SECTION 15 - FINANCES

15.0  Precedence of Documents

The financial operations of the society are governed by the society's Constitution, Bylaws and Policies & Procedures Manuel, and by applicable bylaws, policies, and procedures of the IEEE. Nothing in this document shall be construed as taking precedence over those basic documents.

All expenditures or other financial transactions made by society officers, other volunteers, and staff must be in compliance with the above referenced documents and the provisions of this section. Any exceptions to the procedures set forth in this manual or in the referenced documents must be approved by the president, the Executive Committee, or the board, according to the exception.

15.1  Finance Committee

The Finance Committee is a standing committee of the Board of Governors, charged with recommending financial policy and budgets to the board. It shall be composed of the treasurer (chair), the president, president-elect, immediate past president, and the secretary. The chief staff executive and the appropriate finance and accounting staff member will be ex officio, nonvoting members of the committee.  The vice presidents or their representatives will be non-voting members of the committee, and as such will not be required to attend extraordinary meetings of the committee.

15.1.1  Budget Development

The committee is responsible for coordinating the budget development process.

1.   Each year (normally at the first meetings week), the Finance Committee will provide each program board with a budgetary target (or targets) for the following year.

2.   Five months prior to the IEEE deadline, each program board will submit to the treasurer a plan and budget that meets the assigned targets, whether it is a limit on the program subsidy or a surplus of a certain size.  The plan and budget will be constructed in budget decision module form with the aim of facilitating endorsement or amendment at subsequent steps in the budget approval process.  Plans which require initial investments in a multi-year context are permitted.  All new unfunded initiatives and plans are due five months prior the IEEE deadline.

3.   Any board may submit an appeal of its assigned target(s) with its plan and draft budget, attempting to demonstrate to the Finance Committee, Executive Committee, and/or Board of Governors why it should be amended.  However, such an appeal shall not relieve the board of its responsibility to construct a plan and budget that will meet the target as assigned, but that plan may be supplemented with arguments as to why the target is inappropriate.

4.   The Finance Committee will review the recommended plans and make its recommendations regarding page budgets and pricing to the Executive Committee and Board of Governors for ultimate review and approval.  This action, taken in the context of preliminary approval of all the other program budgets, largely establishes the income of the society for the following year.

5.   The Finance Committee will provide comments and suggestions, and possibly revised targets, for all program boards.

6.   All program boards will submit to the treasurer final plans and budgets to meet their targets two (2)  months prior to the IEEE deadline.

7.   The Finance Committee will prepare a draft recommended budget for circulation 30 days  prior to the IEEE deadline.  The Finance Committee will consider any further information or appeals that any of the program boards wish to suggest, meeting in a formal hearing format.

8.   The Finance Committee’s final recommendations for the following years’ budget will be presented to the Board of Governors for review, amendment, and approval no less than 15 days prior to the IEEE deadline.

9.   The final approved budget by the Board of Governors will be sent to the IEEE by the IEEE deadline.

10.  The budgetary planning horizon is three years.

 

15.1.2  Budget Monitoring

 

The committee is responsible for monitoring the current year income and expenditures relative to budget. It shall seek to anticipate potential problems, and to make recommendations for budget changes as appropriate.

 

15.1.3  Investments

 

The committee is responsible for determining policy on investment strategy for society funds. The committee is responsible for developing both short- and long-term financial plans and to develop financial policy options for the society.

 

15.1.4  Budget Modifications

 

All proposals resulting in full-year equivalent budget modifications of over $100,000, including new staff positions, must be presented to the Finance Committee prior to presentation to the Executive Committee and board. It shall be the responsibility of the Finance Committee to make recommendations to the board and Executive Committee on such proposals. Individuals, boards, or committees making proposals for budget modifications of less than $100,000 may seek the recommendation or endorsement of the Finance Committee, but are not required to do so, before seeking presidential, Executive Committee or board approval.

 

15.1.5  Financial Policies & Procedures

 

The Finance Committee is responsible for reviewing any proposed financial policy or procedure, and for recommending new policies and procedures as may be required for incorporation in the IEEE Computer Society Policies & Procedures Manual.

 

15.1.6  Meeting Scheduling

 

Finance Committee meetings are to be scheduled in such a way as to permit, to the extent possible, consideration of proposals having financial implications prior to their submission to the Board of Governors.

 

15.2 BUDGET Development

 

15.2.1 Fiscal Year

 

The fiscal year of the society is 1 January through 31 December.

 

15.2.2   Expenditure Approval within the Approved Base Budget

 

The existence of an approved base budget gives to the president, to the Executive Committee, and to each vice president, and to the standing committee chairs, within their respective areas of responsibility, the authority to approve expenditures within their respective budgets. Expenditures for reimbursements for travel expenses must be approved according to current society regulations.

 

The president and vice presidents may, by writing to the treasurer, delegate their authority to approve expenditures to a total within or below the dollar amount specified for specific budget line items in the approved base budget to specific society members who require it by virtue of their offices. Persons with authority to approve expenditures have the responsibility to stay within the authorized total. The appropriate finance and accounting staff member will provide budget versus actual reports on a regular and timely basis.

 

15.2.3   Expenditure Approval in Excess of the Approved Budget

 

Incremental expenditures for specific account number items which cause the total amount spent for those items to exceed the budgeted amount, may be approved by the following parties until the cumulative totals indicated are reached:

 

Executive Committee -- $100,000 or less per operating or capital budget line item per meeting up to a cumulative total (across all budget lines and meetings) of 5% of the approved base budget.

 

President -- $25,000 or less per operating or capital budget line item up to a cumulative total of 2.5% of the approved base budget.

 

Treasurer -- $0.

 

Unless expressly provided for elsewhere in this manual, vice presidents do not have authority to spend in excess of their total budget allocation.   Vice presidents do have the authority to authorize expenditures within a cost center that vary from the approved budget at the individual budget line detail level as long as the cost center total budget is not exceeded. Similarly, the chief staff executive may authorize variances from individual budget lines for office operations, but may not exceed the approved total office operations budget.

A spending action by the president or the Executive Committee under the authority specified in this section constitutes an automatic amendment of the budget to the amount approved. All such spending actions and budget amendments shall be reported to the treasurer who shall revise the budget, and who shall report such actions and amendments to the board by appropriate publication in the Agenda Book.

 

15.2.4 Financial Exigency

 

The Executive Committee may limit or suspend the expenditure authority associated with any account or set of accounts due to fiscal irregularities or financial exigency. Any such limitation must be reported in complete detail to the board within 30 days by the person who was treasurer at the time.

 

15.2.5 Board Action

 

The board may, by resolution at any meeting or via between-meeting ballot as provided elsewhere in this manual, amend the budget, either implicitly or explicitly. An explicit amendment will state a dollar amount to be associated with a specific budget line. Implicit amendments are associated with approval of a new program or service, the proposal for which sets forth the budgetary impact, the approval of a new staff position, and other similar actions which affect the budget. The treasurer shall revise the budget as appropriate and the new budget will be known as the amended budget.

 

15.2.6 Budget Publication

 

The Agenda Book for each meeting of the board should contain a budget report by the treasurer that includes the approved base budget or the amended budget for the current year, so labeled. The Agenda Book for meeting 1 should also include the amended budget and the current projection for the prior year. The budgets in the agenda books for subsequent meetings should include the projection for the current year. The treasurer's report should include a summary of changes since the last budget was distributed, and a summary of spending actions constituting amendments to the budget by the Executive Committee and the president.

 

15.2.7   Financial and Budgetary Guidelines and Targets

 

Over the long term, the IEEE Computer Society should operate at levels which produce sufficient surpluses to maintain its reserves at levels which will ensure its continued financial health.  Annual operating budgets should be consistent with this long-term objective.  Deficits should be corrected or avoided by increasing dues and other charges for services when expenses cannot be reduced without eroding the quality of the products and services provided to the membership.  Reserves should be maintained to provide for the financial security of the society, to provide increased or new member services, to fund special projects, to provide initial start-up funding for new programs, to acquire capital equipment needed for the conduct of the society’s programs, and to protect the society from short-term financial exigencies.

 

As guidelines for budgetary planning, the society should seek to maintain an end-of-year total reserves (net worth) position equal to 20% of the current year operating expenditures.  The guideline for liquid reserves (current assets less inventory and current liabilities) should approximate 5% of the current year operating expenditures.

 

Each year the Finance Committee should recommend and the Board of Governors should adopt an operating budget with a minimum budgeted surplus of $500,000.  Should reserves levels drop below 80% of the guideline levels as defined above, budgets with a minimum surplus of $750,000 will be adopted until the reserves are restored to guideline levels.

 

15.2.8 Operating Budget Guidelines

 

Services sold to members (e.g., society publications and conference activities) should have a goal of being at least self-supporting. This is defined as income derived from all sources for a given service equaling total expenses incurred to provide that service, including an allocated share of general and administrative expenses. (A portion of the IEEE Computer Society dues income should be allocated to Computer magazine, as it is provided to all members as part of their membership). Moreover, attempts should be made to generate surpluses in those programs where it is possible to do so in order to cover the operating expenses of programs that have no income, to generate funds for reserves, to fund new projects, and to subsidize programs consistent with the society's purposes.

 

Prices of services offered to members shall be set high enough to cover the incremental cost of providing those services.  This should be done so that increasing numbers of members taking advantage of a given service, or increasing total membership, will not create or increase a deficit for that service.  Special rates for students may be an exception to this guideline.

 

Special projects, one time expenditures, and start-up costs for new services may be subsidized. Windfall net income, regular operating income in excess of expenses, and available reserves should be used to finance such ventures.

 

A long range planning perspective may take precedence over these guidelines, and may require or allow certain activities to show a deficit over time.

 

Further, the board may decide that certain activities should be subsidized as an important service to the membership or profession independent of their ability to be self-supporting. Such decisions should be explicit. Funds for such subsidies must be generated by surpluses in other programs.

 

15.2.9   Allocation of Operating Costs to Program Cost Centers

 

Costs of society office operations not directly attributable to given functions or services shall be allocated among the functions and services provided by the offices according to an algorithm and procedure developed by the appropriate finance and accounting staff member. The algorithm shall be approved by the Finance Committee.

 

15.3 Travel Regulations

 

15.3.1     Travel Reimbursement

 

Except for members of the Executive Committee and society staff members, travel expenses are generally not paid by the society. However, vice presidents may approve travel expenses within the limitations of their own budgets, providing that such expenses are consistent with the specific travel regulations set forth in this section. Any exceptions to the restrictions on travel and travel reimbursements must be approved by the president of the society.

 

15.3.2 Executive Committee Travel

 

Executive Committee members may travel on society business at society expense at their own discretion if they feel expenses cannot or should not be covered by other sources. The president shall monitor the expenditure of society funds for this purpose and may initiate any action or restriction of such discretion deemed appropriate.

15.3.3 Specific Travel Regulations

 

The purpose of these travel regulations is to provide guidelines for reimbursement of travel expenses by employees, officers, or others using society funds for travel related to society business.

 

          15.3.3.1 Permission to Travel Using Society Funds

 

Permission to travel using society funds must be approved in advance by the responsible officer.

 

15.3.3.2 Staff Travel

 

Staff travel must be approved by the chief staff executive or other staff manager to whom that responsibility has been delegated by the chief staff executive.

 

          15.3.3.3 Request for Travel Approval and Travel Advance

 

Prior to any travel a request for travel approval must be approved by the appropriate officer or staff manager. A copy should be forwarded to the appropriate finance and accounting staff member.

Upon receiving the "Travel Approval”, the traveler may request a travel advance from the appropriate finance and accounting staff member, who may advance all estimated expenses, provided that they are reasonable and customary.

 

15.3.3.4 Permissible Charges

 

All travel expenses must be reasonable and customary. Air fare will not be budgeted to exceed coach fare. Discounted fares should be used when available. The society will pay penalties associated with the cancellation or change of discounted tickets for authorized society travel of volunteers or staff caused by circumstances beyond the traveler's control. If railroad fare or personal mileage charges exceed the coach air fare available at the time, only the air fare cost will be allowed. Rental automobiles are allowed when public   transportation    would   not    normally   be utilized for personal travel, or when the use of a rental car is more economical than travel by common carrier.

 

The lowest cost form of local travel should be used whenever possible. Use of one's personal automobile may be reimbursed at the current rate per mile established by the IEEE. Total expenses, including tolls, may not exceed allowable air fare and expenses which would have been incurred if air transportation were used. Current IEEE policies (e.g., rental automobile collision insurance, piloting private aircraft, etc). also apply (see IEEE Finance Operations Manual).

 

Allowable room charges are those which would be incurred by a prudent traveler. Food and beverage charges, including tips, in excess of $35 per day must be accompanied by original receipts and justification.

 

All other expenses incurred during the course of travel on society business not explicitly listed herein should be reasonable and customary.

 

         15.3.3.5 Travel Expense Accounting -- Procedure for Reimbursement

 

The request for reimbursement form submitted to the appropriate finance and accounting staff member must account for all monies expended on travel. If a signed "Travel Approval" form (or equivalent provided by electronic mail) has not previously been furnished, a copy of the approved request must be included with the travel expense account form or the reimbursement form must be approved by signature of the responsible vice president or other officer. Travel expense accounting should be filed within 30 days of the completion of the travel. The appropriate finance and accounting staff member is responsible for assuring that travel expenses are within society policy before authorizing reimbursement unless specific exceptions have been approved. Single charges above $25 (including meals) should normally be accompanied by receipts or other explanation. The appropriate finance and accounting staff member is responsible for seeing that appropriate documentation of expenses is provided by travelers requesting reimbursement.

 

15.4 TREASURER

 

15.4.1 Disbursement of Society Funds

 

The treasurer is responsible for monitoring all society assets in keeping with society policy.

 

However, as a matter of practical operation, disbursements required for day-to-day operations are made by appropriate society and IEEE staff. 

 

The IEEE holds some society funds, disburses payroll checks, and provides accounting of all such

disbursements to the society.  Each IEEE Computer Society office also disburses funds as necessary for its operation.

 

Responsibility for all such disbursements is delegated by the treasurer to the chief staff executive, who in turn delegates financial authority to other society staff, doing so in a formal memorandum of financial authority that explicitly sets forth the level of authority of each staff position. All receipts and disbursements are recorded and reported in monthly financial statements to the treasurer and other volunteer leaders, as appropriate.

 

15.4.2 Investment of Funds

 

The appropriate finance and accounting staff member, under the guidance of the treasurer, invests society funds in programs established by the IEEE. 

15.4.3 Reports

 

The treasurer must monitor the receipt, expenditure and investment of all society funds, insure they are within budget, and at each board meeting report the status of such funds to the Executive Committee, Finance Committee and board. The treasurer shall also submit society financial reports to the IEEE as required by the bylaws and policies of the society and the IEEE.