Sample Policies and Procedures
This page is dedicated to sample policies and procedures. it is critically important for anyone using these samples to read each policy and each procedure, and to tailor them to suit their own staffing situation and preferences. In addition, some policies need to be guided by state law. It is important that NPCs be aware of laws and regulations that impact them. We have made suggestions, but you may have equally – or more – effective alternatives. The goal should be to have policies and procedures that the NPC will actually follow.
It is customary for the board of directors to review and approve an organization’s policies. Procedures may be developed and implemented by staff. However, it is advisable to have at least one board member review procedures with staff to confirm that the procedures provide adequate detail and segregation of duties.
NPC Support of Business Meetings (Meals)
NAVREF encourages NPCs to assess their operations and suggests using the following as the basis for developing their own policy on meeting support. This sample should be regarded as the minimum standard. Individual NPCs may wish to add additional restrictions consistent with local policy or the board's views on appropriate business meeting requirements.
Conflicts of Interest
By statute, NPC officers, directors, and employees are subject to a conflict of interest policy established by the NPC. NPCs must have a board-approved NPC conflict of interest policy and the statute requires all directors, officers and employees to undergo training within 90 days of appointment as well as additional annual disclosure requirements.
NPC Services Emergency Management Continuity of Operations Plan
The research/education administration policies (below) references an NPC Services Emergency Management Continuity of Operations Plan.
Sample policies have been provided for a few of the items listed below. More are contained in the sample employee handbook provided by labor attorney Caryn Pass, Esq., of Krupin O’Brien, LLP, for the use of NAVREF members. Prior to issuing the employee handbook, have a local attorney review the handbook to ensure compliance with local and state laws.
Financial Policies and Procedures for Small NPCs
With many thanks to the executive directors listed below for their input and persistence as we worked through many drafts, NAVREF is very pleased to offer draft sample financial and research/education administration policies and procedures for small staff NPCs.
Erica Brown, Executive Director, The Research Corporation of Long Island, Northport, NY
Mary Jo Brady, Executive Director, Metropolitan Detroit Research and Education Foundation, Detroit, MI
Dee Vasquez, Executive Director, Augusta Biomedical Research Corporation, Augusta, GA
These samples were developed primarily for NPCs with just one or two administrative staff members because they face particular challenges in achieving adequate segregation of duties for purposes of internal controls. However, we hope the samples also will be useful to larger-staff NPCs as a tool for cross-checking their own.
A few notes and caveats:
Although we are offering 60 samples, this does not constitute all of the policies and procedures an NPC needs. We kept the focus on items that have a financial aspect to them. For example, human resource policies and procedures are not included unless they have a financial aspect. HR policies should be addressed separately and in accordance with state law.
For the small staff NPC sample policies and procedures, please go to:
The small staff NPC samples do not take into consideration state laws. Be sure to consult your accountant to ensure compliance with state laws that impact financial policies and procedures.
The financial samples were not designed to meet standards applicable to management of federal funds. Many of them will satisfy those requirements, but compliance with the OMB Circular A-122 cost principles and A-133 audit standards was not the objective.
Research and Education Administration Policies and Procedures
The following draft sample research/education administration policies and procedures may also form the basis for a separate “Principal Investigator Handbook” that could be used to inform PIs about how to access your NPC’s services.
Policies Required by Sarbanes-Oxley Act
In 2002, Congress passed the American Competitiveness and Corporate Accountability Act, better known as the "Sarbanes-Oxley Act" even though the law is largely applicable to publicly traded for-profit corporations. This law was designed to ensure adequate internal controls over financial reporting in the wake of Enron and other recent corporate scandals. However, a number of states are considering laws that would extend to small businesses and nonprofits requirements similar to those Sarbanes-Oxley imposes on publicly traded companies. As a result, it is important for NPCs and their boards to become familiar with Sarbanes-Oxley and to discuss it its implications with their accountants and auditors.
The main effect of Sarbanes-Oxley is to raise the bar on corporate governance. In the future, federal agencies may adopt the standards set by the act as requirements for nonprofit grant recipients. Also, state regulators may determine that the “best practices” promulgated by the act increase the standard of care imposed by the courts on nonprofit executive directors and directors.
At this time, nonprofits are not required to increase their governance standards. Further, NPC officers, directors and employees are subject to federal ethics regulations, and NPCs are limited to financial investments backed by the full faith and credit of the US government. These eliminate some of the concerns Sarbanes-Oxley is designed to address so NPCs are unlikely to have to take drastic steps to ensure compliance should its provisions be extended to nonprofits.
However, it is generally accepted that some Sarbanes-Oxley provisions will be adapted for nonprofits in the near future, and that they represent best practices that should be implemented regardless. As a result, some NPCs may wish to begin exploring a few practical changes in their financial reporting and oversight mechanisms:
Consider creating an audit committee to oversee interactions with auditors. A small nonprofit may consider combining the functions of a finance and audit committee in one. Click here for more information on audits and audit committees.
Consider having the audit committee meet with auditors without management present.
Have the audit committee review and approve non-audit services provided by the auditor.
Recruit a financial expert for the board and the audit committee who is otherwise independent of the nonprofit.
Assess whether the board and executive director have an understanding of nonprofit financial matters sufficient to certify accuracy of the financial reports. If not, consider obtaining training from the auditor or other resources.
Establish policies regarding board conflicts of interest and a board code of conduct (click here for more information on board member conduct). Directors are subject to federal ethics regulations so a separate board code of ethics may not be necessary.
If it is not already in the bylaws, establish a policy prohibiting loans to officers, directors and employees.
Ensure that compensation arrangements (if any) with board members are free of conflicts of interest.
Study executive director compensation arrangements to ensure they follow the IRS Intermediate Sanctions regulations (click here for more information on intermediate scanctions.)
Ensure that there are adequate internal controls over financial transactions and reporting.
Two criminal provisions of the Sarbanes-Oxley Act apply to all organizations. One makes it a crime to knowingly destroy a document with the intent to obstruct or “influence the investigation of any matter within the jurisdiction of any department or agency of the US.” The second provides new protections for whistle blowers. It makes it a crime for anyone to take any action that is harmful to any person, including interference with their livelihood or employment, for “providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense.”
To address these two provisions, an NPC may wish to:
Establish a document management policy to guide employees in handling and disposing of documents.
Establish a policy and procedure that encourages internal disclosure of misconduct or mishandling of funds and provides assurance that there will be no retaliation. Otherwise known as a Whistleblower Policies.
Subscriptions and Dues
NPCs should use caution when paying for membership dues for VA employees.
Click here for guidance on payments for memberships and dues as well a sample policy and SOP on subscriptions and dues.
Transfer of Funds Policy
When funds remain after a project is completed, NPCs are often asked whether remaining funds can be transferred to another entity when a PI leaves the affiliated VAMC.
Click here fore more information on transfer funds from an NPC to another entity as well as a sample transfer of funds policy.