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EXHIBIT 3 <br /> 4 HB Fiscal Polices tt Procedures <br /> Control procedures are the procedures set up to strengthen HB's internal control structure and <br /> thus safeguard the agency assets. They are divided into the following: <br /> • Segregation of Duties: Allocation of tasks ensures that one individual does not have the <br /> ability to both make an accounting error (either intentionally or unintentionally) and also <br /> cover it up. <br /> • Restricted Access: Restrict physical access to valuable and movable assets to authorized <br /> personnel. Restrict systems access to make changes in accounting records to authorized <br /> personnel. <br /> • Document Control: To ensure that all documents are captured by the accounting system, <br /> pre-number documents and account for the sequence for documents. To ensure <br /> compliance with the Sarbanes-Oxley Act's provision to prevent destruction of litigation- <br /> related documents, HB has adopted policies and procedures for document retention. <br /> • Processina, Controls: These are designed to catch errors before they are posted to the <br /> general ledger. Common processing controls include batch controls, source document <br /> matching, clerical accuracy of documents, and general ledger account code checking. <br /> • Reconciliation Controls: These are designed to catch errors after transactions have been <br /> posted to the general ledger. <br /> 4. The Accounting Cycle <br /> The overall purpose of an accounting system is to accurately process, record, summarize, and <br /> report on HB's transactions. <br /> The component accounting cycles fall into one of four primary functions: <br /> I. Revenue, Accounts Receivable, and Cash Receipts <br /> Key steps in this area are: <br /> • Processing cash receipts <br /> • Making deposits <br /> • Recording cash receipts in the general ledger <br /> • Performing month-end reconciliation procedures <br /> II. Purchases, Accounts Payable, and Cash Disbursements <br /> Key steps in this area are: <br /> • Authorizing the procurement of goods and/or services <br /> • Processing purchase transactions <br /> • Processing invoices <br /> • Issuing checks <br /> • Recording disbursements <br /> • Performing month-end reconciliation procedures <br /> • Completing year-end reporting for 1099 tax forms <br /> III. Payroll <br /> Last updated September 2022 <br />