BBRI Financial Policies

8/13/2019 BBRI Financial Policies

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BRENTWOOD BIOMEDICAL RESEARCH INSTITUTE

Financial & Accounting PoliciesManual

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Eecti!e Date o Financial an" Accounting PoliciesThe effective date of this manual is January 1, 2001. Several financial policies that existed prior to theadoption of this manual have been incorporated herein and, therefore, remain in effect. If a policy isadded or modified subsequent to this date, the effective date of the ne!revised policy ill beindicated parenthetically immediately folloin" the policy headin".

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TABLE OF CONTENTS

#a"e $umber

Int#o"uction %

$ENERAL POLICIES

Accounting De%a#tent O!e#!ie' 10Internal &ccountin" 'ontrol System 10'orporation 10

(esponsibilities 10

Business Con"uct 11#ractice of )thical *ehavior 11'ompliance ith +as, (e"ulations and 'orporation #olicies 12isciplinary &ction 12

F#au" Polic( 1-Scope 1-#olicy 1-

&ctions 'onstitutin" raud 1-/ther Irre"ularities 1-Investi"ation (esponsibilities 1'onfidentiality 1

&uthority for Investi"ation of Suspected raud 1(eportin" #rocedures1

Secu#it( 1&ccountin" epartment 1

&ccess to )lectronically Stored &ccountin" ata 1Stora"e of *ac3up iles 14eneral /ffice Security 15

$ene#al Le"ge# an" C)a#t o Accounts 16 'hart of &ccounts /vervie 16

istribution of 'hart of &ccounts 16 'ontrol of 'hart of &ccounts 1% &ccount efinitions 1%

'lassification of $et &ssets 21'han"es to the 'hart of &ccounts 21iscal 7ear of 'orporation 21

Journal )ntries 21

Resea#c) Account Polic( 2-'reation of (esearch &ccounts 2-/nership of unds 2-und )xpenditures 2-Termination of (esearch &ccounts 2-istribution of (emainin" unds 2-Transfer of unds from /ne 8arious onors &ccount to &nother 2-

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POLICIES ASSOCIATED WITH RE*ENUES AND CASH RECEIPTS

Re!enue 2(evenue (eco"nition #olicy 2(efunds 29

Cont#i+utions Recei!e" 2efinitions 2istin"uishin" 'ontributions from )xchan"e Transactions 2

&cceptance of 'ontributions 25(estricted 4ifts 25

&cceptance of :onoraria 25&ccountin" for 'ontributions 26Transfer of 4eneral #ost unds 2%(eceipts and isclosures 2%

Billing,In!oicing Policies -1/vervie -1

(esponsibilities for *illin" and 'ollection -1'ustomer Invoicin" -1

&ccounts (eceivable )ntry #olicies -1'lassification of Income and $et &ssets -1

Cas) Recei%ts --/vervie --In3:ouse 'ash (eceipts #rocessin" --)ndorsement of 'hecs --Timeliness of *an eposits --(econciliation of eposits --#rocessin" of 'redit 'ards -

/n3Site 'ollections at 'onferences and Seminars -

Accounts Recei!a+le Manageent -9;onitorin" and (econciliation -9'ollections -9'redits and /ther &dation #rocedures -9(eserve for ?ncollectible &ccounts -

POLICIES ASSOCIATED WITH E-PENDITURES AND DISBURSEMENTS

Pu#c)asing Policies an" P#oce"u#es -5/vervie -5?se of #urchase /rders -5(esponsibility for #urchasin" -5#rocedures for #rocurement of 4oods and Services -5(eimbursement #olicy -6(eceipt and Inventory or ;erchandise -6$on3iscrimination #olicy -%

&uthori>ations and #urchasin" +imits -%

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(equired Solicitation of @uotations from 8endors -%)valuation of &lternative 8endors 0

&ffirmative 'onsideration of ;inority, Small *usiness A =omen3/ned *usiness 1Special #urchasin" 'onditions 1)thical 'onduct in #urchasin" 2'onflicts of Interest #rohibited 2

Political Acti!ities -#rohibited )xpenditures -)ndorsements of 'andidates-#rohibited ?se of 'orporation &ssets and (esources -'ell #hones -

Accounts Pa(a+le Manageent /vervie (ecordin" of &ccounts #ayable

&ccounts #ayable 'ut3off )stablishment of 'ontrol evices 9#reparation of a 8oucher #aca"e 9

#rocessin" of 8oucher #aca"es 9#ayment iscounts 9)mployee )xpense (eports (econciliation of &!# Subsidiary +ed"er to 4eneral +ed"er

T#a!el an" Business Ente#tainent 54eneral #olicy5

&cceptable Travel 5&pproval &uthority 5(elevance of Travel 5

&dvances 5TravelerBs (esponsibility to /btain &pproval 5TravelerBs (esponsibility for )xcess )xpenses 6(eimbursement ocumentation and Time +imit 6Travel #rocedures for **(I )mployees 6Travel (equest #rocedures for 8& )mployees 6

)mployee and irector *usiness Travel %(easonableness of Travel 'osts 90

Special (ules #ertainin" to &ir Travel 90Spouse!#artner Travel 91

$on3reimbursable )xpenditures 91&cceptable )xpenditures 91

BBRI Su%%o#t o# Meetings an" Cone#ences 91

Cas) Dis+u#seent .C)ec/0W#iting1 Policies 9-'hec #reparation 9-'hec Si"nin" 9-;ailin" of 'hecs 98oided 'hecs and Stop #ayments 9(ecord3Ceepin" &ssociated ith Independent 'ontractors 9

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Pa(#oll an" Relate" Policies 99'lassification of =orers as Independent 'ontractors or )mployees 99#ayroll &dministration 95'han"es in #ayroll ata 95#ayroll Taxes 95#reparation of Timesheets 96#rocessin" of Timesheets 96(evie of #ayroll 9%istribution of #ayroll 9%'ompensation for Services (endered by a *oard ;ember 9%

POLICIES PERTAININ$ TO SPECIFIC ASSET AND LIABILIT2 ACCOUNTS

Cas) an" Cas) Manageent 0'ash &ccounts 0*an (econciliation 0'ash lo ;ana"ement 1Stale 'hecs 1#etty 'ash 1

=ire Transfers 1

In!estent Policies 2Introduction 2Investment #olicy 2ele"ation of &uthority 2Investment /b


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POLICIES ASSOCIATED WITH FINANCIAL AND TA- REPORTIN$

Financial Stateents 51Standard inancial Statements of the 'orporation 51requency of #reparation 52(evie and istribution 52Special @uarterly istribution 52

&nnual inancial Statements 52

$o!e#nent Retu#ns 5-/vervie 5-ilin" of (eturns 5-#ublic &ccess to Information (eturns 5

Un#elate" Business Acti!ities 5Identification and 'lassification 5(eportin" 5(IS (eport 5

FINANCIAL MANA$EMENT POLICIES

Bu"geting 55/vervie 55#reparation and &doption 55;onitorin" #erformance 55*ud"et ;odifications 56

Annual Au"it 5%(ole of the Independent &uditor 5%:o /ften to (evie the Selection of the &uditor 5%Selectin" an &uditor 5%

#reparation for the &nnual &udit 5%inance 'ommittee (esponsibilities 61

Insu#ance 62/vervie 62'overa"e 4uidelines 62Insurance efinitions 62

Reco#" Retention 6#olicy 6

Functional E3%ense Allocations 6

/vervie 6irect 'har"in" of 'osts 6&llocation of /verhead 'osts6

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POLICIES ASSOCIATED WTH FEDERAL AWARDS

A"inist#ation o Fe"e#al A'a#"s 65efinitions 65#reparation and (evie of #roposals 65#ost3&ard #rocedures 65'ompliance ith +as, (e"ulations, and #rovisions of &ards 66*illin" and inancial (eportin" 6%#rocurement ?nder ederal &ards 6%'ode of 'onduct %0

;ain" of Sub3aards %0;onitorin" of Sub3recipients %1)quipment and urniture #urchased ith ederal unds %2Standards for inancial ;ana"ement Systems %-*ud"et and #ro"ram (evisions %-'lose /ut of ederal &ards %

C)a#ging Costs to Fe"e#al A'a#"s %9/vervie %9Se"re"atin" ?nalloable from &lloable 'osts %9

'riteria for &lloability %irect 'osts %5Indirect 'osts %5'ost Sharin" and ;atchin" %5

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INTRODUCTION

The folloin" accountin" manual is intended to provide an overvie of the accountin" policies andprocedures applicable to the *rentood *iomedical (esearch Institute, hich shall be referred to asD**(IE or Dthe 'orporationE throu"hout this manual.

BBRI is incorporated in the state of 'alifornia. **(I is exempt from federal income taxes under I('Section 901FcGF-G as a nonprofit, public benefit corporation. The ederal Tax I number is %9316-512.

**(IBs tax3exempt mission isH

To u#t)e# e"ical science +( su%%o#ting an" %#ooting +ioe"ical #esea#c) an"#elate" e"ucational acti!ities at t)e *A $#eate# Los Angeles Healt)ca#e S(ste4 WestLos Angeles Healt)ca#e Cente#5 T)e Co#%o#ation %#o!i"es a le3i+le ec)anis o##esea#c) acti!ities inclu"ing t)e #ecei%t an" a"inist#ation o #esea#c) un"s ot)e# t)an*ete#ans A"inist#ation a%%#o%#iations5

T)e gene#al %u#%oses an" %o'e#s o t)e Co#%o#ation a#e to )a!e an" to e3e#cise all#ig)ts an" %o'e#s cone##e" on non%#oit %u+lic +eneit co#%o#ations un"e# t)e la's ot)e State5 No %olic( o t)e Co#%o#ation s)all +e /no'ingl( ca##ie" out at !a#iance toFe"e#al4 State o# Local aut)o#it(4 o# to t)e coon et)ical %#inci%als o aca"eice"icine5 BBRI is a %#i!ate co#%o#ation4 +ut su+6ect to ce#tain o#s o Fe"e#alo!e#sig)t5

This manual shall document the financial operations of the 'orporation. Its primary purpose is toformali>e accountin" policies and selected procedures for the accountin" staff and to documentinternal controls.

The )xecutive irector and the *oard of irectors approved the contents of this manual as officialpolicy of the 'orporation. &ll **(I employees are bound by the policies herein, and any deviationfrom established policy is prohibited.

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$ENERAL POLICIES

ACCOUNTIN$ DEPARTMENT O*ER*IEW

Inte#nal Accounting Cont#ol S(ste

The safe"uardin" of assets and the reliability of financial records are the primary obation and approval,controls over assets, internal auditin" and all other financial matters. ;ost of **(IBs businesstransactions can be broen don into four stepsH

1. (equisition2. &pproval-. )xecution. (ecordin"

In order to achieve effective internal accountin" control, these functions should be separated, so that

no one person should be in a position here he or she can perform all aspects of a function.

Co#%o#ation

The accountin" department consists of six staff that mana"e and process financial information for**(I. The positions comprisin" the accountin" department of **(I, and the abbreviations of eachposition used throu"hout this manual, are as follosH

'hief inancial /fficer F'/G&ccount Supervisor F&SGStaff &ccountant FS&G

&ccountin" 'ler F&'G

#urchasin" &"ent F#&Ginancial &nalyst F&G

/ther officers and employees of **(I ho have financial responsibilities, and the abbreviations ofeach position used throu"hout this manual, are as follosH

)xecutive irector F)G:uman (esource ;ana"er F:(;GTreasurer FT(Ginance 'ommittee*oard of irectors F*oardG

Res%onsi+ilities

The primary responsibilities of the accountin" department consist ofH

4eneral +ed"er*ud"etin"'ash and Investment ;ana"ement

&sset ;ana"ementinancial ;ana"ement of 4rants and 'ontracts#urchasin"

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&ccounts (eceivable and *illin" 'ash (eceipts &ccounts #ayable 'ash isbursements #ayroll and *enefits inancial Statement #rocessin"

)xternal (eportin" of inancial Information*an (econciliation(econciliation of Sub3+ed"ers'ompliance ith 4overnment (eportin" (equirements

&nnual &udit

BUSINESS CONDUCT

P#actice o Et)ical Be)a!io#

?nethical actions, or the appearance of unethical actions, are unacceptable under any conditions.The policies and reputation of **(I depend to a very lar"e extent on the folloin" considerations.

)ach employee must apply her!his on sense of personal ethics, hich should extend beyondcompliance ith applicable las and re"ulations in business situations, to "overn behavior here noexistin" re"ulation provides a "uideline. It is each employees responsibility to apply common sense inbusiness decisions here specific rules do not provide all the ansers.

In determinin" compliance ith this standard in specific situations, employees should as themselvesthe folloin" questionsH

1. Is my action le"al

2. Is my action ethical

-. oes my action comply ith **(I policy

. &m I sure my action does not appear inappropriate

9. &m I sure that I ould not be embarrassed or compromised if my action became non iththe 'orporation or publicly

. &m I sure that my action meets my personal code of ethics and behavior

)ach employee should be able to anser, KyesK to all of these questions before tain" action.

)ach irector, ;ana"er and supervisor is responsible for the ethical business behavior of her!hissubordinates. irectors, ;ana"ers and supervisors must ei"h carefully all courses of actionsu""ested in ethical as ell as economic terms, and base their final decisions on the "uidelinesprovided by this policy as ell as their personal sense of ri"ht and ron".

Co%liance Wit) La's4 Regulations an" Co#%o#ation Policies

**(I does not tolerate the illful violation or circumvention of any ederal, state, local, or forei"n laby an employee durin" the course of that persons employmentL nor does the 'orporation tolerate the

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disre"ard or circumvention of **(I policy or en"a"ement in unscrupulous dealin"s. )mployeesshould not attempt to accomplish by indirect means, throu"h a"ents or intermediaries, that hich isdirectly forbidden.

Implementation of the provisions of this policy is one of the standards by hich the performance of alllevels of employees ill be measured.

Disci%lina#( Action

ailure to comply ith the standards contained in this policy ill result in disciplinary action that mayinclude termination, referral for criminal prosecution, and reimbursement to the 'orporation or to the"overnment, for any loss or dama"e resultin" from the violation. &s ith all matters involvin"disciplinary action, principals of fairness ill apply. &ny employee char"ed ith a violation of thispolicy ill be afforded an opportunity to explain her!his actions before disciplinary action is taen.

isciplinary action ill be taenH

1. &"ainst any employee ho authori>es or participates directly in actions that are a violation ofthis policy.

2. &"ainst any employee ho has deliberately failed to report a violation or deliberately ithheldrelevant and material information concernin" a violation of this policy.

-. &"ainst any irector, ;ana"er or supervisor ho attempts to retaliate, directly or indirectly, orencoura"es others to do so, a"ainst any employee ho reports a violation of this policy.

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FRAUD POLIC2

Sco%e

This policy applies to any fraud or suspected fraud involvin" employees, officers or directors, as ell

as members, vendors, consultants, contractors, fundin" sources and!or any other parties ith a

business relationship ith **(I. &ny investi"ative activity required ill be conducted ithout re"ard to

the suspected ron"doerBs len"th of service, position!title, or relationship ith **(I.

Polic(

;ana"ement is responsible for the detection and prevention of fraud, misappropriations, and other

irre"ularities. raud is defined as the intentional, false representation or concealment of a material fact

for the purpose of inducin" another to act upon it to his or her in


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In!estigation Res%onsi+ilities

The )xecutive irector has the primary responsibility for the investi"ation of all suspected fraudulent

acts as defined in the policy. The ) may utili>e hatever internal and!or external resources s!he

considers necessary in conductin" an investi"ation. If an investi"ation substantiates that fraudulent

activities have occurred, the &udit 'ommittee ill issue reports to appropriate desi"nated personnel

and, if appropriate, to the **(I *oard of irectors and!or concerned 8eterans &dministration officials.

ecisions to prosecute or refer the examination results to the appropriate la enforcement and!or

re"ulatory a"encies for independent investi"ation ill be made in con


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concernin" the status of an investi"ation ill be "iven out. The proper response to any inquiry is DI am

not at liberty to discuss this matter.E ?nder no circumstances should any reference be made to Dthe

alle"ationE, Dthe crimeE, Dthe fraudE, Dthe for"eryE, Dthe misappropriationE, or any other specific

reference.

The reportin" individual should be informed of the folloin"H

1. o not contact the suspected individual in an effort to determine facts or demand restitution.

2. o not discuss the case, facts, suspicions, or alle"ations ith anyone unless specifically ased

to do so by **(IBs le"al counsel or the )xecutive irector.

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SECURIT2

Accounting De%a#tent

& loc ill be maintained on the door leadin" into the **(I &ccountin" epartment. This door shall be

closed and loced in the evenin"s and henever the &ccountin" epartment is vacant. The

ey!combination to this loc ill be provided to all accountin" personnel and the executive director. &ll

eys to **(I offices ill be obtained from any employee ho leaves **(IBs employment, before a

final paychec ill be issued. If eys are not returned for any reason, the loc to the &ccountin" office

ill be chan"ed.

The **(I corporate seal ill be ept loced in the )Bs office and blan chec stoc shall be stored in

a fireproof file cabinet in the &ccountin" epartment. This cabinet ill be loced ith a ey that is ept

in the &ccountin" epartment. &ccess to this file cabinet shall be by eys in the possession of the

'/, &ccountin" Supervisor and Staff &ccountant.

#etty cash is stored in a draer loced ith a ey. The :uman (esource ;ana"er and the )xecutive

irector ill be the only employees ith eys to the petty cash draer.

Access to Elect#onicall( Sto#e" Accounting Data

It is the policy of **(I to utili>e passords to restrict access to accountin" softare and data. /nly

duly authori>ed accountin" personnel ith data input responsibilities ill be assi"ned passords that

allo access to the system.

&ccountin" personnel are expected to eep their passords secret and to chan"e their passords on

a re"ular basis, no less frequently than quarterly. &dministration of passords shall be performed by

the '/.

)ach passord enables a user to "ain access to only those softare and data files necessary for

each employees required duties.

Sto#age o Bac/0U% Files

It is the policy of **(I to maintain bac3up copies of electronic data files off3site in a secure, fire3

protected environment. &ccess to bac3up files shall be limited to individuals authori>ed by

mana"ement. The '/ shall be responsible for bacin" up all accountin" data at the end of each

orday. *acup database files shall be maintained on a separate server as ell as on hard copy.

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$ene#al Oice Secu#it(

urin" normal business hours, all visitors are required to chec in at the front des. &fter hours, all

internal offices are to be loced and all computer orstations are to be shut don.

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$ENERAL LED$ER AND CHART OF ACCOUNTS

The "eneral led"er is defined as a "roup of accounts that supports the information shon in the maeroed out, but

real accounts are permanent.

& to3di"it type number and a four3di"it classification code shall precede each account number.

Dist#i+ution o C)a#t o Accounts

&ll **(I employees involved ith account codin" responsibilities Fassi"nment or revie of codin"G or

bud"etary responsibilities ill be issued a current chart of accounts. &s the chart of accounts is

revised, an updated copy of the chart of accounts shall be distributed to these individuals promptly.

Cont#ol o C)a#t o Accounts

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**(IBs chart of accounts is monitored and controlled by the 'hief inancial /fficer. (esponsibilities

include the handlin" of all account maintenance, such as additions and deletions. &ny additions or

deletions of accounts should be approved by the '/, ho ensures that the chart of accounts is

consistent ith the 'orporate structure of **(I and meets the needs of each division and

department.

Account Deinitions

4eneral +ed"er

&ccount (an"e 'ate"ory efinition

1000 3 1%%% Assets

&ssets are probable future economic benefits obtained or

controlled by the 'orporation as a result of past transactions or

events. &ssets of )xample $#/ are classified as current assets,

fixed assets, contra3assets, and other assets.

'urrent assets are assets that are available or can be made

readily available to meet the cost of operations or to pay current

liabilities. Some examples are cash, temporary investments, and

receivables that ill be collected ithin one year of the statement

of financial position date.

ixed assets are tan"ible assets ith a useful life of more than

one year that are acquired for use in the operation of the

'orporation and are not held for resale.

'ontra3assets are accounts that reduce asset accounts, such asaccumulated depreciation and reserves for uncollectible accounts

receivable

/ther assets include lon"3term assets that are assets acquired

ithout the intention of disposin" them in the near future. Some

examples are security deposits, property and lon"3term

investments.

2000 P 2%%% Lia+ilities

+iabilities are probable future sacrifices of economic benefits

arisin" from present obli"ations of the 'orporation to transfer

assets or provide services to other entities in the future as a

result of past transactions or events. +iabilities of **(I are

classified as current or lon"3term.

'urrent liabilities are probable sacrifices of economic benefits

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that ill liely occur ithin one year of the date of the financial

statements or hich have a due date of one year or less.

'ommon examples of current liabilities include accounts payable,

accrued liabilities, short3term notes payable, and deferred

revenue.

+on"3Term +iabilities are probable sacrifices of economic benefits

that ill liely occur more than one year from the date of the

financial statements. &n example is the non3current portion of a

mort"a"e loan.

-000 3 -%%% Net Assets

$et &ssets is the difference beteen total assets and total

liabilities. See the next section for **(IBs policies on classifyin"

net assets.

000 3 %%% Re!enues

(evenues are inflos or other enhancements of assets, orsettlements of liabilities, from deliverin" or producin" "oods,

renderin" services, or other activities that constitute an

'orporationBs on"oin" ma


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Classiication o Net Assets

$et assets of the 'orporation shall be classified based upon the existence or absence of donor3

imposed restrictions as follosH

Un#est#icte" Net Assets3 $et assets that are not sub


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1. epreciation of fixed assets

2. &morti>ation of prepaid expenses

-. &ccretion of discounts on promises to "ive

. &ccruals of recurrin" expenses

9. &morti>ation of deferred revenue

Support for recurrin"


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RESEARCH ACCOUNT POLIC2

C#eation o Resea#c) Accounts

**(I may create a research account only in con


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mae any claim for compensation from **(I or the 8&.

POLICIES ASSOCIATED WITH RE*ENUES AND CASH RECEIPTS

RE*ENUE

Sou#ce o Re!enue

The sources of funds may be "rants, contracts or "ifts from for3profit companies, charitable

foundations, the #ublic :ealth Service or other ederal a"encies, professional societies or other

nonprofit entities, and individuals. *ecause the only statutory purpose of the 'orporation is to facilitate

8& research, all funds expended by the 'orporation must be related to approved 8& research

activities

Re!enue Recognition Polic(

**(I receives revenue from several types of transactions. (evenue from each of these types of

transactions is reco"ni>ed in the financial statements of **(I in the folloin" mannerH

1. O!e#)ea"P ees char"ed to corporate sponsors, foundations and donors that cover the cost

of settin" up and administerin" their research proed as income hen theconference is held

9. S%onso#s)i%s3 (eco"ni>ed as income hen received, unless accompanied by restrictions or

conditions Fsee the next section on contribution incomeG

. Cont#i+utions 3 (eco"ni>ed as income hen received, unless accompanied by restrictions or

conditions Fsee the next section on contribution incomeG

5. IRB ees 8 ees char"ed to corporate sponsors to cover the cost of Institutionsl (evie *oard

revie and approval

&ll corporate sponsored research contracts administered by **(I are assessed at the rate of 20Q of

the amount #ecei!e" from that contract. ?nless otherise ne"otiated, all other **(I pro


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Reun"s

The folloin" policies apply to refunds associated ith revenue collected by **(IH

Conferences and Seminars:

1. or cancellations received by **(I at least -0 days prior to a conference or seminar, a full

refund, less a N90 processin" fee, ill be provided to the re"istrant.

2. or cancellations received less than -0 days prior to a conference or seminar, a credit toards

attendance at a future conference or seminar ill be provided.

-. $o refunds or credits ill be provided for no3shos and cancellation notifications received after

the conference or seminar is held.

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CONTRIBUTIONS RECEI*ED

Deinitions

The folloin" definitions shall apply ith respect to the policies described in this sectionH

Cont#i+ution3 &n unconditional transfer of cash or other assets to the 'orporation, or a settlement or

cancellation of the 'orporations liabilities, in a voluntary nonreciprocal transfer by another entity

actin" other than as an oner.

Con"ition3 & donor3imposed stipulation that specifies a future and uncertain event hose occurrence

or failure to occur "ives the promisor a ri"ht of return of the assets it has transferred to the

'orporation or releases the promisor from its obli"ation to transfer its assets.

Rest#iction3 & donor3imposed stipulation that specifies a use for the contributed asset that is morespecific than broad limits resultin" from the nature of the 'orporation, the environment in hich it

operates, and the purposes specified in **(IBs articles of incorporation and bylas. (estrictions on

**(IBs use of an asset may be temporary or permanent.

Non#eci%#ocal T#anse#3 & transaction in hich an entity incurs a liability or transfers assets to **(I

ithout directly receivin" value from **(I in exchan"e.

P#oise to $i!e3 & ritten or oral a"reement to contribute cash or other assets to **(I.

E3c)ange T#ansaction3 & reciprocal transaction in hich **(I and another entity each receive and

sacrifice somethin" of approximately equal value.

Distinguis)ing Cont#i+utions #o E3c)ange T#ansactions

**(I receives income in the form of contributions, revenue from exchan"e transactions, and income

from activities ith characteristics of both contributions and exchan"e transactions. **(I shall

consider the folloin" criteria, and any other relevant factors, in determinin" hether income ill be

accounted for as contribution income, exchan"e transaction revenue, or bothH

1. **(IBs intent in solicitin" the asset, as stated in the accompanyin" materialsL

2. The expressed intent of the entity providin" resources to **(I Fi.e. does the resource provider

state its intent is to support **(IBs pro"rams or that it anticipates specified benefits in

exchan"eGL

-. =hether the method of delivery of the asset is specified by the resource provider Fexchan"e

transactionG or is at the discretion of **(I FcontributionGL

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. =hether payment received by **(I is determined by the resource provider FcontributionG or is

equal to the value of the assets!services provided by **(I, or the cost of those assets plus a

marup Fexchan"e transactionGL

9. =hether there are provisions for penalties Fdue to nonperformanceG beyond the amount of

payment Fexchan"e transactionG or hether penalties are limited to the delivery of assets

already produced and return of unspent funds FcontributionGL and

. =hether assets are to be delivered by **(I to individuals or 'orporations other than the

resource provider FcontributionG or hether they are delivered directly to the resource provider

or to individuals or 'orporations closely connected to the resource provider.

Acce%tance o Cont#i+utions

unds may be accepted by the 'orporation from such sources as ederal or private nonprofit

a"encies en"a"ed in the support of research and!or 8& related education from commercial

or"ani>ations involved in the development of ne dru"s and devices or in the support of medical

research and!or education, Din lieu ofE honoraria or consultantBs fees obtained elsehere or frompersonal contributions by members of the corporation, or from "roups or individuals to defray the

costs of scientific meetin"s, teachin" sessions or other le"itimate academic functions. &ll checs must

be made payable to the 'orporation. $o to party checs should be accepted. unds donated in

support of a particular activity can be accepted only if the responsible investi"ator holds an

appointment at the 4+& 8& ;edical 'enter.

Rest#icte" $its

*efore acceptin" any restricted donation, the )xecutive irector shall revie the conditions the donor

ishes to impose on the investi"ator and!or 'orporation in terms of ho the funds can be used. The

) should authori>e acceptance of the "ift only hen s!he is satisfied that the conditions can be met,le"ally, ethically and or"ani>ationally. The donorBs letter settin" forth the restrictions should also

contain a clause authori>in" **(I to utili>e any residual funds as it sees fit in the event the concerned

investi"ator should leave the 8& before completin" the pro


28/98

honoraria derived by an investi"ator ho as on annual leave. **(I policy requires a letter from the

investi"ator that states that s!he as on annual leave before the honoraria ill be accepted for

deposit into his or her account.

&ny honoraria derived by an investi"ator durin" their 8& tour of duty or 8& authori>ed absence must

be accompanied by a letter that states the honorarium is a donation to **(I. The investi"ator cannot

use these moniesL nor can the investi"ator have control over the honoraria donation.

Accounting o# Cont#i+utions

**(I shall reco"ni>e contribution income in the period in hich the 'orporation receives restricted or

unrestricted assets in nonreciprocal transfers, or unconditional promises of future nonreciprocal asset

transfers, from donors. 'ontribution income shall be classified as increases in unrestricted,

temporarily restricted, or permanently restricted net assets based on the existence or absence of such

restrictions.

?nconditional promises to "ive shall be recorded as assets and increases in temporarily restricted net

assets Fcontribution incomeG of **(I in the period that **(I receives evidence that a promise tosupport the 'orporation has been made. ?nconditional promises to "ive that are to be collected ithin

one year shall be recorded at their face value, less any reserve for uncollectible promises, as

estimated by mana"ement. ?nconditional promises to "ive that are collectible over time periods in

excess of one year shall be recorded at their discounted net present value. &ccretion of discount on

such promises to "ive shall be recorded as contribution income in each period leadin" up to the due

date of the promise to "ive. The interest rate that shall be used in calculatin" net present values of

unconditional promises to "ive is the ris3free rate of return available to **(I at the time the

'orporation receives a promise from a donor.

=hen the final time or use restriction associated ith a contributed asset has been met, a

reclassification beteen temporarily restricted and unrestricted net assets shall be recorded.

=hen it receives support in the form of volunteer labor, **(I shall record contribution income and

assets or expenses if one of the folloin" to criteria is metH

1. The contributed service creates or enhances a non3financial asset Fsuch as a buildin" or

equipmentG, or

2. The contributed service possesses all three of the folloin" characteristicsH

a. It is the type of service that ould typically need to be purchased by **(I if it had not

been contributed,

b. It requires speciali>ed sills Fi.e. formal trainin" in a trade or professionG, and

c. It is provided by an individual possessin" those speciali>ed sills.

'ontributed services that meet one of the to precedin" criteria shall be recorded at the fair maret

value of the service rendered.

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29/98

T#anse# o $ene#al Post Fun"s

-6 ?.S.'. Section 12 allos funds donated to the 8& medical center Rs 4eneral #ost und for

"eneral 8& research purposes to be transferred to the 'orporation. /ther funds donated to the

4eneral #ost unds for a specific research proations from the donors to the 8&

iscal Service.

=hen this has been approved, the funds ill be ithdran from the medical center and the

'orporation ill receive a chec. The &ccountin" epartment shall mae a note of the exact amount

of the balance that **(I ill receive as the 8& does not alays send a notification or correspondence

ith the chec to identify hy the chec is sent.

Recei%ts an" Disclosu#es

**(I and its donors are sub


30/98

maret value of the "oods or services provided to the donor by **(I.

I(S rules provide for certain exceptions to the precedin" disclosure rules applicable to quid pro quo

transactions. &s such, **(I shall not provide receipts hen it receives cash or property in excess of

N59 in any of the folloin" circumstancesH

1. The "oods provided to the donor durin" 2000 bear **(IBs name or lo"o and have an

a""re"ate cost of N5.0 or lessL

2. The "oods provided to the donor in 2000 have a fair maret value equal to no more than 2Q of

the contribution or N5, hichever is lessL or

-. The "ift received by **(I resulted from the 'orporations 2000 fundraisin" appeal that

included articles orth no more than N5.0, as ell as a request for contributions and a

statement that the recipient may eep the article even if a contribution is not made.

The I(S on an annual basis ad


31/98

BILLIN$,IN*OICIN$ POLICIES

O!e#!ie'

The folloin" is a list of items billed and!or accrued and received by **(I and the frequency ith

hich each is billedH

Monthly or Quarterly Billings

1. 4rants and contracts

2. 'onferences and seminars

Res%onsi+ilities o# Billing an" Collection

**(IBs &ccountin" epartment is responsible for the invoicin" of "oods and services as ell as the

collection of outstandin" receivables. F$oteH 'ash receipts, credit memo, and collection policies ill

be discussed in subsequent sectionsG.

Accounts Recei!a+le Ent#( Policies

#ostin" of customer invoices to the accounts receivable subsidiary led"er of shall be performed by

individuals independent of the cash receipts function of **(I.

#ostin" of credit memos and other ade the funds for a specific purpose or ithin a specified time period identified by the donor of

the funds. =hen this form of contribution income is received, **(I shall classify this income as

Temporarily (estricted income.

&s ith all Temporarily (estricted net assets, hen the restriction associated ith a contribution has

been met Fdue to the passin" of time or the use of the resource for the purpose desi"nated by the

donorG, **(I ill reclassify the related net assets from KTemporarily (estrictedK to K?nrestrictedK in its

Statement of inancial #osition and reflect this reclassification as an activity in its Statement of

&ctivities.

rom time to time, the **(I *oard of irectors may determine that it is appropriate to set funds aside

31


32/98

for specific pro


33/98

CASH RECEIPTS

O!e#!ie'

'ash Fincludin" checs payable to the 'orporationG is the most liquid asset an 'orporation has.

Therefore, it is the ob


34/98

P#ocessing o C#e"it Ca#"s

**(I accepts ;aster'ard, 8isa and &merican )xpress credit cards for payment, all of hich are

authori>ed throu"h the participatin" credit card company. olloin" the credit card authori>ation

instructions from the participatin" credit card company does this.

or all credit card payments, **(I ill document the folloin" informationH

1. 'ustomer!'orporation name, address and phone number

2. $ame of credit cardholder

-. &ddress of cardholder

. 'redit card number

9. )xpiration date

/ne individual desi"nated by the 'hief inancial /fficer shall perform all credit card processin". This

individual shall be independent of the accounts receivable function.

On0Site Collections at Cone#ences an" Seina#s

'ash, chec and credit card payments may be accepted at conferences and seminars for payment of

re"istration fees. The folloin" policies apply to the processin" of on3site paymentsH

1. 'ashier duties are se"re"ated from the processin" of re"istrations

2. & special, multi3part, on3site re"istration form is utili>edL these forms shall be pre3numbered

and accounted for

-. /ne part of the re"istration form is returned to the re"istrant as a receipt for payment

. &t the end of each day, a reconciliation of collections to the re"istration database and pre3

numbered receipts shall be performed

9. &ll documentation associated ith these transactions is brou"ht bac and turned in to the

accountin" department immediately folloin" the conference or seminar. This documentation

ill include the actual checs collected, and any credit card char"e slips. Thereafter, deposits

are processed as described earlier in this section.

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35/98

ACCOUNTS RECEI*ABLE MANA$EMENT

Monito#ing an" Reconciliations

/n a monthly basis, a detailed accounts receivable report Fshoin" a"ed, outstandin" invoices by

customerG is "enerated and reconciled to the "eneral led"er by the accountin" department. &ll

differences are immediately investi"ated and resolved, and the reconciliation is revieed by the 'hief

inancial /fficer.

Collections

'ollections are performed on a monthly basis, accordin" to a revie of the outstandin" items shon

on the accounts receivable a"in" report. This report shos the current monthBs activity for each

customer and prior monthsB balances outstandin" for -0, 0, %0, and 120 days.

'ustomers ith unpaid balances receive statements every thirty days. &fter a balance is unpaid for 0

days, an accountin" department employee ill contact the customer by telephone and attempt tocollect the amount due. & record ill be ept of all telephone contacts.

If %0 days have elapsed ithout payment, a statement ill be sent to the customer requestin"

payment or documentation that payment has already been made. In addition, eely telephone calls

ill be placed in an attempt to collect the amount due.

If 120 days have passed ithout payment, the account may be turned over to a collection a"ency or

the 'orporationBs attorney.

C#e"its an" Ot)e# A"6ustents to Accounts Recei!a+le

rom time to time, credits a"ainst accounts receivable from transactions other than payments and bad

debts ill occur. )xamples of other credits include returned products and ad


36/98

advised to ensure that further credit is not "ranted and to update the master list of bad accounts.

'ustomers listed as poor credit riss ill be extended future credit only if the bac debt is paid and the

customer is no lon"er deemed a collection problem.

If rite3off procedures have been initiated, the folloin" accountin" treatment appliesH

1. 'urrent year invoices that are ritten off ill either be char"ed a"ainst an appropriate revenue

or revenue ad


37/98

POLICIES ASSOCIATED WITH E-PENDITURES AND DISBURSEMENTS

PURCHASIN$ POLICIES AND PROCEDURES

O!e#!ie'

It is the policy of **(I to follo a practice of ethical, responsible and reasonable procedures related

to purchasin", a"reements and contracts, and related forms of commitment. The policies in this

section describe the principals and procedures that all staff shall adhere to in the completion of their

desi"nated responsibilities.

Use o Pu#c)ase O#"e#s

It is the policy of **(I to utili>e a purchase order system. & properly completed purchase order shall

be required for all purchases of "oods and services, ith the exception of travel advances and

expense reimbursements, hich require the preparation of a separate form described elsehere inthis manual.

The #urchasin" &"ent usin" the purchasin" module of the 'ost #oint &ccountin" System shall issue

purchase order numbers.

Res%onsi+ilit( o# Pu#c)asing

#rincipal Investi"ators ho have open accounts ith sufficient fund balances shall have the authority

to initiate purchases on behalf of their departments, ithin the "uidelines described in this policies

manual. In addition, #IBs may dele"ate purchasin" authority to responsible individuals ithin their

department. #IBs shall inform the accountin" department of all individuals that may initiate purchases

or prepare purchase orders. The accountin" department shall maintain a current list of all staff that

has si"nature authority for their respective #IBs.

The accountin" department shall be responsible for processin" purchase orders. The 'hief inancial

/fficer has approval authority over all purchases and contractual commitments requested by #IBs.

The )xecutive irector shall mae the final determination on any proposed purchases here

bud"etary or other conditions may result in denial.

P#oce"u#es o# P#ocu#eent o $oo"s an" Se#!ices

It is **(IBs "oal to place all orders for equipment, supplies and services ithin one business day after

receivin" a completed #urchase /rder (equested form. The folloin" procedures are intended to

insure timely and accurate placement of all orders and to avoid problems ith delivery and payment to

vendorsH

Su+sc#i%tions an" Me+e#s)i%s

)xpenditures for continued education, includin" scientific boos, conferences and re"istration fees,

etc., specifically relatin" to a research activity may be requested by submittin" the appropriate

paperor to **(I. The )xecutive irector may pay subscriptions or professional association dues,

37


38/98

ith the exclusion of license fees, from appropriate research or 8arious onors funds upon approval.

$ormally, professional association dues ill not be paid unless doin" so is a requirement for obtainin"

the desired subscription to a professional publication or a discounted re"istration fee for a

professional conference.

P#oce"u#e

1. &ll requests for purchases must be submitted on a **(I #?(':&S) /()( ()@?)ST

form. orms are available at **(I or on the 8& Intranet.2. &ll forms must provide the folloin" informationH

a. The fund account number to be char"ed for the purchase

b. #rincipal Investi"atorBs name

c. 8& #roation. **(I ill not reimburse any individual for the unauthori>ed purchase of "oods or

equipment that ill be stored anyhere off =+& 8& property. &ny exception to this policy must have

the ritten approval of the **(I )xecutive irector before the purchase is made. &ny equipment

approved for off site stora"e must be personally inspected and ta""ed ith a **(I property ta" by the

#urchasin" &"ent. **(I ill not reimburse for any "oods or services that are purchased for the

primary benefit of an individual. )quipment such as personal computers and peripherals that are

purchased for home use are assumed to be for the personal benefit of the purchaser and ill not be

authori>ed for purchase or reimbursement.

Recei%t an" In!ento#( o Me#c)an"ise

?pon placin" an order, the #& ill provide the #I ith a "oldenrod copy of #urchase /rder. =hen the

order is received and inventoried by the #I or his!her authori>ed representative, the "oldenrod copy is

to be si"ned and dated on the :ALL ITEMS RECEI*ED< line and returned to **(I as soon as the

38


39/98

order is received and accepted. & si"ned and dated #acin" Slip is also acceptable in lieu of the

"oldenrod as verification of receipt of the order.

**(I ill not pay the vendor until it is in receipt of the si"ned and dated "oldenrod or pacin" slip

shoin" that the itemFsG have been delivered.

&ll returns of #urchase /rder equipment, supplies or "oods or other problems ith orders shipped by

vendors ;?ST be handled throu"h the **(I &ccountin" epartment. This is to ensure proper billin"

of the #IBs fund accounts and avoid confusion.

Non0Disc#iination Polic(

&ll vendors!contractors ho are the recipients of 'orporation funds, or ho propose to perform any

or or furnish any "oods under a"reements ith **(I shall a"ree to these important principalsH

1. 8endors!'ontractors ill not discriminate a"ainst any employee or applicant for employment

because of race, reli"ion, color, sexual orientation or national ori"in, except here reli"ion,

sex, or national ori"in is a bona fide occupational qualification reasonably necessary to the

normal operation of the vendors!contractors.

2. 8endors!contractors a"ree to post in conspicuous places, available to employees and

applicants for employment, notices settin" forth the provisions of this non3discrimination

clause. $otices, advertisement and solicitations placed in accordance ith ederal la, rule or

re"ulation shall be deemed sufficient for meetin" the intent of this section.

Aut)o#i9ations an" Pu#c)asing Liits

&ll completed purchase orders must be si"ned by the #rincipal Investi"ator and approved by the

&ccountin" epartment. In addition, the )xecutive irector must approve all purchases that are to be

paid from 8arious onors accounts.

&ll contracts in excess of N10,000 beteen **(I and outside parties must be revieed and approved

by the )xecutive irector. The *oard must approve any contract that ill require the expenditure of

over N29,000 of **(I &dministrative funds in a sin"le fiscal year.

Re=ui#e" Solicitation o >uotations #o *en"o#s

#urchases in excess of N10,000 for labor, equipment, supplies or services purchased, leased or

contracted for shall be made only after receivin", henever possible, oral quotations from at least

three F-G vendors.

)xpenditures exceedin" N29,000 for labor, equipment, supplies or services purchased, leased or

contracted for shall be made only after receivin" henever possible, ritten quotations from at least

three F-G vendors. Specific selections shall be recommended, via the epartment irectors, to the

irector of inance for approval ith ritten quotations attached for revie. (ecommendations shall

be based on consideration of all applicable criteria as described under D)valuation of &lternative

8endorsE belo.

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40/98

Solicitations for "oods and services Frequests for proposalsG should provide for all of the folloin"H

1. & clear and accurate description of the technical requirements for the material, product or

service to be procured. In competitive procurements, such a description shall not contain

features, hich unduly restrict competition.

2. (equirements that the bidder must fulfill and all other factors to be used in evaluatin" bids or

proposals Fsee the next section entitled D)valuation of &lternative 8endorsE for requiredcriteriaG

-. & description, henever practicable, of technical requirements in terms of functions to be

performed or performance required, includin" the ran"e of acceptable characteristics or

minimum acceptable standards.

. The specific features of Kbrand name or equalK descriptions that bidders are required to meet

hen such items are included in the solicitations.

9. The acceptance, to the extent practicable and economically feasible, of products and services

dimensioned in the metric system of measurement.

. #reference, to the extent practicable and economically feasible, for products and services that

conserve natural resources and protect the environment and are ener"y efficient.

5. & description of the proper format, if any, in hich proposals must be submitted.

E!aluation o Alte#nati!e *en"o#s

It is the policy of **(I to request ritten proposals from at least three vendors for all purchases that

ill exceed N29,000. &lternative vendors shall be evaluated on a ei"hted scale that considers the

folloin" criteriaH

1. &dequacy of the proposed methodolo"y of the vendor

2. Sill and experience of ey personnel

-. emonstrated company experience

. /ther technical specifications Fdesi"nated by department requestin" proposalsG

9. 'ompliance ith administrative requirements of the request for proposal Fformat, due date,

etc.G

. 8endorBs financial stability

5. 8endorBs demonstrated commitment to the nonprofit sector

6. (esults of communications ith references supplied by vendor

%. &bility!commitment to meetin" time deadlines

10. 'ost

11. ;inority3 or omen3oned business status of vendor

12. /ther criteria Fto be specified by department requestin" proposalG

$ot all of the precedin" criteria may apply in each purchasin" scenario. :oever, in each situation

requirin" consideration of alternative vendors, the department responsible for the purchase shall

establish the relative importance of each criterion prior to requestin" proposals and shall evaluate

40


41/98

each proposal on the basis of the criteria and ei"htin" that have been determined.

&fter a vendor has been selected and approved by a #I, the )xecutive irector prior to enterin" into a

contract shall approve the final selection.

Ai#ati!e Consi"e#ation o Mino#it(4 Sall Business an" Woen0O'ne" Businesses

#ositive efforts shall be made by **(I to utili>e small businesses, minority3oned firms, and omens

business enterprises, henever possible. The folloin" steps shall be taen in furtherance of this

"oalH

1. )nsure that small business, minority3oned firms, and omens business enterprises are used

to the fullest extent practicable.

2. ;ae information on forthcomin" opportunities available and arran"e time frames for

purchases and contracts to encoura"e and facilitate participation by small business, minority3

oned firms and omens business enterprises.

-. 'onsider in the contract process hether firms competin" for lar"er contracts tend to

subcontract ith small businesses, minority3oned firms and omens business enterprises.

. )ncoura"e contractin" ith consortiums of small businesses, minority oned firms and

omens business enterprises hen a contract is too lar"e for one of these firms to handle

individually.

9. ?se the services and assistance, as appropriate, of such 'orporations as the Small *usiness

&dministration and the epartment of 'ommerces ;inority *usiness evelopment &"ency in

the minority3oned firms and omens business enterprises.

S%ecial Pu#c)asing Con"itions

Emergencies:

=here equipment, materials, parts, and!or services are needed, quotations ill not be necessary if the

health, elfare, safety, etc., of staff and protection of 'orporation property is involved.

Single Distributor/Source:

=here there is only one F1G distributor for merchandise needed and no other product meets the stated

needs or specifications, quotations ill not be necessary.

Federally Funded Programs:

41


42/98

#urchases that ill be char"ed to pro"rams funded ith federal aards ill be sub


43/98

POLITICAL ACTI*ITIES

P#o)i+ite" E3%en"itu#es

It is the policy of **(I that the 'orporation shall not incur any expenditures for political activities. or

purposes of this policy, political activities shall be defined as any activity associated ith the direct or

indirect support or opposition of a candidate for elective public office at the federal, state or local level.

)xamples of prohibited political expenditures include, but are not limited to, the folloin"H

1. 'ontributions to political action committees

2. 'ontributions to the campai"ns of individual candidates for public office

-. 'ontributions to political parties

. )xpenditures to produce printed materials Fincludin" materials included in periodicalsG that

support or oppose candidates for public office

9. )xpenditures for the placement of political advertisements in periodicals

En"o#seents o Can"i"ates

It is the policy of **(I not to endorse any candidates for public office in any manner, either verbally or

in ritin". This policy extends to the actions of mana"ement and other representatives of **(I, hen

these individuals are actin" on behalf of, or are otherise representin", the 'orporation.

P#o)i+ite" Use o Co#%o#ation Assets an" Resou#ces

It is the policy of **(I that no assets or human resources of the 'orporation shall be utili>ed for

political activities, as defined above. This prohibition extends to the use of 'orporation assets or

human resources in support of political activities that are en"a"ed in personally by board members,members of mana"ement, employees, or any other representatives of **(I. =hile there is no

prohibition a"ainst these individuals en"a"in" in political activities personally Fon their on time, and

ithout representin" that they are actin" on behalf of the 'orporationG, these individuals must at all

times be aare that 'orporation resources cannot at any time be utili>ed in support of political

activities.

Cell P)ones

The purchase of cell phones or payment for the costs associated ith their use is prohibited by *oard

policy, established January 1, 2001.

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ACCOUNTS PA2ABLE MANA$EMENT

O!e#!ie'

**(I strives to maintain efficient business practices and "ood cost control. & ell3mana"ed accounts

payable function can assist in accomplishin" this "oal from the purchasin" decision throu"h payment

and chec reconciliation.

It is the policy of **(I that an employee independent of orderin" and receivin" performs the recordin"

of assets or expenses and the related liability. The amounts recorded are based on the vendor invoice

for the related "oods or services. The vendor invoice should be supported by an approved purchase

order here necessary, and should be revieed and approved by the Staff &ccountant prior to bein"

processed for payment. Invoices and related "eneral led"er account distribution codes are revieed

prior to postin" to the subsidiary system.

The primary obed2. Invoices are processed in a timely manner

-. 8endor credit terms and operatin" cash are mana"ed for maximum benefits

Reco#"ing o Accounts Pa(a+le

&ll valid accounts payable transactions, properly supported ith the required documentation, shall be

recorded as accounts payable in a timely manner.

&ccounts payable are processed on a eely basis. Information is entered into the system from

approved invoices or disbursement vouchers ith appropriate documentation attached.

It is the policy of **(I that only ori"inal invoices ill be processed for payment unless duplicated

copies have been verified as unpaid by researchin" the vendor records. $o vendor statements shall

be processed for payment.

Accounts Pa(a+le Cut0O

or purposes of the preparation of the 'orporationBs monthly financial statements, all vendor invoices

that are received, approved and supported ith proper documentation by the tenth day of the

folloin" month shall be recorded as accounts payable as of the end of the immediately precedin"

month if the invoice pertains to "oods or services delivered by month3end.

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45/98

Esta+lis)ent o Cont#ol De!ices

The Staff &ccountant establishes control of invoices as soon as invoices are received. 8endors ill be

instructed to mail all invoices directly to the accounts payable department.

?pon receipt of invoices, each invoice shall be recorded on a lo" of invoices received, Ddate receivedE

stamped, and distributed to the appropriate personnel for approval. The lo" is to be revieed daily to

determine hich, if any, invoices have not been returned to the accountin" department.

P#e%a#ation o a *ouc)e# Pac/age

#rior to any account payable bein" submitted for payment, a paca"e called a Dvoucher paca"eE

shall be assembled. )ach voucher paca"e shall contain the folloin" documentsH

1. 8endor invoice For employee expense reportG

2. #acin" slip Fhere appropriateG

-. (eceivin" report For other indication of receipt of merchandise and authori>ation ofacceptanceG

. #urchase order

9. &ny other supportin" documentation deemed appropriate

P#ocessing o *ouc)e# Pac/ages

The Staff &ccountant shall apply the folloin" procedures to each voucher paca"eH

1. 'hec the mathematical accuracy of the vendor invoice.

2. 'ompare the nature, quantity and prices of all items ordered per the vendor invoice to thepurchase order, pacin" slip and receivin" report

-. ocument the "eneral led"er distribution, usin" the 'orporationBs current chart of accounts

. /btain the revie and approval of the department director For their desi"neeG associated ith

the "oods or services purchased

&pprovals by department directors indicate their acnoled"ement of satisfactory receipt of the "oods

or services invoiced, a"reement ith all terms appearin" on the vendor invoice, a"reement ith

"eneral led"er account codin"s, and a"reement to pay vendor in full.

Pa(ent Discounts

To the extent practical, it is the policy of **(I to tae advanta"e of all prompt payment discounts

offered by vendors. =hen availability of such discounts is noted, and all required documentation in

support of payment is available, payments ill be scheduled so as to tae full advanta"e of the

discounts.

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46/98

E%lo(ee E3%ense Re%o#ts

(eimbursements for travel expenses, business meals, or other approved costs ill be made only upon

the receipt of a properly approved and completed expense reimbursement form Fsee further policies

under DTravel and *usiness )ntertainmentEG. &ll receipts must be attached, and a brief description of

the business purpose of trip or meetin" must be noted on the form. )xpense reports ill be processed

for payment in the next vendor payment cycle if received ithin to business days of the deadline.

Reconciliation o A,P Su+si"ia#( Le"ge# to $ene#al Le"ge#

&t the end of each monthly accountin" period, the total amount due to vendors per the accounts

payable subsidiary led"er shall be reconciled to the total per the accounts payable "eneral led"er

account Fcontrol accountG. &ll differences are investi"ated and ad


47/98

TRA*EL AND BUSINESS ENTERTAINMENT

$ene#al Polic(

**(IBs mission is to further medical science by promotin" research and education. (elevant research

or educational activities are appropriate and necessary expenditures required to help accomplish the

corporate mission. &ccordin"ly, funds donated to and accepted by **(I may be used to reimburse

travel expenses associated ith furtherin" research or education relevant activities.

Acce%ta+le T#a!el

Travel to meetin"s of clinical specialty societies, research societies, national and international "eneral

clinical "roups Fe."., &;&, =:/G, the reco"ni>ed or stated primary "oals of hich are to further

medical noled"e, research, public health and!or education is acceptable hen the proposed travel

has a demonstrable research or education relevance.

A%%#o!al Aut)o#it(

&pproval of proposed corporate travel fundin" requests is the responsibility of the )xecutive irector,

ith final authority for interpretation residin" ith the 'hairman or the *oard of irectors. )xceptions

to stated policy may be made only by the *oard of irectors.

Rele!ance o T#a!el

It is the responsibility of the traveler to submit adequate material to ation to

spent those funds in advance from either the )xecutive irector or the 'hief inancial /fficer of **(I.

T#a!ele#?s Res%onsi+ilit( o# E3cess E3%enses

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48/98

The traveler is responsible for excess costs and any additional expenses incurred for personal

preference or convenienceL e.". cost of accommodations in excess of conference scheduleL luxury

accommodations and services unnecessary or unUEST FOR TRA*EL FUNDS alon" ith the

folloin" documents for approval, to the #rincipal Investi"ator hose funds ill be usedH

& copy of the meetin"!conference announcement or letter of invitation

If traveler is presentin" a paper at the meetin", also attach a copy of the abstract or invitation

letter and (A 'ommittee approval for presentation.

The #rincipal Investi"ator must indicate hich research account funds should be encumbered and

then si"n the (equest for Travel unds and forard it to **(I.

**(IBs 'hief inancial /fficer ill determine that there are sufficient funds in the account indicated by

the #I and if so, encumber the appropriate amount. the '/ ill then forard the (equest to the

)xecutive irector for final approval.

T#a!el Re=uest P#oce"u#e Fo# a *A E%lo(ee

The traveler must complete and submit a **(I RE>UEST FOR TRA*EL FUNDS alon" ith the

folloin" documents for approval, to the #rincipal Investi"ator hose funds ill be usedH

& copy of the meetin"!conference announcement or letter of invitation

If traveler is presentin" a paper at the meetin", also attach a copy of the abstract or invitation

letter and (A 'ommittee approval for presentation.

&n approved D(equest for &pproval of &cceptance of 4ifts or onationsE Fform 103010*G

If Traveler is receivin" 8& travel orders, a copy of the approved S351, requestin" D&uthori>ed

+eaveE

The #rincipal Investi"ator must complete #art 8, #a"e 2, of the 8& form D(equest for &pproval of

&cceptance of 4ifts or onationsE Fform 103010*G and other required documents in support of the

request. The #I must si"n and submit the (equest for Travel unds form to **(I.

The '/ ill revie the request and determine hether sufficient funds are available to encumber. If

funds are available, the '/ shall encumber the funds and submit the (equest to the ) for final

48


49/98

approval.

E%lo(ee an" Di#ecto# Business T#a!el Rei+u#seent

(eimbursement may include payment for the folloin" expensesH

&ir travel Fcoach class rates onlyG

:otel accommodations Fsin"le room rate P authori>ed traveler onlyG

;eals F&ctual cost of each meal up to a maximum N59 per day ith ori"inal receipts. **(I ill

not reimburse for any meal or other travel related expense for hich an ori"inal receipt is not

submitted.G

;ilea"e F99 cents per mile G

4round transportation (eimbursement

&t the conclusion of a **(I business trip, an employee or member of the *oard that has incurred

business3related expenses should complete a (equest for Travel (eimbursement (eport in

accordance ith the folloin" policiesH

1. Identify each separately incurred business expense Fi.e. do not "roup all expenses associated

ith one trip to"etherG

2. =ith the exception of tips and reimbursed milea"e, all business expenses must be supported

ith invoices!receipts.

-. or all lod"in" and any expenditure other than meals, vendor receipts!invoices must be

submitted. 'redit card char"e slips do not represent adequate supportin" documentation.

. or airfare, airline3issued receipts should be obtained. If a traveler fails to obtain a receipt,

other evidence must be submitted indicatin" that a trip as taen and the amount paid Ffor

example, a combination of an itinerary, a credit card receipt, and boardin" passesG.

9. ;ilea"e may be reimbursed at the standard federal rates currently in effect, as published eachyear by the I(S.

. The business purpose of each trip must be adequately explained on each report.

5. #roation to settle the balance due throu"h a payroll deduction.

$o further travel advances ill be issued to any employee ho has an outstandin" balance due to

**(I from previous business trips.

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50/98

Reasona+leness o T#a!el Costs

**(I shall reimburse travelers only for those business3related costs that are reasonably incurred.

&ccordin"ly, the folloin" "uidelines shall applyH

1. Suites and other up"raded rooms at hotels shall not be alloedL Travelers should stay in

standard rooms

2. =hen utili>in" rental cars, travelers should rent midsi>e or smaller vehiclesL Share rental cars

henever possible

-. *usiness3related lon"3distance telephone calls hile aay on business travel are permitted,

but should be ept to a minimumL )xpense reports should explain lon"3distance char"es

. #ersonal lon"3distance calls hile aay on business are reimbursable if ept to a minimum,

such as one ni"htly call home to familyL #ersonal calls in excess of this shall not be reimbursed

9. =henever possible, travelers should utili>e lon"3distance callin" cards hen placin" calls hile

aay on travelL &void usin" the hotelBs lon"3distance service if possible

. /ne in3room movie shall be reimbursedL $o other entertainment expenses shall be reimbursed

5. (easonable tips for ba""a"e handlin" shall be reimbursedL $o receipts are required

S%ecial Rules Pe#taining to Ai# T#a!el

The folloin" additional rules apply to air travelH

1. &ir travel should be at coach classL irst class air travel shall not be reimbursed unless there is

a documented medical reason

2. ;emberships in airline fli"ht clubs is not reimbursable

-. 'ost of fli"ht insurance is not reimbursable

. =hen returnin" on a Sunday or departin" on a Saturday in order to obtain a cost savin"s inairfare due to the Saturday3ni"ht stayover, travelers should provide a total cost comparison

Fshoin" that the loer airfare plus an extra ni"ht lod"in" is less costly than airfare ithout the

Saturday ni"ht stay overG

9. 'ost of up"rade certificates is not reimbursable

'ost of cancelin" and rebooin" fli"hts is not reimbursable, unless it can be shon that it as

necessary or required for le"itimate business reasons Fsuch as chan"ed meetin" dates, etc.G

. 'ost of cancelin" and rebooin" fli"hts is not reimbursable, unless it can be shon that

it as necessary or required for le"itimate business reasons Fsuch as chan"ed meetin" dates,

etc.G

5. Travelers must identify and pay for all personal fli"hts, even if such fli"hts are incorporated into

a fli"ht schedule that serves that business purposeFi.e. **(I ill not reimburse for the

personal

le" of a tripG

6. #ersons travelin" on **(I funds cannot use "overnment rate airfares.

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51/98

S%ouse,Pa#tne# T#a!el

It is the policy of **(I not to reimburse any employee or board member for separate travel costs Fair

fare, etc.G associated ith his!her spouse or partner. The cost of a shared hotel room need not be

allocated beteen employee!director and spouse!partner for purposes of this policy.

Non0#ei+u#sa+le E3%en"itu#es

The reimbursement of funds ill be "uided by the principal that no expenditure ill be reimbursed that

could be considered to be of personal benefit FincomeG to the investi"ator involved or to represent a

conflict of interest or apparent conflict of interest.

$o payment for state licensin" fees can be made. $o supplies or equipment not located on site Fi.e.

personal computersG, computer supplies, paper, folders, etc. $o reimbursement ill be made for off

site meals in connection ith visitin" professors, lecturers, or staff meetin"s of any type. $o payments

ill be reimbursed for maintenance or repairs of non3**(I oned equipment.

Acce%ta+le Rei+u#seents&ll direct costs related to (A approved research such asH employee salaries FT)e#e ust +e @

ont)s? sala#( an" #inge +eneit un"s a!aila+le +eo#e an e%lo(ee 'ill +e )i#e"1L purchases of

supplies and equipment, maintenance and repair of **(I oned equipmentL servicesL support of

forei"n and domestic travelL payment to consultants includin" fees and reasonable expensesL

honorariaL purchase of boosL reprints and subscriptions. (eimbursement for refreshments served at

on site, approved seminars, site visits, and etc. must be approved in advance

BBRI Su%%o#t o# Meetings an" Cone#ences

;eetin"s, conferences, orshops, seminars, "rand rounds, ton halls, symposia, and other similar meetin"s areaccepted features of conductin" research and education. &dditionally, certain events, such as retreats and boardmeetin"s as ell as fundraisin" and public relations, are necessary for the conduct of business. Incidental to thebusiness purpose of such meetin"s, it may be appropriate to serve meals or refreshments.

8arious re"ulations, the federal ethics standards and the statute that authori>es **(I influence hetherexpenditures related to such events are appropriate for **(I support. 'onsequently, in order to be consideredfor **(I support by direct payment or reimbursement, **(I has established the folloin" policy.

1. In order to be eli"ible for **(I support, a meetin" must have a documented research, educationor **(I business purpose. **(I ill not support DentertainmentE expenses such as socialactivities, parties, ceremonial occasions or those that provide amusement.

or a resea#c) #elate" eetingH & request for **(I support must include an explicit

statement about the research rationale for the eventL that is, its research related purposeand ho it ill further 8& research. &ccompanyin" documentation should include thepro"ram, a"enda or topic of discussion and a roster of attendees. =hen appropriate, therequest should tie the meetin" to an approved research pro


52/98

or ot)e# BBRI +usiness e!entsH & request must include an explicit statement of hothe meetin" ill further the **(IBs ability to facilitate research and education.

&ppropriate events include, but are not limited to retreats and board, annual membershipand investi"ator meetin"s as ell as fundraisin", and public relations. ocumentationshould include the purpose, a"enda, pro"ram or topic of discussion and a roster ofattendees.

2. The types of meetin"s that may be eli"ible for **(I support are too numerous to list and thecharacteristics of appropriate meetin"s may vary. :oever, factors that **(I ill consider henevaluatin" a meetin" for support includeH

=hether at least one speaer maes a research presentation or presents educationalinstruction.

=hether there is a non38&;' speaer and!or non38&;' personnel are amon" theexpected attendees.

The frequency of similar meetin"s that may involve the same personnel. Irre"ularlyscheduled meetin"s and!or those that occur no more than monthly may be eli"ible forsupportL eely meetin"s "enerally ill not.

=hether support is requested for routine 8&;' staff, committee or department

meetin"s. 4enerally, **(I ill not support meal expenses for such meetin"s.

=hether the meetin" involves at least one individual ho is bein" recruited to conductresearch or education at the 8&;'.

=hether the meetin" lasts more than to hours or extends throu"h a normal mealtime.

(e"ardless of the type of meetin", the documentation required in 1 above is a prerequisite for**(I support.

-. (equests for **(I support ill be revieed and approved by the individual desi"nated by theboard, "enerally the executive director or the executive directorBs desi"nee. **(I ill providedirect payment or reimbursement for reasonable meetin" costs based on submission of ori"inalreceipts. In the event of disa"reement, the request ill be referred to a desi"nated member ofthe board of directors or to the full board as appropriate.

. **(I encoura"es meetin" or"ani>ers to obtain pre3approval of **(I support for meetin"s. Suchapproval is not mandatory, but events lacin" pre3approval may be denied support or mayreceive only partial support.

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53/98

CASH DISBURSEMENTS .CHEC0WRITIN$1 POLICIES

C)ec/ P#e%a#ation

It is the policy of **(I to print vendor checs and expense reimbursement checs on a eely basis.

/nly persons independent of those ho initiate or approve expenditures, as ell as those ho are

authori>ed chec si"ners shall prepare checs.

&ll vendor and expense reimbursement checs shall be produced in accordance ith the folloin"

"uidelinesH

1. )xpenditures must be supported in conformity ith the purchasin", accounts payable, and

travel and business entertainment policies described in this manual

2. Timin" of disbursements should "enerally be made to tae advanta"e of all early3payment

discounts offered by vendors

-. 4enerally, all vendors shall be paid ithin -0 days of submittin" a proper invoice upon delivery

of the requested "oods or services

. Total cash requirements associated ith each chec run is monitored in coned chec si"ner

. 'hecs shall be utili>ed in numerical order Funused checs are stored in a loced safe in the

accountin" departmentG

5. 'hecs shall never be made payable to DbearerE or DcashE

6. 'hecs shall never be si"ned prior to bein" prepared

%. ?pon the preparation of a chec, vendor invoices and other supportin" documentation shall

immediately be canceled in order to prevent subsequent reuse.

C)ec/ Signing

'hecs up to N2,000 requires a sin"le si"nature. 'hecs over N2,000 require to si"natures. $o

checs shall be si"ned prior to the chec bein" completed in its entirety Fno si"nin" of blan checsG.

It is the policy of **(I that an individual other than the one ho approved the transaction for payment

shall si"n each chec.

'hec si"ners should examine all ori"inal supportin" documentation to ensure that each item has

been properly checed prior to si"nin" a chec. 'hecs should not be si"ned if supportin"

documentation appears to be missin" or there are any questions about a disbursement.

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54/98

Mailing o C)ec/s

&fter si"nature, checs are returned to the individual ho prepared them, ho then mails checs

immediately. Individuals ho authori>e expenditures shall not mail checs.

*oi"e" C)ec/s an" Sto% Pa(ents

'hecs may be voided due to processin" errors by main" proper notations in the chec re"ister and

defacin" the chec by clearly marin" it as D8/IE. &ll voided checs shall be retained to aid in

preparation of ban reconciliation.

Stop payment orders may be made for checs lost in the mail or other valid reasons. Stop payments

are processed by telephone instruction and ritten authori>ation to the ban by accountin" personnel

ith this authority. &


55/98

PA2ROLL AND RELATED POLICIES

E%lo(ent Polic(

&ll 'orporate employees must be citi>ens or have the appropriate le"al or documents. The :uman

(esource ;ana"er supplies an application paca"e.

&ll 'orporate personnel must be recorded ith the 8&;' as =orin" =ithout 'ompensation F=/'G.

It is the policy of **(I that employees ill not normally be hired unless at least the 'orporation

receives six monthBs salary costs and frin"e benefits in advance or unless the entire pro


56/98

6. Full tie #e=ui#e"5 If orers must devote full time to the business of the employer, they

ordinarily ill be employees. & self3employed person, on the other hand, may choose for

hom and hen to or.

%. Doing 'o#/ on e%lo(e#s %#eises5 oin" or on the employers premises may indicate

that the orer is an employee, especially if the or could be done elsehere.

10. O#"e# o# se=uence o 'o#/5 If orers must perform services in an order or sequence set bythe 'orporation for hom they perform services, it indicates that the orers are employees.

11. O#al o# '#itten #e%o#ts5 & requirement that orers submit re"ular oral or ritten reports to

the employer may be indicative of an employer3employee relationship.

12. Pa(ent +( )ou#4 'ee/4 ont)5 &n employee usually may be paid by the hour, ee, or

month, hereas a self3employed person may be paid by the e a profit or suffer a loss

as a result of their services "enerally are self3employed, hile employees ordinarily are not in

such a position.

15. Wo#/ing o# o#e t)an one i# at a tie5 & person ho ors for a number of persons or

'orporations at the same time is usually self3employed.

16. Ma/ing se#!ices a!aila+le to t)e gene#al %u+lic5 =orers ho mae their services available

to the "eneral public are usually self3employed. Individuals ordinarily hold their services out to

the public by havin" their on offices and assistants, hin"in" out a Kshin"leK in front of their

office, holdin" a business license, and advertisin" in nespapers and telephone directories.

1%. Rig)t to "isc)a#ge5 The ri"ht to dischar"e is an important factor in indicatin" that the person

possessin" the ri"ht is an employer. Self3employed persons ordinarily cannot be fired as lon"

as they produce results that measure up to their contract specifications.

20. Rig)t to te#inate5 )mployees ordinarily have the ri"ht to end the relationship ith the

employer at any time they ish ithout incurrin" liability. & self3employed person usually

a"rees to complete a specific


57/98

If an individual qualifies for independent contractor status, the individual ill be sent a orm 10%% if

total compensation paid to that individual for any calendar year, on the cash basis is N00 or more.

The amount reported on a orm 10%% is equal to the compensation paid to that person durin" a

calendar year Fon the cash basisG. )xcluded from DcompensationE are reimbursements of business

expenses that have been accounted for by the contractor by supplyin" receipts and business

explanations.

If an individual qualifies as an employee, a personnel file ill be created for that individual and all

documentation required by the **(I personnel policies shall be obtained. The policies described in

the remainder of this section shall apply to all orers classified as employees.

Pa(#oll A"inist#ation

**(I operates on a semi3monthly payroll. or all **(I employees, a personnel file is established and

maintained ith current documentation, as described throu"hout this section and more fully described

in **(IBs #ersonnel ;anual.

C)anges in Pa(#oll Data

It is the policy of **(I that all of the folloin" chan"es in payroll data are to be authori>ed in ritin"H

1. $e hires

2. Terminations

-. 'han"es in salaries and pay rates

. 8oluntary payroll deductions

9. 'han"es in income tax ithholdin" status

. 'ourt3ordered payroll deductions

The )xecutive irector shall authori>e ne hires, terminations, and chan"es in salaries or pay rates in

ritin".

The individual employee shall authori>e voluntary payroll deductions and chan"es in income tax

ithholdin" status in ritin".

ocumentation of all chan"es in payroll data shall be maintained in each employeeBs personnel file.

Pa(#oll Ta3es

The &ccountin" epartment is responsible for ensurin" all required tax forms are properly completed

and submitted, and that all required taxes are ithheld and paid. The &ccountin" epartment may

utili>e the services of an outside payroll service center for the processin" of payroll, as determined by

the 'hief inancial /fficer.

P#e%a#ation o Ties)eets

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58/98

)ach **(I employee must submit to the &ccountin" epartment a si"ned and approved timesheet no

later than 12H00 noon 1stand 1thdays of each month. If either date falls on a eeend or holiday,

receipt must be on the last orin" day before the 1 stor 1thof the month. Timesheets received after

the due date ill not be paid until the next re"ularly scheduled payroll period. #ayroll checs are

issued on the 6thday of the month for or performed from the 1 ththrou"h the last day of the

previous month and on the 2- rdof the month for or performed from the 1 stthrou"h the 19thday of

the same month. Timesheets shall be prepared in accordance ith the folloin" "uidelinesH

1. )ach timesheet shall reflect all hours ored durin" the pay period Ftime actually spent on the


59/98

Re!ie' o Pa(#oll

?pon return of payroll reports and checs from the payroll service center, the 'hief inancial /fficer

revies payroll prior to its distribution to employees. The '/ shall si"n the payroll re"ister, indicatin"

approval of the payroll.

Dist#i+ution o Pa(#oll

#ayroll payments For chec stubs for electronic depositsG shall be distributed by individuals ho do not

approve time sheets, are not responsible for hirin" and firin", and do not control the preparation of

payroll.

Co%ensation o# Se#!ices Ren"e#e" B( A Boa#" Me+e#

The ;edical 'enter irector F')/G, 'hief of Staff, &ssociate 'hief of Staff for (esearch and

evelopment and the &ssociate 'hief of Staff for )ducation may not receive any compensation forservices to the 'orporation. &ll other members of the *oard Fincludin" 8& employees not referred to

in

the precedin" sentenceG may be compensated by the 'orporation, if the *oard has authori>ed said

compensation in its *ylas. If the *ylas so state, directors and officers, includin" the four 8&

members listed in the first sentence, may be compensated for travel expenses to attend meetin"s of

the *oard.

POLICIES PERTAININ$ TO SPECIFIC ASSET AND LIABILIT2 ACCOUNTS

CASH AND CASH MANA$EMENT

Cas) Accounts

General Checking Account (operating account):

The primary operatin" account provides for routine business chec disbursements. &ll cash and

credit card deposits.

'ash transfers are done on an as needed basis to cover disbursements. )xcess funds in this account

are transferred into short3term investments or hi"her interest3bearin" cash equivalents.

Payroll Account:

The payroll account is separate from the operatin" account. The payroll account is a >ero3balance

account FU*&G. &s such, only the amount needed to cover each payroll is transferred into this account

from the operatin" account, based on the amount calculated and communicated by the outside payroll

service center.

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60/98

The 'hief inancial /fficer initiates transfers from the operatin" account into the payroll account. It is

the policy of **(I that the 'orporationBs a"reement ith its financial institution limits ire transfers

from its operatin" account to those transfers into payroll only.

&uthori>ed si"ners on the payroll account ill be the same as those on the operatin" account.

Ban/ Reconciliations

*an account statements are received each month and forarded unopened to the )xecutive

Documents

BBRI Financial Policies