PURPOSE
The purpose of the Operating Reserve Policy for Mass Soccer [MASS] is to ensure the stability of the mission, programs, employment, and ongoing operations of the organization.
The Operating Reserve is intended to provide an internal source of funds for situations such as a sudden increase in expenses, one-time unbudgeted expenses, unanticipated loss in funding, or uninsured losses. The Reserve may also be used for one-time, nonrecurring expenses that will build long-term capacity, such as staff development, research and development, or investment in infrastructure.
Operating Reserves are not intended to replace a permanent loss of funds or eliminate an ongoing budget gap. It is the intention of MASS for Operating Reserves to be used and replenished within a reasonably short period of time.
DEFINITIONS AND GOALS
The Operating Reserve Fund is defined as a designated fund set aside by action of the Board of Directors. The minimum amount to be designated as Operating Reserve will be established in an amount sufficient to maintain ongoing operations and programs for a set period of time, measured in months. The Operating Reserve serves a dynamic role and will be reviewed and adjusted in response to internal and external changes.
The target minimum Operating Reserve Fund is equal to 50% of the annual operating expenses of the MASS. The calculation of average monthly operating costs includes all recurring, predictable expenses such as salaries and benefits, occupancy, office, travel, program, and ongoing professional services. Depreciation, in-kind, and other non-cash expenses are not included in the calculation. The calculation of average monthly expenses also excludes pass-through programs and one-time or unusual expenses such as capital purchases.
The amount of the Operating Reserve Fund target minimum will be calculated each year after approval of the annual budget and included in the regular financial reports.
ACCOUNTING FOR RESERVES
The Operating Reserve Fund will be recorded in the financial records as Operating Reserve Fund.
The Fund will be funded and available in cash or cash equivalent funds. Operating Reserves may be maintained in a segregated bank account or investment fund, and/or may be commingled with the general cash and investment accounts of the organization.
FUNDING OF RESERVES
The Operating Reserve Fund will be funded with surplus unrestricted operating funds. The Board of Directors may from time to time direct that a specific source of revenue be set aside for Operating Reserves, including special grants, international game fees, etc.
