated by an Ad-Hoc Committee.
The Board of Directors and/or the Treasurer will contract an auditor annually and report findings to the general membership at ABC Childcare Centre’s Annual General Meeting (AGM).
*Note: for additional tips on safeguarding ABC Childcare Centre against theft, refer to the Appendix of this handbook
RECORDS ADMINISTRATION AND RETENTION
RECORDS RETENTION
ABC Childcare Centre retains records for some time to ensure that questions about the services provided and accountability to external regulatory and legislative bodies can be answered.
For Income Tax purposes, the Income Tax Act describes a record as `...an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether written or in any other form’.
As a general rule, the Canada Revenue Agency (CRA) does not specify the books and records to be kept, however the books and records have to:
✓ Permit the taxes payable or the taxes or other amounts to be collected, withheld, or deducted by a person to be determined
✓ Substitute the qualification of registered charities or registered Canadian amateur athletic association for registration under the Act
✓ Permit the verification of all charitable, athletic, and political donations received for which a deduction or tax credit is available
✓ Be supported by source documents that verify the information in the books and records
A source document includes items such as sales invoices, purchase invoices, cash register receipts, formal contracts, credit card receipts, delivery slips, deposit slips, work orders, dockets, cheques, bank statements, tax returns, and general correspondence whether written or in any other form.
In addition, other documents, whether written or any other form, including supporting documents such as accountants working papers that were used to determine the obligations and entitlements with respect to taxes payable, collectible or to be remitted are considered part of the books and records of the taxpayer and must be made available to the CRA.
Length of Document Retention...
✓ All financial records must and will be retained for a minimum of seven (7) years
✓ Annual audited statements, the general ledger and annual adjusting journal entries must be kept for the lifespan of the Centre, plus two (2) years
✓ All children’s files must be retained for a minimum of two (2) years
✓ Employee files must be retained for seven (7) years after the termination of employment
✓ Board Meeting Minutes will be kept indefinitely
Means of Storage...
All paper files will be stored in a designated locked storage area.
Any and all official documents, such as Corporation papers, Letters Patent, by-laws, collective agreement, and any Children’s Aid Society records should be kept in a fire-safe locked box.
All electronic records, including the bookkeeping journals and general files, require password access and are backed up weekly to an external hard-drive.
The signing officers of the Board of Directors have keys to the designated locked storage area, and password access to the electronic records, in the case of an emergency.
Destruction of Records...
Paper files that contain confidential, financial or personal information are destroyed by shredding.
Electronic information is destroyed by deleting it, and when the hardware is discarded, it is ensured that the hard drive is formatted to erase any information contained within.
Additional Information Regarding Destroying/Shredding and Retention of Records...
The following is a list of records that need to be destroyed by shredding:
|Executive Level |Human Resources |
|Strategic Reports |Payroll Information |
|Budgets Performance |Appraisals |
|Legal Contracts |Applications |
|Correspondence |Disciplinary Reports and Promotions |
| |Medical Records |
| |Treatment Programs |
|Accounting and Information Technology |Operations |
|Payroll Statements |Manuals |
|Budget Schedules |Training Information |
|Internal Reports |Activity Sheets |
|Supplier |Information Contracts |
|Customer Lists |General Service Information |
| |Health and Safety Issues |
| |Appraisals and Product Testing |
|Procurement |Sales and Marketing |
|Supplier Records |Customer Lists and Contracts |
|Supplier Specifications |Strategies |
|Supplier Purchase Orders |Advertising |
|Supplier Confidential Information |Activity Sheets |
|Corporate Records |Training Information |
Records Specific to Co-operatives That Must Be Kept...
A co-operative must keep the following records:
✓ A copy of the Articles of the co-operative
✓ All by-laws and resolutions, including special resolutions of the co-operative
✓ A register of members and security holders in which is set out the names alphabetically arranged or alphabetically indexed in appropriate categories of,
• In a co-operative with share capital, all persons who are or have been within ten (10) years registered as holders of shares in the co-operative and the address including the street and number, if any, of every such person while a holder, in which are set out also the number, class and series of shares held by such holder
• In a co-operative without share capital, all persons who are or have been within ten (10) years registered as members of the co-operative and the address including the street and number, if any, of every such person while a member
• In a co-operative with or without share capital, all persons who are or who have been holders of debt obligations other than debt obligations in bearer form of the co-operative and the address including the street and number, if any, of every such person, while a holder in which are set out also the class or series and principal amount of the debt obligations held by such holder
✓ A register of Directors in which are set out the names and residence addresses while Directors, including the street and number, if any, of all persons who are or have been Directors of the co-operative with the several dates on which they have become or ceased to be a Director
✓ Proper accounting records in which are set out all financial and other transactions of the co-operative including, without limiting the generality of the foregoing, records of:
• All sums of money received and disbursed by the co-operative and the matters with respect to which receipt and disbursement took place
• All sales and purchases of the co-operative
• The assets and liabilities of the co-operative
• All other transactions affecting the financial position of the co-operative
✓ The minutes of all proceedings at meetings of members, Directors and any Executive Committee
REQUIRED DOCUMENTS
All of the following documents of ABC Childcare Centre are available for review for all programs, at any time:
✓ Accounts Payable records
• Amounts owed by the Centre, i.e. unpaid bills for purchases, monthly obligations, loan repayments, etc.
✓ Accounts Receivable records
• Amounts to be received by the Centre at a future date, i.e. parent fees, municipal funding, GST, etc.
✓ Bank deposit books
✓ Record of amounts deposited into the Centre’s bank account
✓ Bank reconciliations
• Reconciliation of the bank statement to identify any errors or omissions in either the bank’s or the Centre’s records; it also helps to keep track of the Centre’s true bank balance at all times
✓ Banking — bank signature cards
✓ Bank statements, blank cheques and cancelled cheques
✓ Budget for the Centre and the program
• A monetary plan with a forecast of cash flow, revenue, expenses and profit or loss over a future period, usually one year or one operating cycle
✓ Contracts and schedules from Children’s Services
✓ Employment contracts or letters of employment
✓ Financial Management policies and procedures
✓ Financial statements/reports
• Formal financial reports prepared from accounting records (i.e. Balance Sheet, Statement of Retained Earnings, Statement of Income, Cash Flow Statement)
✓ Government remittance statements for CPP, EI, Tax, GST, EHT and WSIB
• Statements outlining the amounts remitted to the Receiver General of Canada, Worker’s Compensation Board of Canada, Ministry of Finance, Canada Revenue
✓ Insurance policies
• Current and valid insurance policies from Insurance provider (coverage amounts will depend upon many factors that need to be discussed with Insurance provider)
✓ Payment records
• Record of payments made (must include type of payment, amount of payment, date of payment, name and address to which payment was made, invoice number for payment, etc.)
• Record of payments received (must include type of payment received, amount of payment received, date of payment received, name and address of payee, account to which payment is to be applied, etc.)
✓ Payroll records
• A record of wages or salaries paid or payable; and the actual wages and salaries paid during a given time
✓ Petty Cash reimbursement/reconciliations
• To claim money from the petty cash fund, a petty cash voucher must be submitted with the date of payment, name of person requesting payment, amount claimed, description of the expense, and signature of the payee and the petty cash custodian, recorded
• To reconcile the petty cash fund, the custodian will take all of the petty cash vouchers (with cash register receipts or store vouchers attached whenever possible), plus the cash in the box and add them together to equal the fund total
• To request reimbursement of the fund, the custodian should list the vouchers, as well as record the cash on hand and the fund total
✓ Signing authority
• A list of three or four Board of Directors members who have signing authority for each year
• Cheques and policies require two signatures of signing authorities before the cheque can be paid or the policy passed
✓ TD1s
• TD1s are maintained for each employee ensuring correct Social Insurance Number and the rate of income tax deduction
✓ T4s and T4 Summary
• T4s are prepared and distributed to employees by February 28th following the calendar year to which the information applies
• T4 Summary is reconciled with the payroll records
• T4s and T4 Summary are submitted to the Canada Revenue Agency by February 28th following the calendar year to which the information applies
• Copies of T4s must be available onsite for review
✓ Trial Balance
• Listing and totaling all balances in a ledger to verify that the total debits equal the total credits; and
• Listing and totaling all balances in a subsidiary ledger to verify that the total is in agreement with the controlling general ledger account
✓ Vendor Invoices
• Invoices received from vendors are verified against goods and/or services received (i.e. packing slip)
✓ Board of Directors Manual (will only be addressed if applicable to the Centre)
• A manual outlining all of the roles and responsibilities of the Board members, as well as policies, procedures, goals and plans of the Centre and the Board of Directors
✓ Board of Directors Meeting Minutes (will only be addressed if applicable to the Centre)
• An accurate and concise legal record of meetings of the Board of Directors, that if necessary, may be subpoenaed
✓ Board of Directors name, address, position on the Board (will only be addressed if applicable to the Centre)
• A list of all of the contact information for members of the Board of Directors including name, address and position on the Board
✓ Business Registration Number (will only be addressed if applicable to the Centre)
✓ By-Laws (will only be addressed if applicable to the Centre)
• A list of the everyday rules by which the Centre is managed
• These statements (often written in legal language) outline the purpose of the Centre, the philosophy of the educational program and the manner in which the corporation will do business
• For Sample Bylaws, refer to the Appendix of this handbook
✓ Collective Agreement (will only be addressed if applicable to the Centre)
• A negotiated agreement, which is not enforceable at law, between the Centre and employee representatives, covering rates of pay and conditions of employment, or both
✓ Employee Record of Employment (will only be addressed if applicable to the Centre)
• Record of Employment for terminated employee is issued within the prescribed time line (ROE must be issued within 5 calendar days of the interruption of earnings or the day the employer becomes aware of the interruption)
• Copies of Record of Employment must be kept on file
• All outstanding salaries and benefits calculated according to employment contract or employment standards and are paid out in the pay period following termination (if applicable)
• Where negotiation is involved, payments are paid out according to the settlement agreement (if applicable)
✓ Employee Timesheets (will only be addressed if applicable to the Centre)
• A record of hours worked by each employee during a period of time
✓ Incorporation Paper or Letters Patent or Master Business License (will only be addressed if applicable to the Centre)
• A corporation is an artificial being that exists only in the contemplation of law
• It is collective, constituted and arranged according to the needs of its members
• It provides limited liability to individual members of the corporation, legal status (it is held responsible for its actions), the suggestion of continuity, and a structure which implies that a rational collective sense prevails
✓ Legal binding contracts that the Centre enters into with a third party (will only be addressed if applicable to the Centre)
• A written legal contract that confirms agreement to receiving goods and/or services (this contract must be signed and dated by all parties involved in order to be legally binding)
✓ Pay equity plan and proxy order (will only be addressed if applicable to the Centre)
• Pay equity is ‘equal pay for work of equal value’
• The purpose of pay equity is to redress differences in compensation due to the systemic gender discrimination suffered by persons who occupy positions in predominantly female job categories
• Every Centre of ten (10) employees or more must comply with the Pay Equity legislation
✓ Wage grant records (will only be addressed if applicable to the Centre)
• Records are maintained for all wage grants received, documenting payments to staff and outstanding balance
Additional Required Documents if the Centre is a...
|Group Centre |Special Needs and Family Support Program |
|Parent fee letters and memos |Year-to-Date reports |
|Children’s attendance records |Quarterly Year-to-Date report for each location/site by the required date|
|Childcare licenses | |
|Fee letters regarding Subsidy Assessed Fees (City of | |
|Toronto) | |
|Group Centre/HCC Enrolment Sheets (City of Toronto) | |
|Group Centre Invoices (City of Toronto) | |
|Group Centre/HCC Invoice Transaction Detail Reports (City| |
|of Toronto) | |
|Parent Fee Receipts | |
|Parent Handbook | |
|Wage Scale | |
ANNUAL GENERAL MEETING MINUTES
The Annual General Meeting (AGM) is a legal obligation that must be held within eighteen (18) months of incorporation and then every fifteen (15) months thereafter.
The bylaws will describe the membership of the corporation. This is important because it is the members who can vote at the AGM. The members of the corporation are usually parents/guardians of the children attending ABC Childcare Centre and other interested people from the community. Staff members are usually not members and do not vote. Members of the corporation elect the Board of Directors, vote on issues or resolutions presented at the meeting, participate on committees and are eligible to be elected to the Board.
When the AGM is being planned, at least thirty (30) days notice must be given to the members before the meeting.
*Refer to the Appendix of this handbook for additional Minute Writing Tips
The agenda at the Annual General Meeting should include at least the following elements...
✓ Minutes from the last AGM
✓ The financial statements and the auditor’s report
✓ A report on the Board’s activities from the President of the Board of Directors
✓ Board resolutions from the past year requiring a membership vote
✓ A report on the Centre’s activities from the Supervisor
✓ The Nominating Committee presentation of the slate of nominations for the Board of Directors
✓ The election of the new Board members (refer to the Appendix of this handbook for more information on Conducting Elections)
✓ Other business
Part of the work of the Board of Directors in preparing for the AGM is to write the annual report. This report should include:
✓ A short history of the Centre
✓ A description of the activities and events at the Centre during the part year
✓ Acknowledgement of any sponsors of the Centre
✓ A list of the staff members
✓ A list of the Board of Directors
✓ The audited financial statements
The annual report should be available to the members of the corporation a few weeks before the AGM so that they can read through and be prepared to ask any questions about the information in the report.
DOCUMENTS SUBMITTED TO CHILDREN’S SERVICES
The following documents of ABC Childcare Centre are submitted to Children’s Services on an annual basis by the required date:
✓ Annual Budget
• A monetary plan with a forecast of cash flow, revenue, expenses and profit or loss over a future period, usually one year or one operating cycle
✓ Parent Fee Memo (for group and HCC programs)
✓ Audited Financial Statements
• Financial statements and records that have been examined by an independent accountant, for the purpose of expressing an opinion as to whether the financial statements present fairly the financial position at a given date and the results of operation ending on that date in accordance with the Generally Accepted Accounting Principles; a report will accompany these financial statements
✓ Insurance Renewal Certificate
• If the Centre is within the limits of the City of Toronto, this certificate must name the City of Toronto as additional insured with $2 million liability coverage
• Note: All Centres should check with their individual municipalities and Insurance providers to determine if additional insurance is required
✓ Lease Renewal (will only be addressed if applicable to the Centre)
• A rental agreement or lease spells out the terms of the arrangement, while setting out the obligations and responsibilities of each of the parties and provides a framework to sort out problems that may arise; a renewal of the lease may be for a term of one (1) year or more
✓ Invoices for amortization expense (will only be addressed if applicable to the Centre)
• Amortization is spreading a large expenditure proportionately over a fixed period of time (i.e. the cost of capital assets over their useful life); and
• Gradual and systematic payment of a large sum, usually including interest over a fixed period of time (i.e. mortgage)
✓ Collective Agreement renewal (will only be addressed if applicable to the Centre)
• A negotiated agreement, which is not enforceable at law, between the Centre and employee representatives, covering rates of pay and conditions of employment, or both
✓ Management Letter from the Auditor (will only be addressed if applicable to the Centre)
• A letter from the auditor outlining the planning and procedures that took place during the audit of the Centre, as well as any recommendations; also, a report of their findings will accompany the financial statements
✓ Response to the Management Letter (will only be addressed if applicable to the Centre)
✓ Annual General Meeting Minutes (will only be addressed if applicable to the Centre)
• Accurate records are an invaluable source of information about the business of a corporation. The minutes of all meetings of the Board and its committees are a legal record and may be subpoenaed. Accuracy is vitally important because the minutes are a permanent record of decisions and reports of the Board and its committees.
✓ Wage Subsidy and Wage Improvement Utilization (will only be addressed if applicable to the Centre)
• Records must be maintained for all wage grants received, documenting payments to staff and outstanding balances
• Wage Subsidy Grants must be distributed to staff in accordance with the Wage Subsidy Policy and Guidelines for Service Providers
• Wage Improvement Grants are distributed to staff in accordance with the approved Wage Scale and Implementation Plan
✓ Pay Equity Year-to-Date Report (will only be addressed if applicable to the Centre)
• An annual report of Pay Equity Grants and their distribution (these grants must be distributed to staff in accordance with the Pay Equity Guidelines)
✓ A Wage Subsidy and Wage Improvement Utilization form and a Pay Equity Year-to-Date Report must be submitted for each location/site by the required date, for programs that receive Wage Grant funding
The following documents must be submitted to Children’s Services on a quarterly basis by the required date for Special Needs and Family Support Programs:
✓ Year-to-Date Report for Special Needs and Family Support Programs
A Notification Letter must be submitted to Children’s Services in advance of the proposed change date:
✓ Fee Memo when fees change (N/A for Special Needs and Family Support Programs)
✓ Licensed capacity change (N/A for Special Needs and Family Support Programs)
✓ Centre or program location address change
✓ Centre or program name change
✓ Fiscal year end change
✓ Program closing (60 days prior)
✓ Ownership change (90 days prior)
✓ Termination of service contract with City of Toronto (60 days prior) (will only be addressed if applicable to the Centre)
BUSINESS PLANNING AND BUDGETING
BUDGET
What is a Budget?
A budget is a financial plan of action for the coming year, or period. The ability to accurately estimate income and expenditures is a critical skill, because funding usually covers just what the Centre needs for its annual operations. The Centre’s financial management team — the employees and the Board of Directors involved in managing the Centre’s financial function — must collaborate to create and manage a budget that anticipates how much those activities will cost. The operating budget includes projected revenue and expenses for the year ahead.
*Refer to the Appendix of this handbook for a Sample Operating Budget
What is the Budget Process?
✓ A summary of the previous year’s income and/or expenditures and projections for the upcoming year(s) should be assembled using financial documents including: audits, end-of-year financial statements, previous year’s budget, bank statements, receipts, and so on.
✓ A meeting (involving the staff and the Board of Directors) should be organized to discuss ABC Childcare Centre’s goals and objectives for the upcoming year and to determine how the activities will be funded, using the information that has been assembled to develop consolidated, and Centre-wide financial projections.
✓ The budget is prepared approximately three (3) months before the fiscal year begins
✓ The Treasurer, Finance Committee and the Board of Directors will review the draft budget and discuss assumptions on which the budget was based.
✓ The Board of Directors approves the final projections.
✓ The budget is submitted (if required) to the municipality by the required date with all required supporting documentation.
✓ Throughout the year, the budget is updated to reflect significant changes.
✓ ABC Childcare Centre must have an annual budget for each location/site.
What are some Guidelines for Creating an Operating Budget?
✓ Be thorough and realistic in your estimate of expenses
• Do not underestimate how much each line item of the budget will cost (use the going rate for consultants, rent, and so on)
• Do not shave salaries or underestimate benefits, particularly health insurance (a realistic current estimate of health, retirement and other benefits is 25% of salary — remember that the success of your Centre will depend largely on the calibre of your employees, and you want to attract and retain the best!)
✓ Be thorough and realistic in your estimate of income
• Remember that only about 10% of new grant requests might be approved
• Encourage fundraising committee members to maintain current funders through appropriate methods of cultivation and appreciation
✓ If your Centre is program-driven, put together a consolidated operating budget that shows the total cost of annual operations
• The budget should reflect every activity to which the Centre can ascribe a dollar amount
• Include in-kind contributions of space, equipment, professional services, and so on
• Effective planning and decision making by the Board of Directors and staff can only take place if full information is available on program and administrative operations
✓ Project a positive bottom line
• A healthy budget projects a surplus of income over expenses
• Also acceptable is a budget in which estimated income and expenses are balanced
• A Centre may also project a deficit in which, for the upcoming period, expenses might exceed immediately available funding — in such cases, a fundraising or income-generating plan must be in place to cover those expenses within a reasonable time — ideally one year, preferably no more than three years
CASH FLOW FORECAST
A Cash Flow Forecast is a simple tool that allows ABC Childcare Centre to spot any obvious gaps in the finances before they happen, allowing the Centre to take steps to minimize the effects.
ABC Childcare Centre prepares monthly Cash Flow Forecasts based on the budget, and compares these figures to the actual performance. The Board of Directors reviews the statements (forecasted amounts versus the actual amounts) and explanations for variances will be provided by the Supervisor and/or the accountant.
*Refer to the Appendix of this handbook for a Sample Cash Flow Forecast
Preparing a Simple Cash Flow Forecast...
The Cash Flow Forecast consists of two columns for each month — this allows a forecast to be made, and then the actual figures to be entered as they become available... over time this will help to make the forecasts as accurate as possible!
To begin creating the Cash Flow Forecast, basic information about the money coming in and out of the business is required. Review the paperwork for the Centre on regular expenses that go out every month (i.e. rent, wages, telephone invoices, etc.)...since every penny that is spent needs to be found, the easiest way is to check invoices off against a recent bank statement!
Once the expenditures have been recorded on the Cash Flow Forecast, the next item to estimate is the revenue for each month...remember, this tool looks at money in and out of the bank account, so services that are provided today, may not turn into cash for 30 days!
Finally, get the opening bank balance for the month — this will be found on the most recent bank statement, or from the online banking account. It is important to ensure that the bank statement and the Cash Flow Forecast match (the forecast is a great way to spot any mistakes made on the account).
The Cash Flow Forecast will work out whether the Centre has a negative or positive cash flow each month, and how this will affect the bank account!
BUDGET REVENUE AND EXPENDITURES
ABC Childcare Centre uses the budget and the Cash Flow Forecasts to set fees for childcare services, and to determine expenditure priorities.
ENROLMENT MANAGEMENT
ABC Childcare Centre is licensed to enrol children from the ages of ________ to ________, up to a maximum of __________ students. Admission is open to the community at large and is on a first-come basis.
ABC Childcare Centre maintains a Waiting List should the school be filled to capacity. There is often some turnover in registrations during the school year, and should this occur, the families on the waiting list are contacted in sequential order.
In the event of a long waiting list, ABC Childcare Centre and its Board of Directors will meet to discuss the possibility of moving to a larger facility, operating a satellite Centre, expanding existing programs, etc.
Enrolment statistics are reviewed on a monthly basis, and compared with the expected enrolment upon which the budget was formed. If a change in enrolment affects staffing requirements, the budget will be revised as necessary.
CASH AND BANKING
PETTY CASH
To allow for small payments that may be required ‘on the spot’ or for items that are too small to write a cheque for, ABC Childcare Centre has established a petty cash system.
The petty cash fund of ABC Childcare Centre has been set up and is operated by the following:
✓ The amount of the petty cash fund is determined by the Board of Directors (a cheque for this amount has been written and cashed)
✓ The petty cash fund is controlled by one person who is designated as the custodian, and is accountable for the funds (an alternate person is trained and is allowed to act as the custodian when the regular custodian is on vacation or absent for other reasons)
✓ The petty cash fund is stored in a secure location
✓ To make a disbursement from the petty cash, a petty cash voucher must be filled out and accompanied by a receipt which is attached to the voucher
• Each petty cash voucher must include the date of payment, the name of the person requesting the payment, the amount claimed, a description of the expense, and the signatures of the payee and the petty cash custodian
✓ The amount of cash and vouchers in the petty cash must always add up to the amount of the original petty cash cheque
✓ When the amount of cash runs low, the receipts are added up and a new cheque is written to the petty cash fund and cashed
✓ The vouchers are expensed to the appropriate expense accounts in the accounting records
✓ The petty cash fund is reconciled regularly, and the reconciliation form includes a list of the vouchers, the cash on hand and the total of the fund
✓ The petty cash fund is checked regularly by a person other than the custodian to ensure that the funds are being properly managed
*Refer to the Appendix of this handbook for a Terms and Conditions for Use of Petty Cash Policy
PREAUTHORIZED TRANSACTIONS
(N/A: Centre does not have preauthorized transactions)
ABC Childcare Centre has established preauthorized transactions according to the following conditions:
✓ Prior approval has been obtained from the Board for all transactions through direct deposits, direct withdrawals and credit cards
✓ Signed documents for direct deposits and/or direct withdrawals are kept on file
✓ All parent fees are deposited into the Centre’s bank accounts
✓ All payments from municipalities and government agencies are deposited into the Centre’s bank accounts
✓ Supporting documents for direct deposits (i.e. parent fees) and/or direct withdrawals (i.e. invoices and billings) are kept on file to verify all transactions recorded on the bank statements
DEPOSITS (CASH AND CHEQUES)
All forms of payment (both cash and cheque), are recorded and deposited into ABC Childcare Centre’s bank account on a regular basis, as the money is collected.
If funds are received, and they cannot be deposited into the bank account daily, ABC Childcare Centre places these payments in a locked, fireproof and secure location.
Complete detailed records of payments received are maintained to ensure that receipts can be traced to provide adequate information and to ensure that all receipts are properly credited to the relevant accounts.
All cheques received as payment, will be stamped immediately upon receipt as `For Deposit Only to ABC Childcare Centre’.
Deposit Books...
The deposit book that is obtained from the bank will include duplicate forms. The original copy of the deposit will be kept by the bank, and the duplicate copy will be retained by ABC Childcare Centre for the records (the duplicate copy will remain attached to the deposit book).
The authorized person depositing the funds into the bank account for ABC Childcare Centre will ensure that the bank stamps the duplicate deposit form whenever a deposit is made into the account.
When the deposit slip is prepared, the following information will appear in the appropriate spaces:
✓ Date
✓ Account number
✓ Name of the Centre
✓ Separate list of the cheques being deposited showing the payer’s name
✓ Breakdown of the cash being deposited
✓ Signature of the authorized person making the deposit
✓ Receipt number
Cash Receipts Journal...
The Cash Receipts Journal for ABC Childcare Centre is organized so that a record of all funds the Centre receives is kept in a simple and easily accessible manner.
✓ The first column is used to record the date of each deposit — this should correspond with the date on the actual deposit slip
✓ The second column records the source of the funds — each source will be shown separately
✓ The third column is for the individual receipt number
✓ The distribution columns appear next and are intended to record a particular type of income (i.e. grants, donations, etc.) — the amounts entered in these columns will correspond with the amounts entered in the last column
✓ The actual amount of monies deposited are recorded in the last column (bank column) — this amount will correspond with the amount shown on the deposit slip
✓ At the end of the month, the distribution columns and the bank column are added, and the totals are entered as noted in the journal
✓ The totals of the distribution columns will be the same as the total of the bank column (cross-adding)
* If the journal does not cross-add, the following steps will be used:
✓ Addition of the distribution and sundry columns will be double-checked
✓ Cross-additions of each line will be double-checked
✓ Once these items have been double-checked and any required correction made, the journal should cross-add
CHEQUE SIGNING
Cheque Disbursements Journal...
The Cheque Disbursements Journal for ABC Childcare Centre is organized so that all of the accounting information relating to purchases and payments of expenses is readily available — this journal, like all other accounting journals, is prepared on a monthly basis.
✓ The first column of the journal is used to record the date that each cheque is written — it should correspond with the date on the actual cheque
✓ The second column records the name of the payee — the person or organization to whom the cheque is payable
✓ The third column is for the number of each cheque -all cheques are assigned a number and they are entered in numerical sequences; if a cheque needs to be cancelled for any reason, the cheque number still needs to be accounted for
✓ The fourth column, or the bank column, records the actual amount of the payment by cheque — this amount corresponds with the amount on the cheque itself
✓ The distribution columns appear next and are used to record the type of expenditure for which the cheque was written — these columns are used for the most common expenditures of ABC Childcare Centre (Note: when the distribution columns are added, they will equal the amount in the bank column)
✓ The final column is the ‘sundry’ column and is used to record or explain specific types of expenditures that are not usually made more than once a month — this includes the reason for the disbursement and the amount
✓ At the end of the month, all of the entries of the distribution columns and the `sundry’ column are added and the totals are placed at the bottom of the page — these totals will agree with the total of the bank column (also known as `cross-adding’)
* If the journal does not cross-add, the following steps will be used:
✓ Addition of the distribution and sundry columns will be double-checked
✓ Cross-additions of each line will be double-checked
✓ Once these items have been double-checked and any required correction made, the journal should cross-add
The Cheque Book...
The left part of each page of the cheque book is the stub that remains in the cheque book after the cheque has been removed. The cheque stub is completed in full each time a cheque is written, with the following information:
✓ Cheque number
✓ Date of issue
✓ To whom the cheque was issued
✓ Amount of the cheque
✓ A brief description of the purpose of the payment
✓ In order to know the amount of money on deposit in the bank account, the Treasurer will keeping a running balance on the cheque stub.
✓ When the account is first opened, the first deposit is recorded on the first cheque stub in the cheque book; after this, the amount of every cheque is written on the appropriate stub and subtracted from the previous balance — likewise, all deposits are entered and added
Preparing and Signing the Cheque...
When a cheque is written, it will be filled out completely before it is signed, and it will include:
✓ The cheque number
✓ The date (always ensure that the year is also correct!)
✓ The full name of the payee (the person or the organization receiving the cheque)
✓ The amount of the cheque both in figures and words; the two will agree
* Cheques are not made out to cash, only to persons or organizations that require payment and that have supporting documentation.
The Board of Directors will vote and assign individuals as signing officers for banking purposes for a certain period of time (usually a one year term). All documents relating to this assignment will be kept on file, as well as a copy of the authorization of the signing officers to each bank or financial institution that ABC Childcare Centre deals with.
All cheques require signatures of two signing officers.
The signing officers for ABC Childcare Centre will not sign a cheque until it contains all of the above information. The signing officers will not sign a quantity of blank cheques, as this destroys the entire purpose of having more than one signature on a cheque.
The signing officers will only sign a cheque once the invoice or voucher for which the payment is being made, has been seen and verified. After the cheque is signed, the Treasurer will record the cheque number and the date of the cheque on the invoice or voucher.
Occasionally the Treasurer will prepare a cheque that ends up not being issued or one that is returned without being cashed by the payee (this could occur because of a misspelling, the insertion of a wrong amount, or a later decision not to make the payment). Whether this happens before or after the cheque is signed, the cheque will not be destroyed. The Treasurer will write `VOID’ across the cheque and on the cheque stub (in ink) and will remove the signature block of the cheque. The cheque will then be filed with the cancelled cheques and bank statement.
If a cheque is cancelled or lost after issuance to the payee, ABC Childcare Centre will immediately issue a stop payment at the bank following the appropriate procedures as directed by the bank. A replacement cheque will not be issued until written notification from the bank is received that the stop payment is in effect. The replacement cheque will be issued with the following notation on the back: `To replace cheque number...presumed lost or destroyed which is to be returned to ABC Childcare Centre un-cashed should it come into the possession of the payee’. A credit will be prepared in accordance with policies and guidelines for reversing the entry for the original cheque and posting the entry for the replacement cheque.
Outstanding Cheques...
ABC Childcare Centre will review the monthly list of outstanding cheques. All cheques outstanding for more than six (6) months will be deemed stale-dated, and will be reversed.
BANK ACCOUNTS RECONCILIATION
ABC Childcare Centre reconciles the bank statement monthly to identify any errors or omissions in either the bank’s or the Centre’s records. Bank account reconciliations also help to keep track of the true bank balance at all times.
The monthly bank reconciliation will be prepared by a designated individual (usually the bookkeeper) other than the individuals responsible for deposits to the bank account, and with cheque signing authority. Once the bank account has been reconciled, the bank statement will be reviewed and signed by the individual completing the reconciliation.
Any imbalances in the bank reconciliation will be reported immediately to the Board of Directors.
The individual completing the reconciliation will seek assistance from both the Board of Directors and the Treasurer (and the Finance Committee where applicable) if the imbalance cannot be reconciled.
In the event that bank reconciliation differences cannot be resolved by the following month, the Board of Directors will, considering the recommendation of the individual completing the reconciliation and the Treasurer (and the Finance Committee where applicable), write-off the difference to the appropriate account.
Reconciling the Bank Account...
✓ Obtain the monthly bank statement and cancelled cheques (either by picking them up at the bank in person or having them mailed to the Centre)
✓ Check the cancelled cheques against the statement by using a tick (v) mark on the statement — circle any debit item on the bank statement that does not have a corresponding cheque
✓ Put the cancelled cheques in numerical order
✓ Tick off the entries in the Cheque Disbursements Journal against the cancelled cheques — mark outstanding (o/s) beside the amount in the `bank’ column for any item in the Cheque Disbursements Journal not yet cashed by the bank
✓ Enter in the Cheque Disbursements Journal any circled debit items from the bank statement that were not previously recorded, including such items as the monthly bank charged
✓ Circle bank deposits recorded on the statement against the Cash Receipts Journal — mark any outstanding (o/s) items in the Cash Receipts Journal beside the amount in the bank column; enter any credit items on the bank statement that were not previously written in the Cash Receipts Journal
Completing the Reconciliation...
✓ Enter the final bank balance recorded on the statement
✓ List the outstanding deposits from the Cash Receipts Journal; add them together
✓ List the outstanding cheques from the Cash Disbursements Journal; add them together
✓ Subtract the outstanding cheques to arrive at the adjusted balance
✓ Enter the previous month’s adjusted balance
✓ Add the total bank column from the Cash Receipts Journal
✓ Subtract the total bank column from the Cash Disbursements Journal
✓ The balance should agree with the total arrived at in the last step above; if not, double-check all previous steps for accuracy
PAYROLL
TD1s
The TD1 (Personal Tax Credits Return) is a form that must be completed by all employees of ABC Childcare Centre and maintained in each employee file.
There are two types of TD1 forms available from the Canada Revenue Agency that must be completed by every employee of ABC Childcare Centre:
✓ Federal TD1
✓ Provincial TD1
The TD1 form is used by ABC Childcare Centre to determine the amount of federal and provincial tax to be deducted from an individual’s employment income.
Who Should Complete This Form?
Individuals who have a new employer or payer have to complete the federal TD1 and, if more than the basic personal amount is to be claimed, the provincial TD1.
Individuals do not have to complete a new TD1 every year unless there is a change in their entitlements to their federal or provincial personal tax credit amounts. If a change occurs, they must complete a new form, no later than seven (7) days after the change.
It is a serious offence to knowingly accept a TD1 that contains false or deceptive statements. If it is suspected that a TD1 form contains incorrect information, contact the Canada Revenue Agency by telephone at 1.800.959.5525
If the individual does not complete the TD1 forms, the Centre is still responsible for deducting taxes, allowing the basic personal amount only.
Which Form Should Be Used?
In addition to completing the Federal TD1:
✓ Employees who claim more than the basic personal amount have to complete the TD1 that corresponds to their province of employment.
TERMS OF EMPLOYMENT
When a new staff member is hired by ABC Childcare Centre, they will be given a letter stating the terms of employment, a job description, as well as a copy of both the Personnel and Parent handbooks.
No person will qualify as an employee until they read, understand and sign all of the required documents, including the letter of acceptance of the terms and conditions of the offer.
These signed documents will be kept in each employee’s file for the duration of their employment.
Employment contracts or letter of employment will include:
✓ Terms and conditions of the employment
• Including starting date, hours of work, vacation entitlement, sickness entitlement, R.E.C.E. membership in good standing in the Ontario College of Early Childhood, disciplinary procedures, termination of employment and date of termination of contract (where applicable)
✓ Job title and job description
✓ Gross salary (base salary plus applicable grants)
✓ Signatures of both the Supervisor (or a Board of Directors member) and the employee
✓ Date the contract or employment letter was signed by both the Supervisor (or a Board of Directors member) and employee
✓ Benefits (will only be addressed if applicable to the Centre)
• May include Group Life, extended Health, Dental, RRSP, pension and vacation
✓ Written documentation of wage grants allocations and schedule of payments provided to staff (will only be addressed if applicable to the Centre)
✓ Directors of the Board should serve without remuneration (will only be addressed if applicable to the Centre)
*Refer to the Appendix of this handbook for a Sample Employment Contract
Termination of Contracts of Employment...
An employee who wishes to terminate a contract of employment will do so in writing and provide as much advance notice as is possible, preferably no less than one month’s notice. Such notice will be provided to the Board.
The Board may terminate an employee’s contract of employment with proper notification of termination or for just cause as set out in the Employment Standards Act.
Grounds for Immediate Dismissal or Suspension...
ABC Childcare Centre may immediately dismiss, suspend or put an employee on probation for serious breaches of trust or serious incidents of misconduct. Serious breaches of trust and serious incidents of misconduct include but are not exclusively restricted to the following:
✓ theft of the employer’s property
✓ falsification of records
✓ falsification of employment application information
✓ conduct containing elements of criminal behaviour
✓ violence
✓ conflict of interest situations wherein the employee uses her/his position, or ABC Childcare Centre’s name, goods or services, for personal gain, without the knowledge of the employer
✓ inappropriate and/or unprofessional conduct with a client, staff member, Board member or volunteer
If it is necessary in the opinion of the Board to reduce the size of the Centre through restructuring, one or more employees may be laid off during the term of their contract of employment. The Board will endeavour to give as much notice of a layoff as possible to all affected employees. Notice with pay will be granted as defined by the Employment Standards Act. The reduction in an employee’s hours of work will be deemed a layoff.
RECORD OF EMPLOYMENT
The Record of Employment (ROE) is the single most important document in Employment Insurance (EI). Service Canada uses the information on the ROE to determine whether a person qualifies for EI benefits, the benefit rate and the duration of his/her claim. The ROE also plays an important role in controlling the misuse of EI funds. A ROE must be issued even if the employee has no intention of filing a claim for EI benefits.
A ROE must generally be issued within five (5) calendar days of the interruption of earnings or the date the employer becomes aware of the interruption.
An interruption occurs when an employee quits their job; is laid off or terminated; has had or is anticipated to have seven (7) consecutive calendar days without both work and insurable earnings from ABC Childcare Centre. An interruption of earnings also occurs when the salary falls below 60% of normal weekly earnings due to illness, injury, quarantine, pregnancy, the need for a parent to care for either newly born or adopted children, or the need to provide care or support to a family member who is gravely ill with a significant risk of death.
All outstanding salaries and benefits calculated according to the employment contract or the Employment Standards Act will be paid out in the pay period following termination. In the event of a situation where negotiation is involved, outstanding payments are paid out according to the settlement agreement.
A copy of the ROE will be kept in the employee’s file in a secure location for a period of six (6) years as required by Service Canada.
Record of Employment (ROE) forms can be ordered by contacting Service Canada by telephone at 1.800.263.8364 and have the following information ready:
✓ Business or Employer Number (issued by the Canada Revenue Agency)
✓ ABC Childcare Centre’s name, telephone number and address
Forms will be mailed to the address given within five (5) business days.
PAYROLL INFORMATION
Access to the personnel records system of ABC Childcare Centre staff and Board of Directors members is controlled to assure the confidentiality, privacy and appropriate access to records and reliability of data.
The following information will be maintained in individual employee files for payroll purposes:
✓ Name of the employee
✓ Social Insurance Number (SIN)
✓ Annual Salary or Hourly Rate
✓ Standard hours per pay (full-time or part-time)
✓ Earnings per pay and year-to-date figures
✓ Deductions per pay and year-to-date figures
✓ Method of payment (cheque or direct deposit)
✓ Frequency of payment (weekly, bi-weekly, semi-monthly, etc.)
Details or earnings and deductions for each pay period are provided to employees on the pay stubs that include:
✓ Gross earning
✓ Deduction
✓ Net earning
✓ Number of hours worked
✓ Hourly rate or rate of pay
T4s
T4 records must be completed for all individuals who received remuneration from ABC Childcare Centre during the year if:
✓ CPP Contributions, EI Premiums or income tax were deducted from remuneration
✓ The remuneration was more than $500
A T4 record must be completed to report:
✓ Salary, wages (including pay in lieu of termination notice), tips or gratuities, bonuses, vacation pay, employment commissions, and all other remuneration paid to employees during the year
✓ Taxable benefits or allowances
✓ Deductions withheld during the year
✓ Pension adjustment (PA) amounts for employees who accrued a benefit for the year under your registered pension plan (RPP) or deferred profit sharing plan (DPSP) (if applicable)
ABC Childcare Centre will prepare and distribute T4 records to employees on or before the last day of February following the calendar year to which the information applies, as follows:
✓ Two (2) copies, sent by mail to the last known address;
✓ Two (2) copies, delivered in person; or
✓ One (1) copy distributed electronically (i.e. by email), if the employee’s consent has been obtained in writing or electronic format
✓ The two (2) T4 slips that have to be distributed to each employee should be printed on one sheet — for security purposes, do not print the Payroll Account Number (box 54) on these copies.
Copies of each employee’s T4 record will also be available at ABC Childcare Centre for review.
The required copies of the T4 records will also be submitted to the Canada Revenue Agency by ABC Childcare Centre on or before the last day of February following the calendar year to which the information applies.
The T4 Summary...
ABC Childcare Centre is also required to prepare and submit to the Canada Revenue Agency a separate T4 Summary for each payroll account, on or before the last day of February following the calendar year to which the information applies. . The totals that are reported on the T4 Summary must agree with the totals reported on the T4 slips — errors or omissions can cause unnecessary processing delays.
Guidelines to Completing T4 Records...
✓ Complete the T4 records clearly and in alphabetical order
✓ Use a standard 10- or 12- character-per-inch font if type or computer-generated
✓ Report, in dollars and cents, all amounts paid during the year, except pension adjustment amounts, which are reported in dollars only
✓ Report all amounts in Canadian dollars, even if they were paid in another currency
✓ Do not enter hyphens or dashes between numbers or names
✓ Do not enter the dollar sign ($)
✓ Do not show negative dollar amounts on records; to make changes to previous years, send amended records for the years in question to the Canada Revenue Agency
✓ If an amount does not have to be entered into a box, do not enter `nil’; leave the box blank
✓ Do not change the headings of any of the boxes
PAYROLL RELATED REMITTANCES
ABC Childcare Centre is required to submit payroll related remittances to the appropriate government agencies or institutions as required on a timely basis.
Remittances can be made by electronic payment, at a financial institution or by mail.
Penalties and Interest...
If CPP, EI or Income Tax are not deducted from payroll amounts, a penalty of 10% of the required amount that was to be deducted can be assessed. If ABC Childcare Centre is subject to this penalty more than once in a calendar year, the penalty can be raised to 20% for the second or later failure if they were made knowingly or under circumstances of gross negligence.
If a payment is not remitted or is late, a penalty of up to 20% of the amount that was not remitted can be assessed when:
✓ The amounts were deducted from payroll amounts, but not remitted; or
✓ The amounts deducted were received after the due date
If a remittance due date falls on a Saturday, a Sunday or a public holiday, the remittance is due on the next business day.
The penalty for remitting late is:
✓ 3% if the amount is one (1) to three (3) days late;
✓ 5% if the amount is four (4) or five (5) days late;
✓ 7% if the amount is six (6) or seven (7) days late; and
✓ 10% if the amount is more than seven (7) days late or if no amount is remitted
Generally, the penalty is only applied to the part of the amount that is more than $500, however, a penalty can be applied to the total amount if the failure was made knowingly or under circumstances of gross negligence.
If ABC Childcare Centre is subject to this penalty more than once in a calendar year, a penalty of 20% can be assessed on the second or later failure if they were made knowingly or under circumstances of gross negligence.
*A penalty is applied to a non-sufficient funds (NSF) cheque
If an amount is not remitted, interest may be applied from the day that the payment was due using prescribed interest rates — interest is compounded daily. Interest may also be applied to unpaid penalties.
Notice of Assessment...
If a Notice of Assessment is received, only the remittance form attached to the notice can be used to make the payment.
Statement of Account and Remittances...
The Statement of Account verifies that Income Tax, Canada Pension Plan (CPP) and Employment Insurance (EI) have been remitted to the Canada Revenue Agency.
Canada Pension Plan (CPP)...
For Canada Pension Plan (CPP) purposes, contributions are not calculated from the first dollar of pensionable earnings. Contributions are calculated using the amount of pensionable earnings less an exempt amount that is based on the period of employment. CPP contributions must be deducted from an employee’s pensionable earnings if the employee:
✓ Is eighteen (18) or older, but younger than seventy (70)
✓ Is in pensionable employment during the year; and
✓ Does not receive a CPP retirement or disability pension
Note: CPP deductions must start effective the first pay dated on or after the first of the month following the employee’s eighteenth (18th) birthday.
Employment Insurance (EI)...
Employment Insurance (EI) premiums must be deducted from an employee’s insurable earnings if that employee is in insurable employment during the year — there is no age limit for deducting EI premiums. ABC Childcare Centre is required to deduct EI premiums from each dollar of insurable earnings up to the yearly maximum. After the maximum amount for the year has been deducted, no additional premiums should be deducted, even though the excess remuneration is still considered insurable.
Income Tax...
As an employer, ABC Childcare Centre is responsible for deducting income tax from the remuneration or other income that is paid — there is no age limit for deducting income tax and there is no employer contribution required. TD1 forms (federal and provincial) have been devised to assist in the determination of the amount of income tax to be deducted from an individual’s income for the year.
Determining ABC Childcare Centre’s Remittance Frequency...
The Average Monthly Withholding Amount (AMWA) of two calendar years ago determines the type of remitter:
a) If a Centre’s AMWA two years ago was less than $15,000, it may remit monthly as a Regular Remitter. The payment due date is on or before the 15th day of the month following the month the deductions were made.
b) If a Centre’s AMWA two years ago was less than $3,000 and has a perfect compliance history, it may remit quarterly as a Quarterly Remitter. The payment due dates are: April 15, July 15, October 15 and January 15.
c) If a Centre’s AMWA two years ago was less than $50,000 and more than $15,000, it may remit twice a month as an Accelerated Remitter Threshold 1. The payment due dates for the amounts deducted in the first 15 days is the 25th of the same month; for the amount deducted from the 16th to the end of the month is the 10th of the following month.
d) If a Centre’s AMWA two years ago was more than $50,000, it is considered an Accelerated Remitter Threshold 2. The payment due date for the amount deducted during the month is by the third working day following the deduction.
Statement of Account and Employer Health Tax (EHT)...
The Statement of Account verifies that Employer Health Tax has been remitted to the Ontario Government
a) If a Centre’s annual payroll is less than $400,000, it does not need to pay EHT
b) If a Centre’s annual payroll is less than $600,000, payment due date is March 15 of the following year
c) If a Centre’s annual payroll is more than $600,000, monthly payment is required
Employee Pension Statement...
The Employee Pension Statement verifies employee contributions have been remitted to the financial institutions (will only be addressed if applicable to the Centre).
Employee Insurance Statement...
The Employee Insurance Statement verifies employee contributions have been remitted to the insurance carriers (i.e. Health Benefits, LTD, RSP’s) (will only be addressed if applicable to the Centre).
WAGE GRANTS
(N/A: Centre does not receive wage grants funding)
Wage Subsidy Grants are used by ABC Childcare Centre to improve the salaries and non-mandatory benefits of the childcare staff, to enhance staff stability and to make childcare more affordable for all parents.
ABC Childcare Centre ensures that records are maintained for all wage grants received, documenting payments to staff members, and any outstanding balances.
ABC Childcare Centre ensures that each employee receives a reasonable portion of the Wage Subsidy, and that such distributions are in accordance with the Wage Subsidy Policy and Guidelines for Service Providers. Each employee will receive written communication from the Centre regarding the amount of salary and/or benefit coverage by the Wage Subsidy and the method that was used to determine each employee’s share. Copies of all such communication will be kept on file and will be made available upon request.
In the event, a collective agreement precludes increasing payment to staff, or other such exceptional circumstances exist, non-salary use of Wage Subsidy funding may be approved by the municipality or province. A portion of the subsidy may be used for non-salary purposes such as staff training or to increase affordability by reducing fees to parents, with prior approval to the municipality or province.
There are two types of Wage Subsidy funding that ABC Childcare Centre may be eligible for:
✓ Wage Subsidy Grants may be eligible for the following positions:
• Trained and untrained program staff
• Supervisors and administrators (depending on the size of the program)
• Resource teachers
• Clerical staff
• Cooks
• Housekeeping and janitorial staff that are employed by ABC Childcare Centre
✓ Wage Improvement Grants may be eligible for the following positions (eligible staff must work directly with the children):
• Trained staff
• Supervisors
• Early Childhood Educators (ECE) or Director approved program staff
• Resource teachers
• Untrained program assistants and program staff with incomplete training
Only full- and part-time staff members that are part of the Centre’s regular staffing complement are eligible for Wage Improvement Grants — supply staff do not qualify for grant funding.
Wage Improvements Grants are distributed to staff in accordance with the approved Wage Scale and Implementation Plan.
Reporting Procedures...
ABC Childcare Centre must, in writing:
✓ Report immediately any downsizing or plans to downsize or to close the Centre
✓ Report any changes in staffing levels and/or service levels
✓ Reports any changes in ownership or Board of Directors
✓ Report any changes in Supervisors
Failure to comply with reporting requirements may result in suspension or withdrawal of future Wage Subsidy payments. If there is reason to suspect the Centre has failed to provide the negotiated service level, failed to notify the municipality or province of any reduction in permanent staff or has reported more staff than is actually employed in the Centre, steps will be taken to recover any payments for which the Centre was not eligible.
ABC Childcare Centre ensures that Pay Equity Grants are distributed to staff in accordance with the Pay Equity Guidelines.
PURCHASING AND ACCOUNTS PAYABLE
PURCHASING
ABC Childcare Centre acknowledges that significant purchases may be required and therefore appropriate policies and procedures have been established for these situations.
All significant purchases must be planned in advance and require pre-approval from the Board of Directors.
Before approval will be granted for significant purchases, the Board of Directors requires that more than one (1) quotation be obtained, and that all of the necessary research has been completed.
To avoid potential conflict of interest situations, staff and Board of Directors members, officers and persons related to Directors or officers shall not sell goods, material or services to ABC Childcare Centre.
An exception may be made, with approval of the Supervisor and/or the Board, to secure services from an employee outside their regular hours of employment in an area unrelated to their regular employment, on a fee for service basis. Any such arrangements shall meet the test of being available on an equal basis to others, and the amount of compensation shall be modest, appropriate to the circumstances, and below the cost of such services in the market (this must be demonstrated by obtaining at least three (3) quotations from unrelated goods and services providers). Special arrangements shall also be permitted in the case of fundraising activities on behalf of the Centre.
Another exception may be made, with approval of the Supervisor and/or the Board, to secure goods and services from a Director, officer, staff member, or person related to a Director or officer of ABC Childcare Centre when the goods and service is the only source available within a reasonable distance of the Centre.
*Refer to the Appendix of this handbook for a Sample Conflict of Interest Policy
THIRD PARTY CONTRACTED SERVICES AGREEMENT
ABC Childcare Centre requires that a written agreement be signed by all parties involved for third party services, before any services are provided. Third party services may include, but are not limited to:
✓ Auditing
✓ Bookkeeping
✓ Food catering
✓ Major renovations
✓ Supply Staff from outside agencies
✓ Leases and/or rental agreements
✓ Loan and/or borrowing agreements
VENDOR INVOICE
ABC Childcare Centre verifies all invoices against the goods and services received (i.e. packing slip) before payment will be issued to vendors.
All vendor invoices submitted for payment from ABC Childcare Centre must include:
✓ Vendor name, address and telephone number
✓ Amount due
✓ Invoice date
✓ Invoice number
✓ Description of the goods and services provided
✓ Price per unit and number of units received
✓ GST number (if applicable)
Accounts Payable and Vendor Invoices...
All unpaid invoices of ABC Childcare Centre are filed separately and reviewed with the intention of taking advantage of any discounts offered by the vendor for earlier payments.
ABC Childcare Centre monitors credits due for items that were not shipped by the supplier or that are back-ordered.
Invoices are paid when they become due, ensuring that there is adequate cash in the bank account to meet the cheque amount. As the cheque is being prepared, the amount of the payment is allocated to the correct account.
ABC Childcare Centre has safeguards in place to avoid duplicate payments being issued for invoices already paid:
✓ Invoices that have had payment issued for them are marked `PAID’
✓ Paid invoices are filed separately from unpaid invoices to avoid double
REVENUE AND ACCOUNTS RECEIVABLE
ATTENDANCE
ABC Childcare Centre maintains accurate records of the daily attendance of each enrolled child. Arrival, departure or absence of each child is shown in the daily attendance record.
ABC Childcare Centre keeps all children’s attendance records on file for a minimum of two (2) years.
✓ Child attendance records will reconcile with the information submitted on the municipal Enrolment Register monthly for paper reporting, or
✓ Child attendance records will reconcile with the information submitted on the municipal; Attendance Report monthly for online reporting
FEE RECORDS
ABC Childcare Centre maintains accurate records for Parent Fees for each child enrolled in the Centre. Individual Parent Fee records include:
✓ Name of the child and the name of the parent
✓ Age group
✓ Amount that is owed for the month
✓ Amount that is paid in the month
✓ Balance owing at the end of the month
ABC Childcare Centre will collect childcare fees in a consistent, equitable manner to ensure the financial viability of the Centre.
Parent Fees are due on the first day of each month for that month, and there are no deductions for absences or statutory holidays. Invoices for fees due will be issued to parents and/or guardians for each month, and receipts will be issued for payments received by ABC Childcare Centre.
A two-week fee deposit is required when child(ren) are enrolled in ABC Childcare Centre. The fee deposit will be applied to the fees for the last two (2) weeks that the child(ren) are enrolled in the Centre, providing that a two-week notice of withdrawal is given.
The monthly fee is set by the Board of Directors and is renewed annually. Parents and/or guardians are responsible for paying the full monthly fee unless a childcare fee subsidy is obtained from the municipality.
If a fee subsidy is obtained from the municipality, the monthly fee paid by the family is based on the assessed daily fee contribution. Parents and/or guardians are responsible for fulfilling the entire requirement of the municipality necessary to maintain the subsidy. If parents and/or guardians become ineligible for the childcare subsidy, they are responsible for paying the full monthly fee or for withdrawing the child(ren).
Annual tax receipts will be issued to parents and/or guardians on or before the last day of February following the calendar year to which the information applies.
PARENT FEE RECONCILIATION
ABC Childcare Centre reconciles the Parent Fee records every month with the following records to ensure accuracy:
✓ Centre’s attendance records
✓ Municipal enrolment records
✓ Centre’s invoices
✓ Municipal invoice (if applicable)
Parent Fess will be reconciled monthly to ensure that they are collected and that fees are deposited.
The Board of Directors will be notified of any discrepancies. All discrepancies will be documented and be resolved immediately.
OUTSTANDING PARENT FEE
ABC Childcare Centre will collect childcare fees in a consistent, equitable manner to ensure the financial viability of the Centre.
Parents and/or guardians of ABC Childcare Centre who are late paying their fees will be charged a penalty of __________.
All Parent Fees that are outstanding at the end of each month will be followed up, and if necessary alternative arrangements for payments will be made. Any alternative arrangements that have been made for late payments between ABC Childcare Centre and parents and/or guardians will be documented and signed by both parties. All signed alternative payment arrangement documents will be kept on file and reviewed regularly.
All alternative payment arrangements will be communicated with the Treasurer.
NSF CHEQUES
ABC Childcare Centre is charged an administration fee of $_________ from the bank for all non-sufficient funds (NSF) cheques.
In the event that an NSF cheque is provided to the Centre from a parent and/or guardian, they will be notified and asked to pay the administration fee along with the money owed.
All cheques returned from the bank require replacement by certified cheque, money order, or cash (cash payments will be discouraged).
If two (2) consecutive cheques are returned from the bank, all future payments must be made by certified cheque, money order or cash.
OTHER RECEIVABLES
ABC Childcare Centre receives funding from many sources (municipal, provincial and federal government) and occasionally amounts become overdue. These Accounts Receivable amounts are monitored and followed up monthly.
The Board of Directors will be notified of any discrepancies and delays in payments. All discrepancies and delays will be documented and followed up with monthly.
INVENTORY AND ASSETS
INVENTORY AND ASSETS
ABC Childcare Centre maintains accurate and up-to-date records of all assets and inventory on hand. A comprehensive list of contents will not only provide the Centre with an asset register, it will also assist in the resolution of insurance claims, and is one of the most important steps in the preparation of financial statements.
ABC Childcare Centre ensures that all assets and inventory are safeguarded, and are used only for the purpose of conducting business.
ABC Childcare Centre amortizes all capital assets, and maintains records of the amortization process (amortization is the spreading of a large expenditure proportionately over a fixed period of time (usually over the period of their useful life)).
During the updating of records, ABC Childcare Centre only relies on physical counting of all inventory and assets on hand, to ensure that the most accurate information is used.
FINANCIAL REPORTS
AUDITS AND AUDITED FINANCIAL STATEMENTS
ABC Childcare Centre maintains records of the financial activities and these generally include documents such as:
✓ Expense statements or reports
✓ Budget statements
✓ Accounts payable and accounts receivable reports
✓ Bank statements and reconciliation reports
✓ Cash flow statement
✓ Income statement
✓ Balance sheet
These financial documents are usually reviewed by the Board of Directors on a monthly basis or quarterly, and are part of their governing work.
Audited financial statements are financial statements that have been reviewed by an external certified accountant. This review process is completed in accordance with Generally Accepted Accounting Principles (GAAP). These statements and the auditor’s report are presented to the members of the Centre at the Annual General Meeting (AGM). The auditor’s report gives the opinion as to whether the financial statements fairly reflect the financial picture of the Centre for a particular period and at a particular point in time, usually the year-end.
Audited Financial Statements for ABC Childcare Centre that are submitted to the municipality within four (4) months after the Centre’s fiscal year end include:
✓ Signature of the auditor
✓ Signatures of the two (2) signing officers of the Centre
✓ Breakdown of Revenue and Expenses for each program and/or each location that received funding from the municipality or province (will only be addressed if applicable to the Centre)
✓ Breakdown of Administrative Expenses or other expenses allocated to each program and each location for a multi-service Centre and/or programs (will only be addressed if applicable to the Centre)
✓ Special purpose report for programs that received wage grants (will only be addressed if applicable to the Centre)
ABC Childcare Centre must submit annual financial statements. Audited financial statements must be submitted for Centres that have received $30,000 or more in fee subsidy during one calendar year, or received $20,000 or more in wage grants annually.
For Special Needs and Family Support Programs, Centres are required to submit audited financial statements annually. Audited financial statements must be submitted within 4 months after the fiscal year end.
Who is Required to Complete an Audit?
There are several thresholds that apply to co-operatives seeking an exemption from the audit provisions of the Co-operative Corporations Act. The most basic is found in Section 123 (2) of the Act and states that a `co-operative that has never issued securities and that at the end of a financial year has less than $5,000 in capital and less than $5,000 in assets’ is exempt from having to do an audit.
Even if a co-operative does not meet the exemption conditions outlined above, there are other exemption conditions that may allow them to forgo the preparation of audited financial statements. These exemptions are found in Sections 123(1) and (1.1) of the Act (for more information contact the Ontario Co-operative Association info@ontario.coop or )
Who Can Be an Auditor?
An auditor is a qualified person that is independent of ABC Childcare Centre. It is usually a Certified Chartered Accountant, Public Accountant or an accounting firm. Current employees or Board members cannot be auditors, nor can former Directors or employees be auditors if they occupied that position in the two years preceding the audit. Firms or individuals that conduct a material amount of business with the Centre also cannot be auditors.
How is the Auditor Appointed?
Auditors are appointed by the membership as part of the AGM, and the auditor holds office until the next AGM or until a time in which the auditor must be removed for specific situations during the course of the year. In the case of removing an auditor from their position, a vote by the membership must be completed and the auditor must be given 15 days notice so that they may make an appeal to the membership in person. The membership can also choose to change auditors by appointing a new auditor at the AGM but the auditor must be given written notice of this intention.
FINANCIAL REPORTS
ABC Childcare Centre prepares financial statements for the Centre on a monthly (sometimes, quarterly) basis. These financial statements will include a comparison of actual amounts to the budget to identify any variances.
The financial statements are provided to the Board of Directors, who review and approve them monthly. Any discrepancies or questions from the review will be answered after consultation with the accountant (or bookkeeper) by the following Board meeting.
The Board of Directors uses the financial information for decision making on behalf ABC Childcare Centre.
Additional reports for Special Needs and Family Support Programs:
✓ Quarterly Year-to-Date reports include Financial Data, Service Data and Variance Reports if applicable
✓ Distribution of labour costs to Special Needs and Family Support Programs correspond to the actual hours staff worked in the programs funded by Children’s Services
| Types of Financial Reports | Purpose |
|
|Financial Pressures List | Identifies and quantifies current and future pressures, |
| |identifies actions required and monitors status |
|
|Statement of Revenue and Expenses | Reports actual spending against the budget, and identifies |
| |variance and provides explanations |
|
|Balance Sheet | Identifies the assets and liabilities of the Centre |
|
|Income Statement | Identifies how much money was earned (revenue) and how much money|
| |was spent (expenses) over a specific period of time |
|
APPENDIX: POLICIES, PROCEDURES, TIPS AND FORMS
CODE OF ETHICS
As a member of ABC Childcare Centre’s Board of Directors and/or staff, I will;
✓ Work on behalf of the whole Centre representing all of the families
✓ Represent the interests of all of the members
✓ Come prepared to meetings to participate and be on time
✓ Understand my position and ask for an orientation session
✓ Work as a ‘trustee’ of ABC Childcare Centre and do my best to ensure that the Centre is financially secure and well managed
✓ Do nothing to violate the trust of those who elected me to the Board of Directors, or those who hired me to the staff of ABC Childcare Centre
✓ Not benefit directly or indirectly from serving on the Board of Directors, or as a member of the staff
✓ Declare if I do have a conflict of interest
✓ Avoid voting on issues that appear to be a conflict of interest
✓ Keep informed of developments that are relevant to issues that come before the Board
✓ Keep personal agendas off the Board table
✓ Take personal issues or concerns through appropriate communication channels
✓ Be responsible and proactive for ABC Childcare Centre’s behaviour and productivity
✓ Encourage everyone to participate
✓ Follow through on my commitment
✓ Focus not only on the present but on the future needs of the community and ABC Childcare Centre
✓ Ensure that confidentiality and non-disclosure of personal information is strictly adhered to
✓ Support the professional team but will not interfere with the management of staff
✓ Remember that all of the authority is vested in the whole Board when it meets the legal session and not individual Board members and/or staff members
✓ Never exercise authority as a Board and/or staff member expect when acting in a meeting with the full Board, or as I am delegated by the Board
✓ Respect and support the Board’s final decision, and speak as one voice
Dated at _______________ this _____________ day of ___________________, 20XX.
_________________________________________________
Signature
_________________________________________________
Name (please print)
CONFLICT OF INTEREST
ABC Childcare Centre employees, volunteers, students, Board of Directors members and families are obligated to act at all times in the best interest of the Centre. This obligation requires that any employee, volunteer, student or Board of Directors member, in performance of Centre duties, seek only the furtherance of the Centre’s mission. At all times, employees, volunteers, students and Board of Directors members are prohibited from using their position, title, and/or the Centre’s name or property for private profit or benefit.
‘Conflict of Interest’ occurs when an employee, volunteer, student or Board of Directors member...
✓ uses their official position for private gain
✓ gives preferential treatment to any entity or person in the conduct of official duties because of personal interest
✓ impedes or adversely affects the efficiency or economy of the Centre because of personal interest
✓ fails to act impartially in the conduct of official duties because of personal interest
✓ engages in conduct that could adversely affect the confidence of the public in integrity of the Centre
Conflicts of interest may be actual or potential.
A. Board of Directors members, employees, volunteers or students should never solicit nor accept gratuities, favours or anything of monetary value from vendors (this is not intended to preclude bona-fide Centre fundraising activities).
B. Families should neither solicit nor accept roles as vendors to provide fee-for-services or any type of exchange for services, unless permitted by the Board of Directors (this is not intended to preclude bona-fide Centre fundraising activities).
C. Board of Directors members, employees, volunteers or students of the Centre shall not participate in the selection, awards, or administration of a purchase or contract with a vendor, where to their knowledge, any of the following has a financial interest in that particular purchase or contract:
✓ the employee, volunteer, student or Board of Directors member
✓ any member of their immediate family
✓ their partner
✓ an organization in which any of the above is an officer, director or employee
✓ a person or an organization with whom any of the above individuals, is negotiating or has any arrangement concerning prospective employment
D. Employees of the Centre should not engage in private employment or render services for any person or corporation that has or may have business dealings with ABC Childcare Centre without written consent from the Supervisor/Board of Directors. Where an employee becomes involved in such private employment, the Supervisor/Board of Directors must be informed. The decision can then be made to allow the employee to continue with the activities in question, subject to specified terms and conditions, or prohibit any further involvement.
E. Any real or potential Conflict of Interest shall be disclosed to the Supervisor/Board of Directors by the person(s) concerned.
F. When a Conflict of Interest is relevant to a matter requiring action by the Board of Directors, the interested person(s) shall bring it to the attention of the Board of Directors and said person(s) shall not vote on the matter. In addition, the person(s) shall not participate in the final deliberation of decision regarding the matter under consideration and shall retire from the room during the vote by the Board of Directors, and when applicable, the membership. When there is a doubt as to whether a conflict exists, the matter shall be resolved by a vote of the Board of Directors, excluding the person(s) whose situation the doubt has arisen.
G. The official minutes of the Board of Directors meeting shall reflect that the Conflict of Interest was disclosed and the interested person(s) was (were) not present during the final discussion and vote and did not vote on the matter.
Dated at _______________ this ______________ day of ___________________, 20XX.
_________________________________ ____________________________
Signature Witness Signature
_________________________________ ____________________________
Name (please print) Witness Name (please print)
FRAUD AWARENESS TRAINING
Fraud awareness training is one of the main tenets of a fraud strategy. Educating Board of Directors and staff members in respect of what to look for and how fraud happens, empowers them to take the necessary action to mitigate the risk of it occurring or, when it does occur, address it in the correct way.
All Board and staff members will benefit from fraud awareness training. The more they are educated, the more eyes and ears you have to protect ABC Childcare Centre’s assets.
Experience has shown that one of the most common ways in which internal fraud or corruption is detected is by observation and reporting by workplace colleagues of the perpetrator(s). Similarly, the most likely way for externally instigated fraud or corruption to be detected is by an employee or Board member of the victim Centre — not by the internal or external auditors as many expect.
It is therefore important that every Board and staff member have a general awareness of fraud and corruption and how they should respond if this type of activity is detected or suspected.
ABC Childcare Centre should regularly communicate to staff and Board members a clear definition of the types of behaviour that constitute fraud or corruption, the fraud detection measures that are in place and an unequivocal statement that fraud and corruption within the Centre will not be tolerated.
The primary purpose of fraud training is to assist in the prevention and control of fraud by raising the general level of awareness amongst all employees and Board members. A significant proportion of fraud and corruption is not identified at an early stage because of the inability of the staff and Board members to recognize the warning signs, because they are unsure how to report their suspicions or they have a lack of confidence in the integrity of the reporting system or the investigation process.
Developing a Fraud and Corruption Plan
Fraud and corruption is more prevalent than most Board members realize — it can destroy a Centre’s reputation, shake membership confidence and result in civil and criminal prosecution. The impact of fraud upon a Centre can be devastating!
Good fraud governance requires more than just ensuring an effective system of internal controls. It requires:
✓ A strong and clear message from Board members and staff who are prepared to lead by example
✓ Clear policies and standards
✓ Knowledge of the key fraud risks
✓ Effective fraud and corruption reporting
✓ Awareness training
✓ The development of a strong culture of ethics and honesty
The performance of ABC Childcare Centre can be improved through a Centre-wide application of a fraud and corruption strategy that incorporates these elements!
SAFEGUARDS AGAINST THEFT
The Board of Directors is responsible for the financial well-being of ABC Childcare Centre, and by having safeguards in place, they can be confident that the information they receive is true.
These safeguards also protect the Treasurer from false accusations.
✓ Someone who is not a signing authority must carefully review each bank statement and verify that all cheques are enclosed, written and endorsed by the appropriate payee; the deposit amounts should correspond with the tuition collected, fundraising and any other receipts; if the signing authorities change to include the reviewer, be sure to appoint a new reviewer
✓ The President or a designee should open and review all mail before distributing it promptly to the appropriate person (all mail marked `Private’ or `Confidential’ will be delivered unopened to the appropriate person); even if the Treasurer is honest, they may not be paying all of the important bills; if the Treasurer is getting the mail, all that needs to be done is to throw the past due notices in the trash; payroll taxes seem to be susceptible to `forgetting’ and large fines can result
✓ All computerized records are backed up regularly; financial statements and other financial records are routinely printed, signed and dated
✓ Financial statements must be presented at each Board meeting; the financial statement should include payments made and income received by category, as well as the Centre’s overall financial condition; bank statements must be reconciled monthly
✓ The Treasurer’s report at Board meetings should mention, for the minutes, all tax forms filed; information about tuition and fundraising monies received should be provided with an explanation of any discrepancy from what was expected; fundraising amounts should match those delivered by the Fundraising Committee
✓ Avoid cash transactions; tuition should be paid by credit card, debit card, cheque or money order; if accepting cash is necessary, a receipt must be given immediately
✓ For proper record keeping, there should be no cash withdrawals; all withdrawals should be by cheque from the chequing account; savings accounts are used only to transfer funds to and from the chequing account
✓ Expense reimbursements require a signed and itemized cheque request form accompanied by receipts; reimbursements are made only at scheduled times
✓ Requiring two signatures on a cheque is a very good idea; but by requiring two signatures in the policies, a Treasurer must either forge a signature or submit a cheque that is easily identifiable as violating ABC Childcare Centre policies; having three or four signing authorities is helpful when the second signer is unavailable; NEVER sign blank cheques ahead of time!
✓ An annual financial review is mandatory; if a professional accountant is not available, a Committee of three people will also work; they randomly survey several months to ensure that all cheques and deposits are accounted for and that payroll records are in place, as well, they look for copies of all tax reports
SAMPLE BYLAWS
BE IT ENACTED AS A BYLAW OF ABC CHILDCARE CENTRE (hereinafter called `the Corporation) as follows:
1. HEAD OFFICE
2. SEAL
3. MEMBERS
4. FEES
5. RESIGNATION AND TERMINATION
6. ANNUAL MEETING
7. GENERAL MEETING
8. NOTICE
9. VOTING
10. ADJOURNMENT
11. QUORUM OF GENERAL MEETINGS
12. POWERS
13. NUMBER OF DIRECTORS
14. TERM
15. REMOVAL OF DIRECTORS
16. VACANIES
17. REMUNERATION
18. QUORUM OF DIRECTORS MEETINGS
19. NOTICE OF DIRECTORS MEETING
20. VOTING
21. PROCEDURE
22. FINANCE COMMITTEE
23. PERSONNEL COMMITTEE
24. AD HOC COMMITTEES
25. OFFICERS
26. PRESIDENT
27. VICE-PRESIDENT
28. SECRETARY
29. TREASURER
30. DELEGATING DUTIES
31. INDEMNIFICATION
32. AUDITORS
33. CHEQUES
34. INSTRUMENTS
35. FINANCIAL YEAR
36. CUSTODY OF SECURITIES
37. BOOKS AND RECORDS
38. ENACTMENT AND AMENDMENT
39. INTERPRETATION
MINUTES JUST DON’T HAPPEN
Accurate records are an invaluable source of information about the business of a corporation. The minutes of all meetings of the Board and its committees are a legal record and may be subpoenaed. Accuracy is vitally important because the minutes are a permanent record of decisions and reports of the Board and its committees.
In writing the minutes, it is important that the Secretary sit where the members of the meeting can be easily seen, and where the discussion can be heard clearly. Otherwise, it will be hard to keep up with the discussion, and time will be lost in repeating information.
When minutes are being written, they should be accurate and concise. What type of minutes and how much to include can be decided by the group or between the President and the Secretary.
Agenda items should be numbered. While writing the minutes, the Secretary can identify or index the minutes with the items on the agenda. The agenda is then attached to the minutes and filed as a complete package.
Five Main Reasons for Keeping Minutes
✓ Provides a permanent record of proceedings of a meeting
✓ Keeps track of progress
✓ Informs absent members
✓ Provides a useful guide of evaluating a committee’s work
✓ Helps familiarize new members with the Centre/committee; for committees/Centres that experience a high turnover, the minutes, with a brief outline of the discussion, can bring new members up to date quickly
A Basic Set of Minutes Should Include...
✓ The name of the Centre and/or committee
✓ When and where the meeting took place
✓ Who chaired the meeting, and who was present; for larger groups it may be easier to record who was absent
✓ Existence of a quorum
✓ Voting results from the last meeting (if applicable)
✓ Adoption of the last meeting’s minutes
✓ The matters discussed and any decisions made; business matters should be divided into old and new business — old business usually refers to items from the minutes of previous meetings; new business refers to items that have not been addressed by the committee/Centre before; when recording items of business, the motion, who made the motion, the seconder, and whether it was carried or defeated should be included
✓ Agenda items for the next meeting: this could include unfinished business or assignments given to sub-committees; the list serves as a good reminder to the committee/Centre
✓ The time and the place of the next meeting
✓ The Secretary and the President’s signatures
Other Suggestions...
✓ Requesting that the person giving an oral report have a copy for the Secretary, especially if it is lengthy
✓ Requesting that lengthy motions be written out and given to the Secretary in advance (a form could be available for this)=
✓ As soon as possible after the meeting, write up the final version of the minutes while they are still fresh in your mind
✓ Prepare the meeting agenda and distribute it as soon as possible
Helpful Hints...
✓ Keep the minutes in a three-ring binder with a separate section for Annual General Meeting minutes
✓ Always have more than one pen/pencil on hand and lots of paper
✓ Have ready with you sheets of paper with the following:
____________________ moved that
seconded by
This will help to record motions faster!
✓ It is best to use a standard format at each meeting. Beside the text of the minutes, it is noted who agreed to take some sort of action. The minutes then become a planning tool to follow-up who should be carrying out the activity. A full set of minutes from the previous year should be included in a Board of Directors handbook.
Sample: Board Meeting Minutes Form
Date:
Time:
Location:
Present:
Other:
Regrets:
Approval of Agenda: Additions/Deletions:
Approval of Minutes from Previous Meetings with Changes:
Seconded:
Carried:
Business Arising from Previous Minutes:
Reports:
Treasurer’s Report:
Teacher’s Report:
Newsletter Report:
Other:
New Business:
Date of Next Meeting/Location:
Adjournment:
Seconded:
Carried:
CONDUCTING ELECTIONS
Recruiting Candidates for Office...
✓ A Nominating Committee is responsible for ensuring that the names of all members who wish to stand for each vacant position are considered by the Centre during elections. It solicits nominations from the membership and contacts each nominee to:
• Notify them of the nomination
• Answer any questions about the position
• Verify that they will stand for the election
✓ The Nominating Committee should consist of people who aren’t current Directors, or are Directors that are leaving the Board and not seeking re-election.
✓ The Nominating Committee’s report to the Annual General Meeting will be a list of candidates who have agreed to run for election; it may also recommend persons for election as chairs or members of standing committees.
✓ If a Nominating Committee doesn’t exist in a Centre, the members of the Board have an important recruiting role to play; they must find new candidates for the vacant positions.
Election Procedures...
✓ Each Centre is unique — election procedures are adapted to suit particular needs! There is no one model for the proper conduct of elections, but whichever method is chosen, it should be proposed to the general membership for agreement and inclusion in the bylaws.
✓ How do you know if the method chosen is the right one? Democracy reigns! If every member of the Centre is treated fairly, equally and with respect during the entire election process, then the method used is likely proper.
Who Should Conduct the Elections?
✓ An Elections Officer, who is neutral and unbiased and is seen to be so by the electorate, and who is not a candidate for a position, should conduct the elections. This person should also be familiar with election procedures.
✓ The Elections Officer is responsible for chairing the elections. They should check the bylaws of the Centre to familiarize themselves with the Centre’s methods as adopted by the general membership. If no procedures are included in the bylaws, then the Elections Officer should examine past Annual General Meeting minutes for the methods traditionally used. Regardless of the elections method chosen, it needs to be explained and if necessary, adopted by the annual meeting participants with a two-thirds majority vote.
Sample Election Procedures...
✓ The Nominating Committee report, containing the names of eligible members who have been duly approached, and have agreed to stand, is circulated to all members or posted prior to the election
✓ An Election Chair (or Officer) is appointed/elected
✓ All positions are declared vacant
✓ The Election Secretary is appointed/elected
✓ Bylaws governing the conduct of the election procedure is read or explained
✓ Scrutineers are appointed/elected
✓ A motion to receive the Nominating Committee report is entertained
✓ Each Office is then brought forward in turn as follows:
• Call for nominations from the floor — include names of candidates from the Nominating Committee’s report (nominations need not be seconded)
• List all names in the order nominated for all to see, beginning with the candidates proposed by the Nominating Committee
• Close nominations either by a declaration from the Chair after a reasonable time, or by approval of a motion by a two-thirds majority vote that nominations be closed
• Ask each person nominated, in reverse order of nomination, whether they will stand for the position
• If only one person agrees to stand, then they are elected by acclamation to that position (the Elections Officer announces that result); if more than one person agrees to stand, then each is asked to briefly address the group, explaining their views on policy, etc.
• Voting should be by ballot, each member receiving one ballot, entering the name of the candidate of choice.
✓ Scruitneers distribute and collect the ballots, count the votes cast for each candidate, and report the results to the Elections Officer. Results are announced, the winner being the candidate that receives the majority (50% plus 1) of the votes cast.
✓ If no candidate receives a majority, then the candidate with the least number of votes received is dropped from the list and a second vote is taken. This process continues until a candidate with clear majority emerges. If no nominee allows their name to stand, then there will be no candidates for election or acclamation. In this case, nominations can be reopened and solicited from the floor. Again, if no nominees agree to stand for the position, then it is declared vacant (either for the entire year, or within a period of time which the Board is charged with the responsibility of filling the position). Elections can be re-opened only at the direction of a motion that is carried with a two-thirds majority of votes cast.
✓ At the close of the elections, ballots should be disposed of at the direction of a motion from the floor
✓ The entire list of Elected Officers is read by the Elections Secretary
✓ The Elections Officer returns the chair to the President of the Board of Directors (or whomever is chairing the meeting)
Additional Voting and Elections Tips...
✓ If the Centre is to have their election in the spring (or whichever date is described in the bylaws), the time for the Board to serve is from spring to spring — the term of service is for 12 months (or as described in the bylaws).
✓ If membership is not full in the spring, then the Centre should take a strong look at having elections in the fall when all of the families are at the Centre. This would mean that for this year, the existing Board members would do work on behalf of the Centre as an `interim’ Board until the elections in the fall. The Board will need to make a motion at a Board meeting to decide on this method.
✓ Another recommendation from the FSCO is that a part of the `registration fee’ be called `annual membership fee’ for the following two reasons:
• If the elections are conducted in the spring and there are new families at the meeting, they should have a vote for election purposes. If they have paid an `annual membership fee’ then they are immediately part of the co-operative and can help with the voting, etc. and then get the Board moving on the business of the Centre.
• The existing Board can also pay this small `annual membership fee’ and still have the ability to do the business of the Centre until the formal election is held in the fall. This would be valuable for the interim Board during a year that the election date is being changed.
• Note: voting privileges would only be available to members that have paid the `annual membership fee’
Informal Voting and Abstentions...
✓ Voting for regular business issues is usually done informally, with a raising of hands or voting cards, with a counting of the hands or cards that vote `yay’ or `nay’ (although it is sometimes obvious that a vote passes or fails without having to count — and this is the Chair of the meeting’s decision).
✓ Another voting option is to complete the vote by poll, where each member is asked in turn whether they vote in favour of the motion or against, and it is recorded that way. It can be a good idea to do a poll if you need an exact number, the vote is likely to be close or the vote is a contentious one.
✓ Robert’s Rules indicate that abstentions do not affect the vote. In order for a vote to pass, it requires either a majority, or in some cases, 2/3 of the votes being cast in favour of the motion — this is calculated based on the total number of voters present, as long as there is quorum.
SAMPLE: OPERATING BUDGET
ABC Childcare Centre: Annual Operating Budget
Name of Centre:
Address of Centre:
Licensed Number of Spaces:
Expenditures
|Expenditure |Actual (as per financial |Projected |
| |statements) |Date: beginning period to ending |
| |Date: beginning period to ending |period (include day, month and |
| |period (include day, month and |year) |
| |year) | |
|Staff Services (I) |
|(include the name and wages of each staff member; include coverage for extra staff required due to vacation and illness) |
|Director: |$________ |$________ |
|Supervisor(s): |$________ |$________ |
|Childcare Worker(s): |$________ |$________ |
|Casual Employee(s): |$________ |$________ |
|Bookkeeper: |$________ |$________ |
|Cook: |$________ |$________ |
|Janitor: |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (I): |$________ |$________ |
|Staff Benefits (II) | | |
|Vacation Pay: |$________ |$________ |
|Canada Pension Plan: |$________ |$________ |
|Employment Insurance: |$________ |$________ |
|Worker’s Compensation: |$________ |$________ |
|Sick Leave: |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (II): |$________ |$________ |
|Professional Development (III) | | |
|Memberships: |$________ |$________ |
|Workshops and Conferences: |$________ |$________ |
|Courses: |$________ |$________ |
|First Aid and CPR Courses: |$________ |$________ |
|Resource Materials: |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (III): |$________ |$________ |
|Administration (IV) | | |
|Accounting Fees: |$________ |$________ |
|Audit Fee: |$________ |$________ |
|Advertising: |$________ |$________ |
|Board Liability Insurance: |$________ |$________ |
|Telephone: |$________ |$________ |
|Office Supplies: |$________ |$________ |
|Bank Charges: |$________ |$________ |
|Travel Allowances: |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (IV): |$________ |$________ |
|Physical Facility (V) | | |
|Rent or Mortgage (principal and interest): |$________ |$________ |
|Taxes: |$________ |$________ |
|Utilities: |$________ |$________ |
|Insurance: |$________ |$________ |
|Building Maintenance: |$________ |$________ |
|Renovation and Alterations: |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (V): |$________ |$________ |
|Equipment and Furnishings (VI) (craft materials should be included under consumable supplies) |
|Kitchen Equipment: |$________ |$________ |
|Office Equipment: |$________ |$________ |
|Children’s Furnishings: |$________ |$________ |
|Children’s Play Equipment: |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (VI): |$________ |$________ |
|Consumable Supplies (VII) .(include the number of meals and snacks supplied per child daily; indicate the daily cost of meals and |
|snacks for one child) |
|Food (number of snacks daily:_________) |$________ |$________ |
|Food (number of meals daily: _________) |$________ |$________ |
|Cost per child per day $_____ x number of children x 5 days x 52|$________ |$________ |
|weeks= yearly cost | | |
|Kitchen and Cleaning Supplies: |$________ |$________ |
|Toiletry and First Aid Supplies: |$________ |$________ |
|Craft and Children’s Activity Supplies: |$________ |$________ |
|Field Trips (including transportation): |$________ |$________ |
|Other: |$________ |$________ |
|Subtotal (VII): |$________ |$________ |
|Total Expenditures (totals of Sections I to VII inclusive): |$________ |$________ |
Revenue
|Revenue |Actual (as per financial |Projected |
| |records) | |
|Fees (I) (Revenue from fees in past 12 months) |$_________ | |
|Projected Revenue (July and August have been separated as many Centres experience| | |
|lower/higher enrolment during these months; occupancy loss takes into account | | |
|those times when the Centre is not operating at capacity) | | |
|A. September to June (___ spaces x monthly fee x 10 months) | |$_________ |
|Less occupancy loss of _____%) | |($_________) |
|Subtotal (A): | |$_________ |
|B. July and August (___ spaces x monthly fee x 10 months) | |$_________ |
|Less occupancy loss of _____%) | |($_________) |
|Subtotal (B): | |$_________ |
|Projected 12 Month Revenue — Total (A) and (B): | |$_________ |
|Childcare Grants (II) | | |
|Start-Up Grant: |$_________ |$_________ |
|Early Childhood Services Grant: |$_________ |$_________ |
|Support Services Grant: |$_________ |$_________ |
|Inclusion Grant: |$_________ |$_________ |
|Other: |$_________ |$_________ |
|Subtotal (II): |$_________ |$_________ |
|Other Grants (III) (please specify) | | |
|Other: |$_________ |$_________ |
|Other: |$_________ |$_________ |
|Subtotal (III): |$_________ |$_________ |
|Other Revenue (IV) | | |
|Fundraising: |$_________ |$_________ |
|Donations: |$_________ |$_________ |
|Other: |$_________ |$_________ |
|Subtotal (IV): |$_________ |$_________ |
|Total Revenue (totals of Sections I to IV inclusive): |$_________ |$_________ |
|Total Revenue (total Sections I to IV inclusive) |$_________ |$_________ |
|Less Total Expenditures (total Sections I to VII inclusive) |($_________) |($_________) |
|Surplus/Deficit |$_________ |$_________ |
____________________________________ __________________________
(Signature of President of Board of Directors) (Date)
____________________________________ __________________________
(Signature of Treasurer of Board of Directors) (Date)
SAMPLE: CASH FLOW FORECAST
The following Cash Flow Forecast is for the first four months of the year only (the remaining eight months of the year can be set-up and maintained in the same manner).
| |January |February |March |April |
|
| |Forecast |Actual |Forecast |Actual |Forecast |Actual |Forecast |Actual |
|Income | | | | | | | | |
|
|Income Item 1 | | | | | | | | |
|
|Income Item 2 | | | | | | | | |
|
|Income Item 3 | | | | | | | | |
|
|Income Item 4 | | | | | | | | |
|
|Income Item 5 | | | | | | | | |
|
|TOTAL | $ | $ | $ | $ | $ | $ | $ | $ |
|
|Expense | | | | | | | | |
|
|Expense Item 1 | | | | | | | | |
|
|Expense Item 2 | | | | | | | | |
|
|Expense Item 3 | | | | | | | | |
|
|Expense Item 4 | | | | | | | | |
|
|Expense Item 5 | | | | | | | | |
|
|Expense Item 6 | | | | | | | | |
|
|Expense Item 7 | | | | | | | | |
|
|Expense Item 8 | | | | | | | | |
|
|TOTAL | $ | $ | $ | $ | $ | $ | $ | $ |
|
|Income Minus Expenses | $ | $ | $ | $ | $ | $ | $ | $ |
|
|Opening Bank Balance | $ | $ | $ | $ | $ | $ | $ | $ |
|
|Closing Bank Balance | $ | $ | $ | $ | $ | $ | $ | $ |
|
POLICY: TERMS AND CONDITIONS FOR USE OF PETTY CASH
Effective Date:
Employee Name: ______________________________
Amount of Petty Cash: $_______________
✓ The petty cash provided may only be used for business purchases as specified below:
• __________________________________________________________________
• __________________________________________________________________
• __________________________________________________________________
✓ No purchases may exceed the limit of $_______________
✓ If requested the Petty Cash must be surrendered to ABC Childcare Centre
✓ Only ABC Childcare Centre is authorized to assign the petty cash to other staff as required
✓ ABC Childcare Centre must be notified immediately if the petty cash is lost or stolen
All receipts (cash register and credit card) must be handed in to _________ ___________ immediately after the purchase is made (or the next business day)
✓ PURCHASES THAT DO NOT HAVE RECEIPTS WILL NOT BE PAID BY ABC CHILDCARE CENTRE AND WILL BE THE RESPONSIBILITY OF THE EMPLOYEE MENTIONED ABOVE, AND FURTHER AGREES TO ALLOW ABC CHILDCARE CENTRE TO DEDUCT THE FULL AMOUNT OWING FROM THE EMPLOYEES PAYCHEQUE
I, _____________________________________ (print name) agree to the above written terms and conditions and agree to abide by them at all times. I understand that failure to abide by the above terms and conditions or fraudulent use of the Petty Cash may result in legal action being taken by ABC Childcare Centre and/or my immediate dismissal.
___________________________________ _________________________
Employee’s Signature Date (day/month/year)
___________________________________ _________________________
Employer’s Signature Date (day/month/year)
SAMPLE: EMPLOYMENT CONTRACT
*Information must be completed in detail, and to the best of your knowledge.
| Employer: | |
|
|Address: | |
|
|Telephone Number: | |
|
|Fax Number: | |
|
|Email Address/Website: | |
|
|Employee: | |
|
|Address: | |
|
|Telephone Number: | |
|
|Fax Number: | |
|
|Email Address/Website: | |
|
|Date of Birth: | |
|
ABC Childcare Centre and ___________________________ agree as follows:
DURATION OF CONTRACT
This contract shall be (full-time, permanent or part-time, permanent) in nature, or for the duration of ____________________ from the date the employee assumes his/her position.
JOB DESCRIPTION
ABC Childcare Centre’s position of _____________________ carries with it the following duties and responsibilities:
(Attach separate sheet for additional duties and responsibilities (if necessary) or attach a copy of the job description)
WORK SCHEDULE
The work week is defined as Monday to Friday.
The work week for the employee is ________ hours, ________ per day, exclusive of a ________ hour unpaid lunch period. Work and lunch schedules will be determined by the Supervisor in consultation with the employees, to ensure that optimum staff/child ratios are maintained at all times.
Hours worked in excess of _________ in a week will be treated as overtime and paid for at the employee’s hourly rate. Hours worked in excess of forty-four (44) in a week will be paid for at one and one-half times the employee’s hourly rate.
The employee shall be entitled to _______ weeks of paid vacation per year.
The employee shall be entitled to _______ days of sick leave per year.
WAGES AND DEDUCTIONS
ABC Childcare Centre agrees to pay the employee, for his/her work, ages of $_________ per week, or $_________ per hour. These shall be paid in intervals of _________________.
ABC Childcare Centre agrees to pay all taxes and submit all deductions payable as prescribed by law (including, but not limited to Employment Insurance, Income Tax and Canada Pension Plan).
ABC Childcare Centre shall not recoup from the employee, through payroll deductions or any other means, any costs incurred in recruiting or retaining the employee. These include, but are not limited to, any amounts payable to a third-party recruiter.
WAGE INCREASES
If applicable, ABC Childcare Centre agrees to review and adjust (if necessary) the employee’s wages after _______ months of employment, to ensure they meet the prevailing wage rate for the occupation in the region.
NOTICE OF RESIGNATION
Should he/she wish to terminate the present contract, the employee agrees to give ABC Childcare Centre written notice thereof at least ____ weeks in advance.
NOTICE OF TERMINATION OF EMPLOYMENT
ABC Childcare Centre must give written notice before terminating the contract of the employee if this employee has completed three (3) months of uninterrupted service, and if the contract is not about to expire. This notice shall be provided at least _____ weeks in advance.
ABC Childcare Centre is obliged to abide by the standards set out in the relevant provincial Labour Standards Act. In particular, the Centre must abide by the standards with respect to how wages are paid, how overtime is calculated, lunch periods, statutory holidays, annual leave, family leave, benefits and recourse under the terms of the Act. Any terms of this contract of employment less favourable to the employee than the standards stipulated in the relevant Labour Standards Act are null and void.
Dated at _______________ this ________________ day of ________________, 20XX.
_________________________________ ____________________________
Signature of Employee Signature of Employer
_________________________________ ____________________________
Name of Employee (please print) Name of Employer (please print)
................
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