The American Recovery and Reinvestment Act of 2009 (ARRA) requires each recipient of funds under the Capital Purchase Program (CPP) of the Troubled Assets Relief Program (TARP) to adopt a company-wide policy regarding excessive or luxury expenditures. The Board of Directors of Summit State Bank (Bank) prohibits expenditures that are not reasonable in nature. The Board of Directors also recognizes that certain expenditures contribute to business development regarding current or potential customers and to staff and director recognition and appreciation. This policy does not prohibit reasonable or routine expenditures regarding existing/potential customers, staff, or directors. The Bank’s President/CEO is responsible for ensuring compliance with this policy.
The following areas of coverage have been identified by the Secretary of the Department of the U.S. Treasury for inclusion in this policy: entertainment or events; office and facility renovations; aviation or other transportation services; similar items, activities, or events. These areas of coverage are addressed below.
ENTERTAINMENT OR EVENTS:
Entertainment or events are activities where bank funds are used for business development regarding current or potential customers or to enhance the Bank’s marketing efforts. Entertainment expenses must promote the business development purposes of the Bank and may include taking customers/potential customers to breakfasts, lunches, dinners, various events such as golfing, Chamber events, Sonoma County Fair events and other community events. These expenses should be documented and detailed as to business purpose when submitted to the Accounts Payable Department for reimbursement.
OFFICE AND FACILITY RENOVATIONS:
Expenditures for all office and facility renovations must be reasonable, must advance the Bank’s strategic plan, and must be approved within the Bank’s Signing Authority Policy.
AVIATION OR OTHER TRANSPORTATION SERVICES:
Expenditures for business-related activities, events, meetings, etc. must be reasonable and approved according to the Bank’s policies and procedures. Transportation for Bank staff regarding seminars, conferences, business development, to attend community events and to visit branch locations must be conducted in a cost efficient manner. Travel by air should be by commercial airline with travel by first or business class requiring the prior approval of the department manager.
Expenses incurred by Board members incidental to the conduct of Bank business, including reasonable travel expenses are reimbursable to the Director. Directors traveling more than 50 miles from home to attend Board or similar meetings may request reimbursement from the Bank of those travel expenses, including meals and lodging, in the event of inclement weather preventing an immediate return home. Mileage is reimbursable according to current IRS mileage rates. Directors who reside out of state will be reimbursed for commercial airline travel with first or business class travel requiring prior approval of the Bank’s CEO. Ground transportation, which may include car rental, shuttle, or similar mode of transportation from and to the airport and to the Bank location for attendance at board or similar meetings will also be reimbursed. In these instances, Directors may also be reimbursed for one night’s lodging and meals. Documentation for reimbursement should include a copy of the invoice and a copy of the original method of payment.
OTHER ITEMS, ACTIVITIES OR EVENTS:
Other events, such as staff appreciation lunches, quarterly staff dinners, and holiday parties are typically used to build teamwork amongst employees and to recognize staff efforts in achieving the Bank’s goals and strategic plan. Approval for these activities must be in accordance with the Bank’s Signing Authority Policy.
Unless specifically indicated above, all Bank expenditures must conform to the Bank’s Signing Authority Policy and be supported by written documentation including appropriate invoices and receipts. Documentation must be submitted to the Bank’s Accounts Payable Department prior to reimbursement.
ACCOUNTABILITY AND VIOLATIONS
All employees, officers, and directors of the Bank and its subsidiary are subject to this policy and will be held accountable for compliance with this policy. Any employee found to have violated this policy will be subject to disciplinary action up to and including termination of employment.
REPORTING OF VIOLATIONS:
Violations of this policy must be promptly reported to the Bank’s President/CEO or to the Bank’s Compliance Officer who will then report the violation to the Board of Directors.
The Chief Executive Officer and the Chief Financial Officer must certify at least annually that this policy is being followed and that appropriate approvals have been obtained.
POSTING AND PROVIDING OF POLICY:
This policy must be posted on the Bank’s Internet website and a copy must be provided to Treasury and the FDIC.