Mosaica 6 Detail App 6

MOSAICA EDUCATION, INC.
FINANCIAL POLICIES AND PROCEDURES

MANUAL

AUGUST 1, 2014

This Page Intentionally Left Blank

MEI Accounting Procedures

TABLE OF CONTENTS

I. RESPONSIBILITIES OF THE ACCOUNTANT ......................................................... 1
II. VENDOR BIDS ................................................................................................................. 2
III. PURCHASE OF GOODS OR SERVICES..................................................................... 3
IV. ACCOUNTS PAYABLE / CASH DISBURSEMENTS .................................................5
V. PETTY CASH ................................................................................................................... 7
VI. PAYROLL ......................................................................................................................... 9
VII. MANAGING THE DUE TO MEI ACCOUNT(S) ....................................................... 13
VIII. MANAGEMENT FEES ................................................................................................. 14
IX. BANK RECONCILIATION .......................................................................................... 15
X. CASH RECEIPTS .......................................................................................................... 17
XI. MONTH END CLOSING SCHEDULE ....................................................................... 18
XII. FINANCIAL STATEMENT REPORTING................................................................. 19
XIII. BOARD MEETINGS...................................................................................................... 20
XIV. BUDGETING, BUDGET PREPARATION AND CONTROL .................................. 21
XV. DEPRECIATION ........................................................................................................... 25
XVI. INSURANCE ................................................................................................................... 26
XVII. PERSONAL LEAVE ...................................................................................................... 27
XVIII. REAL ESTATE LEASE AGREEMENTS ................................................................... 28
XIX. FISCAL YEAR END ...................................................................................................... 29
XX. RECORD RETENTION ................................................................................................ 30
XXI. CHART OF ACCOUNTS .............................................................................................. 31


MEI Procedures Manual

I. Responsibilities of the Accountant
A. To help ensure the quality of its work, Mosaica sets high standards and provides
guidance in meeting them. The quality of Mosaicas work depends on the
competence, dedication, and enthusiasm of its multidisciplinary staff members. Some
of the Accountants responsibilities are to:
1. Post all income to the General Ledger
2. Manage Accounts Payable
3. Reconcile bank statement
4. Perform monthly account analysis
5. Complete month end closing
6. Prepare Financial Statements and supporting schedules
7. Present Financial Statements to Mosaica and School Management three days prior
to board meeting
8. Present Financial Statements to the Board
9. Perform End of Year Accruals
10. Assist with Audits
B. Fund Accounting - The accounts of the Schools are presented on the basis of funds
and account groups. A fund is an independent fiscal and accounting entity with a
self-balancing set of accounts comprised of assets, liabilities, funds equity, revenues
and expenditures. Fund accounting presentation segregate funds according to their
intended purpose in compliance with finance related license provisions, authorizer
requirements and governmental regulations.
C. Basis of Accounting - The School shall use the Cash Basis of accounting. When
necessary, reports shall be completed using the Modified Accrual Basis of
accounting.

MEI Accounting Procedures Manual Page 2 of 31

II. Vendor Bids
A. Any goods or services that require competitive bidding from contractors or vendors
should be initiated by forwarding a request thru the Regional Vice-President (RVP) to
the Manager of Purchasing.
B. The Manager of Purchasing will put together the necessary information for the
advertisement. This information will be sent back to the HoS for proofing.
C. Once the ad has been proofed, the Manager of Purchasing will have it posted in the
newspaper for the legally requisite number of times and/or publication period.
D. The bids that are received will be reviewed by the Purchasing Manager and then
forwarded to the HoS (copy to the RVP) with a recommendation as to which
represents the lowest responsive bid, and any form of contract that may be required.
E. The HoS forwards the bids to the Board of Directors for review and approval.
F. Where required, bids requiring authorizer or other approvals or review will be
forwarded by the HoS to the appropriate office or agency.
G. Following approvals pursuant to paragraphs E and F above, the vendor of choice will
be notified by the Purchasing Manager.
H. The name of the legal entity, address, and social security number of all contractors
must be on file before work begins or services provided.

III. Purchase of Goods or Services
A. Purchase Orders
1. Purchase Orders are prepared at the School
a. Teachers / Staff members must fill out a Purchase Order (Attachment E) with
a complete description of the item or service.
b. Completed Purchase Orders will then be transmitted to the HoS, who will
verify the availability of budgeted funds. This information may be ascertained
from the School Accountant or from online access to the schools accounting
records.
c. Additional approvals, if any, which are prescribed in the following table shall
then be verified by a signature affixed to the Purchase Order either by hand or
electronically:
Amount of Purchase RVP Board
< $1,000 No No
$1,000 - $9999.99 Yes No
> $10,000 Yes Yes
d. The School submits the approved purchase order to the Manager of
Purchasing and the School Accountant at the regional accounting office by e-
mail or fax.
1) The Manager of Purchasing is responsible for:
a) Insuring compliance with bid laws (see Section II above)
b) Identifying lowest price meeting specifications for goods requested.
2) The School Accountant is responsible for:
a) Verifying availability of budgeted funds;
b) Coding and entering the Purchase Order into the Accounting System;
c) Forwarding the approved and processed Purchase Order to the Vendor;
d) Returning a copy of the approved and processed Purchase Order to the
school;
e) Filing a copy of the Purchase Order in the Vendor Files in the
Accounting Office
2. Receipt of goods or services by the school
a. The Building Administrative Assistant (or other designated school employee)
is responsible for verifying conformity of delivery to the Purchase Order and
to the invoice. Any discrepancies are to be reported directly to the vendor
immediately.
b. The Building Administrative (or other designated school employee) shall affix
(or obtain) the signature of the employee verifying receipt and the date of such

signature, and then forward the invoice to the HoS for a signature authorizing
payment.
1) If the purchase was made pursuant to a Purchase Order, it shall be
sufficient to attach a copy of the approved and processed Purchase Order
to the invoice bearing the signature of the receiving employee and the
HoS.
2) If the purchase was not made pursuant to Purchase Order, the invoice shall
be circulated to obtain the appropriate approval signatures in accordance
with the signature table set forth in paragraph III.A.1.c above.
3) The verified copy of the invoice, request for payment and packing slip is
sent to the Regional Accounting office via fax or e-mail within 24 hours of
receipt and verification of goods.
4) Verification of receipt of services from all independent contractors must
include an itemized invoice of services provided, which invoice must be
verified and approved by the HoS.
3. The AP department at the Regional Accounting Office codes the Payment
Voucher and issues a check to the vendor in accordance with Section IV below.

IV. Accounts Payable / Cash Disbursements
A. The payment process is initiated by the school through transmittal of invoices to the
Regional Accounting Office for input into the Accounting System following
verification of the receipt of goods or services in accordance with Section III.A.2
above.
B. The invoices must be signed by the employee who was responsible for verifying
receipt, and by the HoS (and such other persons as may be required in accordance
with the table set forth in paragraph III.A.1.c above) authorizing payment.
C. Twice monthly, the Building Administrative Assistant (or other designated school
employee) shall prepare a Transmittal of Unpaid Invoices which shall include all
previously unsubmitted invoices received at the school to that date together with all
such supporting information as may be required pursuant to paragraph III.A.2 above.
1. To preclude duplication of payment, all payments should be made on the basis of
original invoices rather than statements
2. The Transmittal of Unpaid Invoices shall be signed for by the AP (Accounts
Payable) Accountant, stamped received, and dated.
3. The AP Accountant determines the correct chart of account to be used while
reviewing the invoices. The account numbers used are documented on each
invoice and purchase order.
4. The AP Accountant will record all invoices received in the AP module in the
Accounting system.
5. All invoices received shall be entered into the accounting records so as to indicate
the anticipated payment date.
6. A report of this information is then printed to verify accuracy.
D. On the fifth business day following the dates established in paragraph IV.C above, the
AP Accountant will run an Aged Payable report to be transmitted to the schools HoS
and such other school or Board personnel as the Board may direct.
1. It is understood that the Regional Accounting Office shall generally be
responsible for entering all invoices into the Accounting system within three
business days of receipt, provided that the school has provided such documents to
the Accounting Office in accordance with the provisions of paragraph III.A.2.b.3)
or paragraph IV.C above.
2. Invoices held at the school longer than the prescribed period and transmitted to
the Accounting Office after the specified dates may not be entered into the
Accounting system in time to appear on the Aged Payables Report provided for in
this section.
E. The HoS (or other designated school employee or Board member) shall determine
what bills are to be paid after conferring with the School Accountant to verify
availability of funds in the schools bank account(s).

1. Any deviation from a pattern of paying the oldest outstanding bills should be
documented with a brief explanation by the HoS (or other designated school
employee) as to the reason for recommended delay in payment and the
contemplated date of payment.
2. The HoS shall then sign, date, and transmit to the AP Accountant the foregoing
list of bills to be paid.
F. The AP Accountant processes these bills in the Accounting System utilizing
sequential check numbering.
1. The checks are printed and attached to a copy of the invoice or purchase order.
2. A Check Register Report is produced.
3. The Controller (or other authorized MEI personnel) reviews each payment and
signs the checks.
4. The Check Register is posted to the general ledger.
5. Two copies of the checks are made, one is attached to the MEI file copy of the
invoice or purchase order and the other is sent back to the school for their records.
G. The original checks are then mailed to the school for second signature as prescribed
in the following table, and thereafter mailed to the vendor.
Amount of Check HoS Treasurer
< $1,000 No No
$1,000 - $9999.99 Yes No
> $10,000 Yes Yes
H. Voided checks shall be retained to ensure proper maintenance of checking account
records.
I. Whenever practical, invoices shall be paid in a timely fashion so as to take advantage
of any discount available, but in any event within thirty (30) days of their issue unless
alternative arrangements are made with vendors or unless a dispute arises.
J. Accounts Payable records shall be retained alphabetically by vendor at the school and
at the management company regional office so as to provide a backup for records that
may be misplaced. Records of journal entries shall also be retained electronically,
and on paper chronologically as an additional backup.

V. Petty Cash
A. Each School is allotted a Petty Cash Account in an amount determined by the Board
of Directors. When the Petty Cash Account is opened, a check is issued from the
schools concentration account. There are two types of Petty Cash Accounts at the
schools, a Petty Cash Checking Account and a Petty Cash fund.
1. Petty Cash Checking Account
a. The Petty Cash Checking Account should be used primarily for supplies
where the vendor is not willing to provide credit, or for emergency expenses.
Purchases from this account generally exceed $25, but may not exceed $100.
b. The Petty Cash Checking Account is to be managed by the HoS and
maintained at the school in a secure location.
c. Before Petty Cash is spent for appropriate expenses, a check request is filled
out summarizing the expenses to be reimbursed. All Petty Cash checks shall
be written sequentially, and no checks should be removed from the Petty Cash
Checkbook except after being completed and the payment entered in the
register.
d. Requests for reimbursement should be submitted to the Board of Directors for
approval then sent to the Regional Accounting Office to replenish the schools
bank account. A check from the schools concentration account is issued and
deposited into the Petty Cash Checking Account.
e. A copy of the Petty Cash Checking Account bank statement must be sent to
the Regional Accounting Office within two business days of receipt by the
school. In the event that bank statements are sent directly to the Regional
Accounting Office, the original shall be transmitted by the Regional
Accounting Office to the school within two business days of receipt.
f. The Accountant at the Regional Office makes a journal entry to record the
Petty Cash Activity onto the books at the time of issuance of a replenishment
check or at the time of bank reconciliation, whichever occurs first.
g. Reimbursement of the Petty Cash Checking Account should be initiated by
the HoS (or other designated school employee) when the Petty Cash Account
is reduced to half of the allotment.
h. To obtain reimbursement of Petty Cash Checking Account expenditures, the
following steps must be followed:
1) The Petty Cash Tracking Log must be up-to-date
2) A Check Request summarizing expenditures reflected in the Tracking Log
is submitted to the Board Treasurer for approval. Attached should be the
Petty Cash Tracking Log and receipts.
3) Once the Board Treasurer approves the Check Request, the Check
Request, Petty Cash Tracking Log and receipts are mailed, faxed, or
emailed to the Regional Accounting Office.

4) The School Accountant will enter any necessary information into the
Accounting System and will prepare and transmit a replenishment check
to the school in accordance with the procedures established in paragraph
IV.F above.
B. Petty Cash Fund
1. The Petty Cash Fund is actual cash, managed by the HoS and maintained at the
school in a secure location.
2. The fund is to be used only for those purposes in accordance with the formally
adopted Board policy. The purchases should be less than $25.00.
3. The Board of Directors must approve all requests for increases in the Petty Cash
Fund.
4. A Petty Cash Slip (Attachment A) and a receipt must accompany all petty cash
transactions. Both the HoS and the recipient of the petty cash must sign the petty
cash slip. The Petty Cash slip must be stapled to the receipt and kept with the
petty cash fund.
5. All transactions from the Petty Cash Fund must be recorded on the Petty Cash
Tracking Log (Attachment B).
6. Copies of all receipts for items purchased with petty cash must be provided to the
Regional Accounting Office via fax or e-mail within 24 hours of the purchase.
7. Each month a Copy of the Petty Cash Tracking Log must be sent to the Regional
Office in order for the School Accountant to record the monthly transaction from
the Petty Cash Fund.
8. Any funds in excess of the agreed upon maximum balance must be deposited into
the schools general checking account. The Regional Accounting office must be
notified of this deposit and a Cash Transmittal Form must be completed.
9. The Petty Cash Fund must be reconciled each month with a copy of the
reconciliation and Petty Cash Tracking Logs sent to the Regional Accounting
Office by third day of the new month.
10. To obtain reimbursement of petty cash expenditures, the following steps must be
followed:
1) The Petty Cash Tracking Log must be up-to-date
2) A Check Request summarizing expenditures reflected in the Tracking Log
is submitted to the Board Treasurer for approval. Attached should be the
Petty Cash Tracking Log and receipts.
3) Once the Board Treasurer approves the Check Request, the Check
Request, Petty Cash Tracking Log and receipts are mailed, faxed, or
emailed to the Regional Accounting Office.
4) The School Accountant will enter any necessary information into the
Accounting System and will prepare and transmit a replenishment check
to the school in accordance with the procedures established in paragraph
IV.F above.

VI. Payroll
A. Hiring Process Hiring shall be undertaken in accordance with the procedures
established in the MEI Personnel Handbook, and all necessary payroll forms
including signed and completed W-4s and I-9s shall be obtained prior to entry of
any employee into Payroll.
1. School personnel shall be responsible for verifying that all necessary items as
listed on the Personnel File Inventory Form (see Attachment E) have been
obtained or requested prior to submitting a PAF (Personnel Action Form) to the
MEI Payroll Office. A copy of the Personnel Inventory Form, signed by the
school Administrative Assistant (or other designated personnel) and initialed by
the HoS, verifying compliance with this paragraph, shall accompany the PAF.
2. Most items listed on the Personnel File Inventory Form are required before a
paycheck may issue to an employee. Some, however, necessarily require some
period of time before the document may be obtained, and employers are permitted
to hire and commence payroll processing pending receipt. In all of the later cases,
however, there is a finite period of time for documents to be obtained. The MEI
Payroll Office shall establish a schedule for final receipt of all missing documents
and shall take appropriate steps to insure such schedule is met by school
personnel.
B. Background for Hourly Employees - Overview
1. At the beginning of each fiscal year a payroll file (School Timesheet file) is
provided to the school by the Regional Accounting office. This file will reflect all
active employees account code, department, pay cycles, pay rates, positions and
overtime pay policies with respect to hourly employees.
a. Employees may be added or deleted from the School Timesheet file by the
school (with assistance of the Regional Accounting Office as necessary)
throughout the year which must be submitted on a PCF signed by the HoS and
RVP.
2. The designated school employee must maintain the School Timesheet file on a
pay period by pay period basis recording actual hours worked by each employee.
3. The file must be e-mailed to the Regional Accounting office within one business
day following the close of the pay cycle. This file should be e-mailed with the
return receipt function activated. There must be an assigned backup to e-mail this
information in the event the primary person is out of the office.
C. Background for Salaried Employees - Overview
1. At the beginning of each fiscal year a payroll file (School Timesheet file) is
provided to the school by the Regional Accounting office. This file will reflect all
active employees account code, department, pay cycles, pay rates, positions. In
addition, this file will record any vacation or leave utilized by the salaried
employee.
a. Employees may be added or deleted from the School Timesheet file by the
school (with assistance of the Regional Accounting Office as necessary)

throughout the year which must be submitted on a PCF signed by the HoS and
RVP.
2. Throughout the pay period, a designated school employee must maintain the
School Timesheet file, recording any vacation or leave utilized by salaried
employees.
3. The file must be e-mailed to the Regional Accounting office within one business
day following the close of the pay cycle. This file should be e-mailed the return
receipt function activated. There must be an assigned backup to e-mail this
information in the event the primary person is out of the office.
D. Processing Payroll
1. Employee hours, employee status changes, and vacation or leave utilized will be
entered into the excel School Time Sheet file by the business manager or other
authorized personnel of each school.
2. At the end of each pay period all schools are required to e-mail their Excel School
Time Sheet to the Regional Accounting Office by 5 pm on the day on which the
pay period ends.
3. The Payroll Accountant is required to enter all the payroll details into the Ceridian
Payroll software.
4. The Payroll Accountant also records all manual checks, void checks, adjustments,
and stop payments into the Ceridian Payroll software.
5. Using the Ceridian software the Payroll Accountant will transmit the current pay
information to Ceridian for processing.
6. On the next business day, Ceridian delivers the payroll checks and payroll reports
to the Regional Accounting office. This information is verified for accuracy.
7. The checks are then sent by UPS next day morning delivery to each school. The
authorized person at the school is not permitted to issue the checks to the
employees until the actual payday.
8. Employees enrolled in the direct deposit program will receive a check stub rather
than a payroll check.
9. Once the payroll has been processed, the Regional Accounting Office will make a
journal entry based on department totals in the Sage reporting system to record
the payroll.
10. In cases where Mosaica is funding the schools payroll. The accountant creates
an invoice in the amount of the gross payroll and sends it to the school for
payment.
11. The funding of the payroll is setup as a receivable on Mosaicas books and a
payable on the schools books.
12. The Regional Accounting Office is required to e-mail to the Corporate Office the
details of the payroll entry. This will prevent any discrepancies when Corporate
bills the school for any payroll that was paid by Mosaica.

13. The schools are required to send a check or a wire transfer in the total amount of
the invoice to Mosaica within 30 days.
14. When the funds are received, the Mosaica receivable account and the school
payable account are cleared.
15. Payments of employer taxes and employee tax withholdings are paid by the
payroll processing agency (currently Ceridian) directly to the appropriate
governmental authority. Payments of all other withholdings and benefits are
transmitted by the Regional Accounting Office in accordance with Section IV
above.
E. Manual Checks
1. Express checks are generated by either a request by the school or a correction
made by the Regional Accounting Office.
2. In the case where the request is by the school, a request form must be submitted
detailing the reason for the check and approved by the HoS or the assigned
authorized party at the school. This form must then be e-mailed to the Regional
Accounting Office for processing.
3. In the case where the express check is generated for a correction, the regional
office will e-mail the HoS or authorized party at the school and carbon copy the
VP of Administration of the Regional Office.
4. When requests or corrections are approved, an express check is drawn on the
school bank account. Generally if the documented and approved request is
received in the Regional Accounting Office before 3 pm, the check can be drawn
that day and sent to the school for next day delivery.
5. The Express Check information is automatically reported on the next pay periods
payroll report.
F. Payments to Employees
1. All payments to employees for services rendered must be processed through the
payroll system.
a. It is a conflict of interest for any employee to contract with the school outside
the employment relationship.
b. All bonuses, stipends, after-school wage payments, and other employment
compensation arrangements are to be submitted on a Personnel Action Form
(PAF) bearing the approval of the RVP to the Regional Accounting Office no
later that 5 pm at least two days (48 hours) prior to the Pay Period End (PPE)
in order to be processed and paid with such pay period.
c. These payments are never to be paid from AP or from Petty Cash.
2. All spending for teacher appreciation and/or employee gifts should be approved in
advance by the Board and the RVP and should be only in accordance with the
budget and with laws, rules, and regulations relating to public school spending.
3. Employee Reimbursements

a. No reimbursement for any employee payments shall be made except from a
receipt.
b. Employees using personal or business credit cards must submit receipts to
support all purchases. Any employee purchasing anything on the corporate
card without submitting a receipt shall reimburse the school for the full
amount of the charge.
c. No school employee may sign a check for their own reimbursement for
expenses.
d. All Employee Reimbursements shall be paid from Petty Cash in accordance
with the procedures set forth in Section V above or through Accounts Payable
as set forth in Section IV above.

VII. Managing the Due to MEI Account(s)
A. The Due to MEI Account is used when a payment is made out of the Mosaica bank
account on behalf of a school.
B. Mosaica should be reimbursed for these advances within 4 to 5 business days or such
other period as may be specified in the Management Agreement.
C. In most cases the advances relate to Payroll, Rent and Lease Payments.
D. The Due to MEI Account is made up of the following sub-accounts.
1. Due to MEI Management Fee
2. Due to MEI Rent
3. Due to MEI Payroll
4. Due to MEI Equipment Leases
5. Due to MEI Prior Year Balance
6. Due to MEI Other
E. Mosaica sends an invoice out to the schools for these charges. The Corporate Office
creates the invoice.
F. Before the invoice is sent to the school, the Corporate Office should e-mail a copy of
the invoice to the Regional Accounting Office. The e-mail should provide a detailed
description of the associated charges.
G. In the case of payroll, the Accountant at the Regional Accounting Office will provide
Corporate with their payroll entry. The accountant is to be very clear about the
amount related to Due MEI. They should inform by Corporate ASAP if there are any
discrepancies between the amount to be billed to the school and the amount that was
posted to the G/L.
H. Once the amount of the invoice has been verified, the Regional Accounting Office
should immediately contact the Corporate Office with confirmation of such. The
Corporate Office can then send the invoice to the school for approval to pay.
I. Once payment has been made the Due to MEI account should be cleared.
J. This account must be reconciled on a monthly basis.
K. The Controller or VP of Administration should be notified of amounts outstanding for
more than 60 days and what steps were taken to collect the debt.


VIII. Management Fees
A. For services provide to the schools, Mosaica charges a Management Fee.
1. Management Fees are charged in accordance with the management agreement.
2. They are billed monthly from the corporate office upon receipt of revenue at the
schools. The fees should be posted to the Management Fee account, and are
generally divided 50/50 between Instructional Services and Administrative
Services unless a different allocation is suggested by unique circumstances
relating to a particular school.


IX. Bank Reconciliation
A. Bank Statements
1. Bank statements must be reconciled each month.
2. A copy of the original Bank Statements should be sent to the Regional
Accounting Office and the corresponding School with the original maintained on
file at the school.
3. Bank Statements should be received from the bank within 5 days into the new
month.
4. Online banking access should be available to the Regional Accounting Office
5. The bank statement must be reconciled by the 8
th
business day of the new month.
6. All reconciling items must be clearly documented.
B. Deposits
1. When bank deposits are made, the HoS must complete a Transmittal For
Financial Documents form, attaching all supporting information and forward it to
the Regional Accounting Office within 24hrs.
2. The accountant at the Regional Accounting Office must record the transaction and
file all supporting documentation in the current months cash activity file. This
should include a copy the journal entry.
3. If there is insufficient information, it is the accountants responsibility to contact
the HoS and have them provide the missing information.
4. The cash activity file must be kept in chronological order and clearly labeled. If
the school has multiple accounts, it should be filed individually.
C. Withdrawals
1. The most common bank withdrawals are Wire Transfers, ACH Debit or
Automatic Account sweeps.
2. When these transactions occur, they are initiated by either an invoice from
Mosaica Corporate or at the request of the HoS at the school.
3. These transactions should be recorded on a Transmittal For Financial Documents
form, attaching all supporting information.
D. Reconciling Bank Statement
1. The following documents are required to reconcile the bank account.
a. Bank Statement
b. Copies of cancelled checks where provided by the Bank.
c. All current month Transmittal For Financial Documents Forms
d. G/L Detail Report
e. Cash Management Bank Activity Report

2. Beginning book balance is the prior month ending balance from the G/L cash
account.
3. Reconcile the G/L Detail Report to the Cash Management Bank Activity Report.
4. Reconcile the Credits and Debits on the Bank Statement to the Deposit and
Withdrawals in the Cash Management Bank Activity Report.
5. Any transaction that appears on the Bank Statement and not the Cash
Management Activity Report or vice versa should be researched to identify its
source.
6. Bank transactions that are not on the books that have been identified, an entry
must be made in the Cash Management module in SAGE to record it on the
books.
7. * Please note that the Management Company should have at a minimum
read-only access to the bank accounts in order to expedite the Bank
Reconciliation in real time. An accountant other than the AP Accountant or the
assigned School Accountant shall perform the bank reconciliation.


X. Cash Receipts
A. All mail shall be opened by an employee designated by the HoS or Mosaica.
B. For any checks received, a deposit slip shall be prepared along with a copy of the
check, the check stub, and any other remittance information accompanying the check.
C. At the earliest possible opportunity, the check shall be deposited into the appropriate
bank account.
D. A copy of the deposit slip shall be attached to the copies made in accordance with
paragraph B, above. Original documents shall be retained on file at the school, and a
copy at the Regional Accounting Office.


XI. Month End Closing Schedule
A. The following reports and schedules must be completed and reconciled by the
indicated dates.
1. 1
st
Qtr Financial Statements 10/31
2. Annual Audited Financials Statements 09/30
3. 2
nd
4. 3
rd
5. 4
th
6. General Ledger Detail Report 5
th
business day of the new month
7. Expense analysis (Budget vs Actual) 5
th
8. Bank Reconciliation 8
th
9. Treasurers Report 10
th
10. Accounts Payable Aging Schedule 10
th
11. Due to MEI Reconciliation 15
th

XII. Financial Statement Reporting
A. At the close of each month the Accountant is required to produce Monthly and Year
to Date Financial Statements. Each month the Accountant is to provide the HoS with
a Monthly Financial Statement stating Actual vs. Budget for the previous month and
Actual Year to Date vs. Budget Year to Date. The Financial Statements lists sources
of income and expense categories and includes budget projections in addition to the
previous months expenses for each category.
B. In preparing the Financial Statements, the Accountant must make sure that the
Financial Statements present fairly the financial position, the results of operations and
cash flows are in conformity with generally accepted accounting principles (GAAP).
C. The financial information for these reports is obtained from data generated from the
schools accounting system, monthly payroll entries and AP invoices (including petty
cash entered into the accounting system) provided by the HoS.
D. The statements are to be completed by 10
th
E. The following schedules are required for presentation to the Board at the end of the
month:
1. Income Statement Actual vs Budget for the Month and YTD
2. Comparative Balance Sheet Beginning YTD and Month End
F. The following reports are presented to HoS End of Month Meeting
1. Current Month Variance Report
2. Current Month G/L Trial Balance
3. General Ledger Detail Report
G. The Financial Statements will help the HoS evaluate how the school is doing
financially. Any questions regarding these financial statements must be answered
immediately.


XIII. Board Meetings
A. Purpose - Monthly Board meetings serve as a forum for discussing the school
and the monthly Financial Statements in detail.
B. Attendees - The primary attendees from Mosaica are as follows:
1. RVP Curriculum & Operation
2. Mosaica School Accountant or VP for Administration
3. Such other Mosaica personnel as may be necessary to address specific issues
listed in advance on the agenda for the meeting


XIV. Budgeting, Budget Preparation and Control
A. Budgeting - The School budget is essentially a tool for planning and control as well
as, a yardstick for measuring performance. Revenue projections are based on the
estimated total student enrollment and the estimated number of special educations
students. Revenue sources include: tuition per student, special education funds, start-
up funds (if applicable) grants, bridge loans (if applicable), before/after school
programs and food programs. Expenditure projections include: teacher and staff
payroll and benefits, staff development, curriculum materials supplies, office
supplies, equipment leases, office equipment maintenance, testing materials,
insurance, accounting & legal, field trips, nursing services, security, utilities, rent
allowance, maintenance & repair, marketing, after school program, food/cafeteria,
curriculum and services provided by Mosaica Education, Inc., and contingencies.
B. Budget Preparation
1. Strategic Planning
a. Before preparing a budget there needs to be Board input on school goals for
next fiscal year
b. The Board, upon the recommendation of the HoS, should identify a list of
priorities for the school for the upcoming year. The budget should then
become the financial roadmap for achieving those goals -- or whatever portion
of those goals that the school can afford.
c. At the end of the process, ideally by the end of February, there should be a
Budget Objectives document identifying key strategic objectives for the
school for the upcoming fiscal year. The budget should then be developed as
the financial roadmap for achieving those goals.
1) In setting these goals/objectives, the Board should establish priorities so
that in the development of the budget we are able to say, "Goal A is more
important that Goal B, so therefore we should put the money in line X
rather than line Y."
2) Goals / Objectives should be realistic.
a) The list of goals need not be all that much longer than one might
reasonably expect the school to be able to afford.
b) The list should overreach just enough to be sure that all the critical
issues are on the table.
2. Recommended Budget - Once the goals are done, the HoS, school accountant and
RVP will develop a Recommended Budget a document that should provide
the Board at a minimum with a comparison of the current year budget, the
current year projected actual, and the recommended budget for the upcoming
year.
a. Recommended Budget Ingredients The following should be assembled
and available for reference throughout the Budget Development and Review
process:

1) Budget Schedule developed based on the statutory or regulatory
requirements and working backwards
2) A recent Payroll Register listing all current employees
3) The most recent monthly financial statements together with a projection of
total actual current year activity
4) Copy of the most recent Consolidated Grant Application, together with
any preliminary work that has been done on the upcoming years grants
5) Lease Agreements and Amortization Schedules
6) Real Estate Agreements and Development plans
7) Mortgage/Bond Payment Schedules
8) Revenue Estimates
9) Textbook purchase / replacement plans
10) Equipment purchase / replacement plans
11) Staffing needs
12) Long term contracts / bids / proposals including:
a) Transportation
b) Custodial Services
c) Food Services
d) SPED Services
e) Copier Contracts
f) Insurance
13) Budget forms / memos from
a) Governmental Authorities
b) Authorizers
b. The Recommended Budget should:
1) Include all Door Openers critical items that are essential to the
schools continued operation;
2) Outline the financial steps necessary to move the school toward each of
the highest ranking goals;
3) Be completed in time to submit to the Board for review and consideration
at the Regular April Board Meeting.
3. Budget Revision Following preliminary Board Review, the HoS, the RVP, and
the School Accountant will apply to the extent possible within the limits of a
balanced budget any changes or modifications requested by the Board.

4. Final Budget should be presented to the Board no later than the _______ Board
meeting, in order to insure timely action by the Board before the applicable
deadline.
C. Budget submission / publication School Accountant
1. The approved budget is then sent back to the Regional Office to align the coding
with the chart of accounts.
2. A budget report is then developed to indicate the correct coding for all AR and
AP transactions.
3. After the budget is reviewed and finalized it is sent to the appropriate state agency
or authorizer. No revenues or expenditures should be coded outside of the
approved budgeted line items without the approval of the VP of Administration.
Correct coding ensures that the financial statement accurately reflects the status of
budgeted expenditures and encumbrances.
D. Budget Control
1. The Board of Directors generally: adopts the annual budget, designates
depositories for school fund, enters into contracts of any kind where the amount
involved exceeds $200, fixes salaries or compensation of administrators, teachers,
or other employees of the School, enters into contracts with and makes
appropriations to an intermediate unit, school district or Area
Vocational/Technical School for the charters proportionate share of the cost of
services provided by those entities.
2. The HoS is provided with a board-approved budget with projected revenues and
approved expense amounts. It is essential for the sound financial management of
the School that every effort is made to adhere to the approved budget. Deviations
from budget will be granted only through board approval. Budgets project
revenues for the year as accurately as possible, however, actual school revenue
performance may vary. The HoS is responsible for reviewing the projected
revenue as compared with the actual revenue on a monthly basis so that
adjustments to expenditures can be made accordingly. Using percentages rather
than a dollar amount from the annual school budget allows for more accurate
control of expenses. For example, if the current school revenue (based on
enrollment) is higher than budget, by using the budgeted percentage for each line
item rather than the straight dollar amount, as reflected on the budget, the HoS
can calculate the increase in dollars available for each line item to spend to meet
the needs of the increased enrollment. On the contrary if school revenue is less
than the budgeted dollar amount the HoS can calculate the adjustments needed in
expenditures to reflect the decrease in enrollment.
E. Expense Tracking
1. The accounting program used by MEI offers several reports capable of tracking
expenses for budget compliance. The reports that should be used for expense
tracking are:
a. Maintain Budgets
b. Maintain GL Accounts

c. Invoice History
d. Check History
e. Accounts Payable Aging
f. Accounts Receivable Aging
2. These reports will help the School Accountant, the HoS and VP of Administration
with the necessary tools to monitor budgeted expenses.


XV. Depreciation
A. All equipment purchases shall require the prior approvals specified in Section II
above.
B. The Schools Capitalization Policy is attached hereto as Attachment D, and
incorporated herein by reference:
C. Capital Assets as defined under the Capitalization Policy shall be depreciated over
their useful life.
D. All purchases of property not fitting the definition of a capital asset shall be expensed
in the period of purchase.

XVI. Insurance
A. The School shall maintain appropriate insurance coverage, which, at a minimum shall
include: a) commercial package; b) directors and officers liability; and c) workers
compensation.


XVII. Personal Leave
A. The School shall carry accrued vacation and sick leave on financial statements as
liabilities as necessary in accordance with personnel policy.


XVIII. Real Estate Lease Agreements
A. All schools that are renting or leasing space from Mosaica must enter into a Lease
agreement. The lease agreement provides mandatory terms and conditions required
in any lease of real property by, or on behalf, of Mosaica. If any Special Provisions
are incorporated into the lease agreement, a copy of the Special Provision must be
attached.
B. Copies of all state Leases are kept at the Regional Accounting Offices and at the
schools.
C. Annually the lease payments must be reconciled.


XIX. Fiscal Year End
A. Fiscal calendar start on July 1 and ends on June 30 of the following year.
1. The books must be closed by July 31 of each year
2. Tentative budget finalized by June 30
3. Posting of accruals by July 20
th

4. Audit starts August 30
5. YTD account analysis 10
th
business day into the new month
6. Due to MEI Account reconciled
7. Lease amortization schedule reconciled to the lease payments

XX. Record Retention
A. Record Management is designed to provide control over records from the time of
their creation or receipt to their ultimate disposition
1. Original copies of all invoices, purchase orders, rental agreement and any other
financial documentation are kept at the schools.
2. Copies of these documents are kept in clearly labeled files at the Regional
Accounting Office.
3. All documents are stored and retained on site at the school until the mandatory
retention period has expired in accordance with applicable laws and regulations

XXI. Chart of Accounts
A. A Chart of Accounts prescribed by applicable local regulation, or Authorizer mandate
shall be utilized in the maintenance of all accounting records and budgets. In the
absence of a prescribed Chart of Accounts, the Management Company will utilize an
appropriate Chart sufficient to accurately reflect budget categories and to record and
report all revenues and expenditures.


Attachment A

PETTY CASH REQUEST SLIP
Record #
Date:
Employee Name:
Expenditure:
Amount:
Employee Signature:
Approval Signature:


Attachment B

School
Petty Cash Tracking Log

Date Receipt # Vendor Name Description G/L Code Amount issued
Amount
Reimbursed


Attachment C
Fax Transmittal For Financial Documents

Bank Deposits:
_____ _____ Deposit Slip
_____ _____ Copy of Check(s) deposited
_____ _____ Check Stub(s) for checks deposited
_____ _____ Copy of Remittance Advice or other revenue documentation
Invoices / Petty Cash to be Paid / Reimbursed:
_____ _____ Invoice / Receipt
_____ _____ Signature verifying receipt of goods or services
_____ _____ Signature authorizing payment
Required Information:
Anything else we should know: _______________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Attached Not Available Item
Purpose: Instruction Admin Support Facility
Object: Supplies Cntrct Svcs Travel Equipment
Grant Funding: ______________________________________________


Attachment D
CAPITALIZATION POLICY
Capital expenditure:
Capital expenditure means the cost of the asset including the cost to put it in place. Capital
expenditure for equipment means the net invoice price of the equipment, including cost of any
modifications, attachments, accessories as well as cost of sales tax, transportation incurred or
shipment of external suppliers.
Equipment:
Equipment is non-expendable, tangible, personal property which stands alone, is complete by itself,
does not lose its identity and has a useful life of more than one year.
Capital Equipment:
The following shall be capitalized:
1. items of equipment which have a per unit acquisition cost of $500 or more;
2. items of equipment which are furniture used by students, teachers, or staff;
3. items of computer hardware accessories having a per unit price of $50 or more which are
connected to student, teacher, or staff computers;
4. computer software having a per license price of $500 or more; and
5. textbooks or library books.
Minor Equipment:
All other items of equipment which do not meet the definition of Capital Equipment above shall be
expensed as supplies and materials.
Maintenance and Repair:
Expenditures needed to maintain equipment in a proper operating condition or to restore equipment
to a proper operating condition are expensed.
Computer software:
If software is associated with the specified computer, the software will be depreciated over the same
period as that equipment. In addition, software costing over $500 per license will be capitalized and
depreciated. Except as provided in the preceding sentences, all computer software is expensed.
Depreciation:
Depreciation will be calculated on a straight line basis with the following service life:
Office equipment: 5 years
Office furniture: 7 years
School furniture: 7 years
Computers: 3 years
Computer software: 3 years


Attachment E

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MOSAICA EDUCATION, INC.

FINANCIAL POLICIES AND PROCEDURES

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