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Branch Policy Manual

Finance & Investment Policy

Purpose

  1. The purpose of this Finance and Investment Policy is to provide guidance on the management and investment of CBA-SK funds to ensure that CBA-SK conducts its operations and activities in a fiscally responsible manner.
  2. The Executive Director shall consult with an independent investment advisor (“Investment Advisor”) that the Board approves from time to time. In consultation with the Treasurer, the Executive Director shall approve the agreement and documents which deal with the investment authorizations in accordance with the Finance & Investment Policy and any remuneration to be paid to the Investment Advisor.
  3. The Treasurer will meet on a regular basis to review CBA-SK’s finances with the Executive Director, including to develop and track performance against the budget, monitor the Reserve and Operating Funds and any investments, and ensure compliance with this Policy.
  4. This Policy remains subject to any additional approvals or signature requirements set out in the Bylaws.

Non-budgeted Expenditure

  1. The Members’ approval of the annual budget authorizes the expenditure of funds for those programs, purchases and activities set out in the budget.
  2. Subject to Bylaw 20, any expenditure over budget within a sub-category may be offset by a reduction in spending or a corresponding increase in revenue within the same category. 
  3. The Executive Director must seek approval from the Board for:
    1. any capital expenditures either not set out in the budget or more than $5,000 above the amount set out for that sub-category of expenditure in the budget; and
    2. any operational expenditure either not set out in the budget or more than $5,000 above the amount set out for that sub-category of expenditure in the budget.

Restricted and Unrestricted Reserves

The CBA-SK shall maintain:

  1. Restricted Operating Reserves established and maintained at a level not less than six months budgeted expenditures as calculated in accordance with the budget of the current year.
  2. Restricted Strategic Reserves to provide funding for typically one-time, special projects, investments or events that support the achievement of the CBA or CBA-SK’s strategic priorities and allow for regular operations to continue in the year of these strategic initiatives.
  3. Unrestricted General Reserves that are comprised of those assets held by CBA-SK that are not allocated in the budget or contained in the Restricted Operating Reserves or the Restricted Strategic Reserves. A base level of Unrestricted General Reserves is required to sustain cash flow requirements of the CBA-SK.

Restricted Operating Reserves

  1. The purpose of the Restricted Operating Reserves is to provide sufficient resources to maintain ongoing operations of CBA-SK or to wind up CBA-SK in the event of a crisis which severely restricts income to CBA-SK or requires it to be wound up.
  2. The Restricted Operating Reserves shall be established and maintained at an accumulated amount equal to at least six months budgeted operating expenditure, as required by Bylaw 20(7) and invested in accordance with the Investment Guidelines below.
  3. The Executive Director, in consultation with the Treasurer, may submit a request to drawdown the Restricted Emergency Fund to the Board, providing an analysis of the proposed use of the funds and plans to restore the Restricted Emergency Fund to the minimum amount set out in Article 4.2.
  4. All drawdown of capital from the Restricted Operating Reserves must be approved in accordance with Bylaw 20(8).

Restricted Strategic Reserves

  1. The purpose of the Restricted Strategic Reserves is to provide funding for typically one-time, special projects, investments or events that support the achievement of the CBA or CBA-SK’s strategic priorities to allow for regular operations to continue in the year of these strategic initiatives.
  2. All drawdown of capital from the Restricted Strategic Reserves must be approved by the Board.
  3. The Restricted Strategic Reserves shall be established and maintained at an amount of at least $50,000 or an amount otherwise set by the Board.

Unrestricted General Reserves

  1. The purpose of the Unrestricted General Reserves is to provide:
    1. funds for a planned or unplanned deficit in any fiscal year;
    2. funds for any special member initiatives;
    3. funds to increase the Restricted Operating Reserves or Restricted Strategic Reserves if required;
    4. a higher rate of investment income through longer-term investments for funds that are not anticipated to be needed in the short term for operations; and
    5. investment income to support the budget.
  2. At the end of each fiscal year, the Executive Director may transfer any surplus cash not immediately required for ongoing operations into the Unrestricted General Reserves (i.e., the amount remaining after any deferred revenue, liabilities and budgeted expenditures have been considered).
  3. Monies in the Unrestricted General Reserves may only be used where:
    1. pre-authorized in the budget for that fiscal year; or
    2. otherwise approved by the Board.
  4. The Unrestricted General Reserves should not, as a usual practice, exceed six months of budgeted expenditures (except for grants and self-funded events) because the source of the funds are membership dues that should be utilized for the benefit of the Members in pursuing the strategies of CBA-SK. However, extenuating circumstances and/or market conditions may warrant an amount in excess of the six months, in which case the Board may pass a motion that an excess amount is to remain temporarily in the Unrestricted General Reserves. The Board will re-evaluate the temporary excess within a year.
  5. Any interest accruing on monies held in the Unrestricted General Reserves is deemed to be investment income and may be deposited in CBA-SK’s operating account and used for any purposes authorized in the budget or may be reinvested.

Investment Guidelines

  1. CBA-SK funds shall be invested with the objective of achieving modest capital growth, while also preserving capital, minimizing risk, and providing for ease of access to funds.
  2. Unless otherwise determined by the Board, the Restricted Operating Reserves will be invested in one or more Guaranteed Investment Certificates (GIC). The Executive Director, in consultation with the Investment Advisor, will determine the investment amount, term, required liquidity and preferred Canadian chartered bank for a GIC, based on the investment objectives set out above and market availability.
  3. GICs with one organization will not exceed the $100,000 Canada Deposit Insurance Corporation limit. Funds may be separated into various investment products. GICs’ and other investments’ maturity dates will be staggered over 5 years. The staggered investments are based on the recommendation of the Executive Director and Investment Advisor.
  4. The Executive Director may recommend to the Treasurer that any surplus from the Unrestricted General Reserves be invested. Such investments may include a certificate of deposit, GIC, term deposit or other evidence of indebtedness of a major Canadian chartered bank.
  5. Any modification to invested funds other than as permitted under these Investment Guidelines must be approved by the Board.