Operational Statements 4100 - 4199

4110 Financial Philosophy

4120 Financial Objectives

4130 Document Retention

Fund Raising 4250 - 4259

4252 Fund Raising for Small Campus Projects

4253 Fund Raising for Morrison Academy

4254 Fund Raising and Grants for Employees

Debt Policies 4260 - 4279

4261 Internal Financing

4262 Long-Term Borrowing

4270 Risk Management

4271 Liability

Financial Assistance 4280 - 4289

4280 Employee Discounts

4281 Missionary Discounts

4282 Christian Worker Discounts

4283 Long-Term Lease Income

4284 Family Discounts

4285 Financial Aid

4286 Alumni Scholarships

4287 Missionary Scholarships

4288 Robert Morrison Scholarship

Contracts for Service 4290 - 4294

4291 Contracts with Missions

4292 Contracts with Vendors

4293 Long-Term Lease Contracts

4294 Short-Term Lease Contracts

Financial Procedures 4295 - 4299

4295 Finance Procedure Manual

4296 Investments

4297 Cash Management

Budget 4300 - 4399

4305 Balanced Budget

4310 Budgeting Priority

4315 Delinquent Bills

4320 Tuition and Fees

4340 Authorization of Expenses

4345 Decreased Enrollment

4350 Personnel - Enrollment Authorization

Accounting Policies 4400 - 4499

4400 Fund Accounting

4401 Authorized Funds

4402 Reserve Accounts

4403 Year End Transfer

4410 Accounting Standards

4420 Fiscal Year

4430 Annual Audit

Property and Facilities 4500 - 4599

4510 Property of Morrison Christian Association

4511 Morrison Christian Association Property Trust Agreements

4512 Faculty Housing

4513 Facility Usage Priorities

4514 Facility Usage Conduct Guidelines

4515 Memorials

4518 Vehicles on Campus

Reviewed: 1999-2000

4110 FINANCIAL PHILOSOPHY

Morrison Christian Association is a Christian not-for-profit corporation.

Morrison Academy will manage its financial resources in order to provide quality education at a reasonable cost for missionary families in Taiwan.

Morrison Academy shall abide by all laws and regulations of the Republic of China and, where applicable, the United States.

1/08

4120 FINANCIAL OBJECTIVES

In order to implement the financial philosophy, Morrison Academy will:

1. Approve a balanced annual budget.
   2. Charge tuition and fees comparable to Taiwan international schools offering similar services.
   3. Provide a tuition discount to missionaries that considers a sampling of tuition rates of Christian schools in Asia and the USA.
   4. Provide for future capital needs.
   5. Compensate expatriate personnel based on that of the missionary community. Local Chinese personnel will be compensated according to local practice.
   6. Provide accurate financial information to appropriate parties.

5/08

4130 DOCUMENT RETENTION

Morrison Academy shall retain documents according to the retention schedule found in the administrative procedures manual.

Upon any indication of an official investigation of Morrison Academy by any governmental entity, document destruction shall be suspended immediately until the investigation has been completed.

5/07

4252 FUND RAISING FOR SMALL CAMPUS PROJECTS

Funds may be raised and donations accepted for specific approved purposes of Morrison Academy. Purposes may include:

1. Extra-curricular programs.
2. Charitable gifts to other groups or individuals with special needs.

Individual campus fund raising projects must be approved by the Development Office and supervised by the responsible SAC administrator. All funds raised will become assets under the control of Morrison Academy to be used for the approved purpose.

5/06

4253 FUND RAISING FOR MORRISON ACADEMY

Purpose

Funds may be raised and donations accepted for specific Board approved purposes of Morrison Academy. Approved purposes may include:

1. capital and equipment
2. development and facility improvements
3. instructional and co-curricular resources
4. subsidized programs, such as dorms or satellite schools
5. student financial aid and scholarships

Donations will be accepted only for purposes that fit the needs and plans of Morrison Academy.

Guidelines

1. Donations will be accepted only from individuals, organizations or groups that would not compromise, or give the appearance of compromise, to the Christian standing of Morrison Academy or to its reputation.
2. Donations will carry no promises of special treatment or a preferential treatment with respect to admissions.
3. Fund raising will be done in a way that does not draw attention away from the main purposes of the school.
4. All fund raising costs will be funded through the operating budget. Donations will be allocated entirely to the designated fund raising project.
5. Fund raising materials will be absolutely truthful and accurate. There will be no material omissions or exaggerations of fact or use of misleading photographs.
6. Coercive or manipulative tactics will not be employed.
7. Public recognition of donors will be done equally without respect to the amount of the donation. Donors may remain anonymous. Donation records will not be shared or sold to other organizations or individuals.
8. Premiums or incentives will not be used to attract donations, but gifts of appreciation, such as plaques or books, may be given as appreciation for a donation.
9. Significant contributions to Morrison Academy for a facility or program may be recognized as a memorial (See Policy #4515 MEMORIALS.)
10. Upon recommendation from the Leadership Committee, the Board may approve a name for a restricted endowment fund in excess of NT $300,000.

Approval and Supervision

Fund raising projects and the acceptance of donations under NT$400,000 will be approved by the Principal in consultation with the Superintendent. The Principal or his designee will supervise the fund raising.

Fund raising projects and the acceptance of donations in excess of NT$400,000, but under NT$1,000,000 will be approved by the Superintendent. The Superintendent or his designee will supervise the fund raising.

Fund raising in excess of NT$1,000,000 and capital campaigns shall be recommended by the Superintendent and approved by the Board Finance Committee and the Board. The Superintendent or his designee will supervise the fund raising.

5/09

4254 FUND RAISING AND GRANTS FOR EMPLOYEES

Morrison Academy's compensation package for direct hire employees may not cover some needs that are commonly provided by missionary sending organizations. Therefore employees may raise financial support through the Morrison Academy Employee Grant Program. All funds raised and donations accepted for this grant program by the employees will belong to Morrison Christian Association. Disbursement of grants to employees must be approved by the Director of Finance in accordance with administrative procedures.

Morrison Academy will maintain an accounting of funds raised by the employee, and of grants disbursed to the employee. The employee will not have any ownership or right to funds in the account. In the event that the employee leaves the employment of Morrison Academy any balance remaining in the account will be transferred to the Plant and Development Fund.

3/07

4261 INTERNAL FINANCING

Morrison Academy will normally use internal financing for projects. Short-term debt, for no longer than twelve months, may be incurred to provide services or facilities in a timely manner and shall be reported to the Finance Committee.

6/04

4262 LONG-TERM BORROWING

Board approval is required to incur long term debt for longer than twelve months.

6/04

4270 RISK MANAGEMENT

Morrison Academy will use internal reserves for self-insurance whenever possible. Morrison Academy may purchase insurance as one method of managing risk not covered by internal reserves. The Director of Finance and the Finance Committee will annually review the insurance needs of the school and make necessary recommendations to the Board.

11/06

4271 LIABILITY

Personal Property

Morrison Academy assumes no responsibility for lost, stolen, or damaged personal property, even when stored on campus.

Injury

Reasonable precautions will be taken by Morrison Academy and its staff to protect and prevent anyone on school premises or anyone engaged in school activities from being injured.

HOWEVER, Morrison Academy assumes no responsibility for injuries an employee/student may receive, or for property damage or injury they cause outside of school activities whether on or off school property.

FURTHERMORE, Morrison Academy will assume no responsibility for injuries an employee/student may receive, or for property damage or injury they may cause on or off the school premises when engaged in school activities, if they do not demonstrate responsible behavior, or when they do not follow school procedures/policies.

6/04

4280 EMPLOYEE DISCOUNTS

In order to provide for the educational needs of the dependants of expatriate employees whose FTE is 0.5 and greater, Morrison Academy will grant discounts on registration, building fees, tuition, dorm fees and may grant special needs and ELL instruction fees. Fees for services other than those offered to other constituents will not be discounted.

Discounts will be prorated based on the employee's actual FTE. The discount percentage is 100 times the employee's FTE.

4/08

4281 MISSIONARY DISCOUNTS

In order to fulfill the stated purpose of the school in helping missionaries educate their children, Morrison Academy may grant discounts on tuition and fees for those who qualify as missionaries under the requirements of Policy 1613 MISSIONARY. As part of the annual budget adoption process, the Board of Trustees will determine the percentage of the discounts. The total missionary discount, including the portion subsidized by the long-term lease endowment, shall not exceed 60% of registration, building fees, tuition, dormitory program fees, dormitory kitchen service fees, and special needs instructional fees.

The Finance Committee shall determine the specific missions, churches or other sending organizations which are eligible for missionary discounts. Members of these organizations will be granted continued missionary discounts by the Director of Finance provided that the individual remains in good standing with and accountable to that organization, and continues to meet the requirements of Policy 1613 MISSIONARY.

The Director of Finance shall approve applications and annual renewal applications for individual missionary status according to the definition in Policy 1613 MISSIONARY. Exceptions to Policy 1613 MISSIONARY may be granted by the Finance Committee and shall be reported to the board.

The school may require the following documentation from an individual to support an initial application or annual renewal for missionary discounts:

1. Documentation that demonstrates that the applicant fits the definition of a missionary as outlined in Policy 1613 MISSIONARY.
2. Financial disclosure with evidence that the total family income is less than NT$2 million per year, and that less than 50% of family income is derived from non-ministry related employment. Family income is defined as the gross income that is reported on the Taiwan tax return for both spouses.

The school may also require the following documentation from the mission:

1. A Statement of Faith that is in agreement with the Morrison Academy Statement of Faith.
2. A statement that the mission identifies as Protestant in faith and practice, is incorporated as a not-for-profit organization in a country other than the Republic of China, and receives the majority of its financial support from sources outside of Taiwan.
3. A statement that the individual is a member in good standing with the mission organization, and is accountable to the organization.

5/07

4282 CHRISTIAN WORKER DISCOUNT

Morrison Academy may grant discounts to those who qualify as Christian Workers according to the requirements of Policy 1614 - CHRISTIAN WORKER. As part of the annual budget adoption process, the Board of Trustees will determine the percentage of the discounts. These discounts shall not exceed 50% of registration, building fees, tuition, dormitory program fees, dormitory kitchen service fees, and special needs instructional fees.

The Finance Committee shall determine the specific missions, churches or other sending organizations which are eligible for Christian Worker discounts. Members of these organizations will be granted continued Christian Worker discounts by the Director of Finance provided that the individual remains in good standing with and accountable to that organization, and continues to meet the requirements of Policy 1614 CHRISTIAN WORKER.

The Director of Finance shall approve applications and annual renewal applications for individual Christian Worker status according to the definition in Policy 1614 CHRISTIAN WORKER. Exceptions to Policy 1614 CHRISTIAN WORKER may be granted by the Finance Committee and shall be reported to the board.

All applicants for a Christian worker discount must provide documentation that demonstrates that the applicant fits the definition of a Christian worker as outlined in Policy 1614 CHRISTIAN WORKER.

Additionally, a Taiwan Christian worker must provide financial disclosure with evidence that the total family income is less than NT$2 million per year, and that less than 50% of family income is derived from non-ministry related employment. Family income is defined as the gross income that is reported on the Taiwan tax return for both spouses. An off-island Christian Worker must provide financial disclosure with evidence that the total family income is less than NT$2 million per year.

The school may also require the following documentation from the organization:

1. A Statement of Faith that is in agreement with the Morrison Academy Statement of Faith.
2. A statement that the organization identifies as Protestant in faith and practice, is incorporated as a not-for-profit organization in a country other than the Republic of China, and receives the majority of its financial support from sources outside of Taiwan.
3. A statement that the individual is a member in good standing with the organization, and is accountable to the organization.

5/09

4283 LONG-TERM LEASE INCOME

Net income from the long-term lease of the properties Ren Ho Sec. #1156 and #1300-3 will be used to endow a portion of the missionary discount.

6/03

4284 FAMILY DISCOUNTS

The Board may authorize a discount for families with multiple children in the school in conjunction with the annual approval of fees.

6/04

4285 FINANCIAL AID

On the basis of demonstrated need, parents of students enrolled in Morrison Academy may apply for Financial Aid Grants to help pay for tuition, boarding, special needs and ELL fees. Requests for such aid will be considered from parents without regard to their missionary or non-missionary status. Financial aid is determined after enrollment, and should not be an expectation for enrollment. Financial Aid grants are allocated to those experiencing short-term financial need.

Grants are paid from a Board budgeted Financial Aid Account, with the granting of assistance dependent upon the availability of funds for that particular budget year.

Grants will be awarded on a semester basis with applications required for each semester. In exceptional cases, grants may be awarded for one or two years at a time. These situations may include extreme hardship or continued financial strain.

The Director of Finance, in consultation with the Board Treasurer, will authorize the distribution of Financial Aid Grants and administer the Financial Aid Account. Cases that are exceptional or involve extreme hardship will be referred to the Finance Committee. In case of questions regarding the decision of the Board Finance Committee, parents may appeal to the Board of Trustees for further consideration.

Grants may be awarded to a maximum of 30% registration, building fees, tuition, dormitory program and dormitory kitchen service fees, and special needs and ELL instruction fees. In the case of extreme hardship, grants may be awarded up to a maximum of 50%. Grants are calculated on the balance due after discounts have been applied.

Conditions:

1. Full financial disclosure is required in order to be eligible for consideration for Financial Aid Grants. Financial disclosure may include salary/support, housing, car and travel allowances, retirement and education benefits, child allowances, and family investments and assets. The applicant may be asked to provide copies of their most recent Taiwan and/or home country tax return. Income for work expenses will be excluded.
2. Total family income is less than NT$2,000,000 per year.
3. Grants will be awarded only after debts from previous semesters have been paid up to date.

5/09

4286 ALUMNI SCHOLARSHIPS

Alumni Scholarships may be granted to graduates of Morrison Academy who are enrolled in an undergraduate educational program. These scholarships will be awarded based upon services provided to Morrison Academy. Each scholarship will be funded by the Financial Aid account, and will be given directly to the undergraduate educational institution.

Alumni Scholarships will be authorized by the Director of Finance and reported to the Board Finance Committee (Policy #4285).

5/07

4287 MISSIONARY SCHOLARSHIPS

Missionary scholarships for missionary and Christian worker families in Taiwan may be granted to families experiencing long term financial hardship. These scholarships may be available to missionary families of currently enrolled or new students who could not afford to attend Morrison without financial help. A family may not receive a missionary scholarship and financial aid at the same time.

The granting of scholarships is dependent upon the availability of funds. The scholarships shall be funded by designated gifts. The funds for the Missionary Scholarship will be kept in a separate Missionary Scholarship Fund. The Finance Committee shall administer and authorize the distribution of this fund.

Scholarships are awarded annually and may be renewed. The maximum scholarship shall be 40% of registration, building fees, tuition, dormitory program fees, dormitory kitchen service fees, and special needs instructional fees. Scholarships are calculated on the balance due after discounts have been applied

Recipients of Missionary Scholarships must meet all of the following criteria:

• The Campus Principal makes a recommendation based on family financial need and student progress
• The student maintains good academic progress and makes a positive contribution to the school community
• The family continues to meet the definition of Missionary or Christian worker
• The family's school fees from the previous semesters have been paid in full

For the initial application and for each renewal, the family shall submit a full financial disclosure demonstrating need. This disclosure shall include:

• salary/support
• housing
• car and travel allowances
• retirement allowances
• education allowances
• child allowances
• other income, excluding work expenses
• a report on efforts made to raise support for their children's education.

3/06

4288 ROBERT MORRISON SCHOLARSHIP

This scholarship may be granted to families that demonstrate a commitment to Christ’s Great Commission and cannot afford to attend Morrison without financial assistance. These scholarships may not be granted to missionaries or Christian workers as defined by policy 1613 and 1614.

The granting of scholarships is dependent upon the availability of funds. The scholarships shall be funded by designated gifts. The funds for the Robert Morrison Scholarship Fund will be kept in a separate scholarship fund in a similar fashion as the Missionary Scholarship Fund (see policy 4287).

Recipients of Robert Morrison Scholarships must meet all of the following criteria:

• The parents demonstrate a commitment to Christ’s Great Commission.

• The parents agree with and sign the Morrison Academy Statement of Faith and identify themselves as Protestant in faith and practice.

• The parents must have been engaged in effective ministry in Taiwan for at least five years of the last six years. Effective ministries are considered activities that reach people with a saving knowledge of Jesus Christ.

• The parent(s) must volunteer significant time and effort for Christian ministry in partnership with missions, churches or para-church organizations.

• The parents are verifiably accountable to a mission, local church or not-for-profit para-church Christian organization in Taiwan.

• The student maintains a positive contribution to the school community and makes good academic progress.

• The total family income is less than NT2 million. Total family income is defined as gross income that is reported on the Taiwan tax return.

• The family's school fees from the previous semesters have been paid in full.

The Campus Principal makes a recommendation based on family financial need and student progress. The Finance Committee shall administer and authorize the distribution of this fund, and will consider applications in April and May. Applications must be submitted by April 30 for the following school year. These scholarships are awarded annually. Recipients may reapply each year. The maximum scholarship shall be 50% of full registration, tuition, building fees, dormitory program fees, and dormitory kitchen service fees. Recipients of this scholarship cannot qualify for Morrison Academy’s Missionary Scholarship or Financial Aid.

11/08

4291 CONTRACTS WITH MISSIONS

Missions are to be reimbursed salary and benefits for each mission-supported employee contracted by the school.

A mission administrative fee may be paid to missions who are partnering or supporting Morrison Academy expatriate head-of-household personnel. The mission administrative fee will be annually established by the Board of Trustees, in conjunction with the annual budget approval process.

4/05

4292 CONTRACTS WITH VENDORS

Morrison Academy seeks the best goods and/or services at the best prices. There is no expectation of special consideration beyond the best price for its purchases of goods and services.

Employees of Morrison Academy shall not accept gifts of goods or money for giving business to a particular firm. No personal gifts or gratuities may be accepted that might influence the proper judgment of a school employee in the performance of his duty. Unsolicited gifts of substantial value must be reported to the Director of Finance.

11/06

4293 LONG-TERM LEASE CONTRACTS

Long-term lease contracts shall be those contracts which provide for leasing Morrison Christian Association property for a period longer than 24 months.

Property designated in the Site Plan for long-term lease shall be available for lease.

The Finance Committee of the Board of Trustees will consider and make a recommendation to the Board of Trustees to enter a contract for long-term lease.

The following factors will be considered in establishing long-term lease contractual agreements with lessees:

1. alignment with the Board of Trustees' approved long-term site plan
2. adherence to government regulations
3. maximization of lease income
4. integrity and stability of the lessee
5. assurance that the use of the facilities will not be contrary to the best interests of the Academy

If in favor, the Board of Trustees will make a recommendation to the Taiwan Provincial Morrison Christian Association Juridical Entity to enter into a long-term lease contract. These contracts must have the express written consent of the majority of the Directors of the Morrison Christian Association Juridical Entity. Long-term lease contracts will be signed by the chair of the Morrison Christian Association Juridical Entity and must be notarized by the appropriate Chinese court.

6/04

4294 SHORT-TERM LEASE CONTRACTS

Short-term lease contracts shall be those contracts which provide for leasing Morrison Academy facilities for 24 months or less.

The administration will have the authority to enter into short-term lease contracts and shall establish procedures for the use of facilities.

6/04

4295 FINANCE PROCEDURE MANUAL

The Director of Finance will be responsible to maintain and review the Finance section of the Administrative Procedure Manual. The Superintendent and/or SAC shall review the manual prior to implementation.

11/06

4296 INVESTMENTS

The Director of Finance shall monitor and report to the Board the status of all funds according to the following principles:

1. Disbursement, collection, and deposit of all funds will be scheduled to ensure maximum cash availability and return of investment.
2. Cash may be pooled for investment purposes.
3. Arrangements with financial institutions shall be reviewed on a continuing basis.
4. Funds for investment should be invested in moderate risk financial instruments, as recommended by the administration and approved by the Board. The risk will be assessed by the beta of the financial instrument which should not exceed .75 (or the equivalent of 13.5% standard deviation). In addition, the instruments chosen should have at least a 10-year history, with 8 out of 10 years having positive year end earnings.
5. Morrison will invest in corporations or entities that are ethical from a Biblical perspective. Morrison will avoid investing in corporations or entities that promote and/or derive a majority of income from abortion, pornography, tobacco, alcohol, gambling, or comparable industries.
6. All investment income, with the exception of the Endowment Fund, shall be accrued to the Current Fund.

11/06

4297 CASH MANAGEMENT

The Director of Finance shall adhere to the following cash management principles:

1. Building Fees shall be credited to the Plant and Development Fund.
2. The Board of Trustees shall approve the opening and closing of school checking, savings and other accounts in financial institutions such as U.S. Treasury notes, U.S. Government bonds and mutual funds. The Superintendent will designate those school personnel who will have authorization over such accounts. School bookkeepers and accountants will be ineligible for this responsibility, with the exception of the "Security Administrator" of the EC*Web Access Agreement.
3. The System Accountant is designated as the "Security Administrator" of the EC*Web Access Agreement. Users of EC*Web Access will be designated by the Director of Finance.
4. Disbursements from accounts with balances exceeding the equivalent of NT$2,000,000 will require at least two authorizers.

11/06

4305 BALANCED BUDGET

The projected annual expense of the school budget shall not exceed the projected annual revenue.

5/07

4310 BUDGETING PRIORITY

Morrison Academy will give first priority to educational programs and direct student services.

4315 DELINQUENT BILLS

Morrison Academy will pursue an aggressive policy of collecting school bills. Tuition and fees not paid within 30 days of the first day of the semester normally will result in the removal of the student from the school unless a Deferred Payment Plan has been agreed upon.

5/05

4320 TUITION AND FEES

ELL and Special Needs programs are not covered by tuition. Therefore, combined ELL and Special Needs fees shall cover personnel costs. A fee shall be charged to the parents of a student who has been identified as an ELL or a special needs student. These instructional fees will be based on the student’s level of need.

• Local church group - 30%,
• Mission group - 40%,
• Inter-mission group - 50%.

Any exception to the above discounts shall be reported to the Finance Committee.

5/08

4340 AUTHORIZATION OF EXPENSES

The annual line-item budget is approved by the Board.

Budgeted expense requests shall be authorized, in writing or electronically, by the appropriate administrator prior to payment.

Administrators may authorize overseas expenditures from accounts payable for the following academic year. These expenditures may not exceed 80% of the current year's expense budget for instructional supplies, textbooks, food, equipment, and capital. These payables will be automatically charged to the next year's budget.

5/05

4345 DECREASED ENROLLMENT

Should enrollment fall two percent below the budgeted student enrollment during a current year, the Board will require the administration to provide, by the following Board meeting, a list of expenditures to be reduced in order to maintain a balanced budget.

6/04

4350 PERSONNEL - ENROLLMENT AUTHORIZATION

The number of personnel assigned to each school campus will be authorized by the Board of Trustees through the budget process. The Enrollment/Full-Time Equivalent Ratio will be reported to the Board annually. Dorm, Special Needs, and Instrumental Music Lesson personnel will be excluded from calculating this ratio.

1/96

4400 FUND ACCOUNTING

To ensure observance of limitations and restrictions placed on the use of resources available to the school, the accounts of the school shall be maintained in accordance with the principles of fund accounting. Separate accounting shall be maintained for each fund.

6/04

4401 AUTHORIZED FUNDS

The following funds shall be maintained:

Current Fund

The Current Fund contains the economic resources for the day-to-day financial transactions of the school. The expenditure of these funds shall be determined by the yearly budget.

Plant and Development Fund

The Plant and Development Fund contains (a) unexpended funds to be used for the acquisition, renewal, or replacement of land and buildings and (b) funds already expended for and thus, invested in equipment, land, and buildings. The sources of income for this fund are transfers from the Current Fund, building fees, money raised through fundraising, and profits from non-operating sources. The annual transfer from the Current Fund plus the Building Fee must be at least 6.5% of the budgeted annual revenue. All expenditures from this fund must be authorized by the Board.

Endowment Fund

The Endowment fund contains economic resources invested to produce income that may be used to carry out specific objectives of the school. The primary sources of revenue of this fund are gifts and contributions from individuals, corporations, institutions, and Board authorized transfers. The principle of this fund is to remain in perpetuity. The creation of new endowments must be authorized by the Board.

5/07

4402 RESERVE ACCOUNTS

Chinese Retirement and Severance Reserve Account

Retirement and severance benefits for Chinese employees will be held in the Chinese Retirement and Severance Reserve Account. An adequate amount will be budgeted annually to insure that the Chinese retirement and severance benefits are at least 90% vested.

Crisis Plan Reserve Account

A minimum of one million US dollars will be held in a US account for the Crisis Plan Reserve Account to facilitate contingency plans in the event that the school must be closed for an indefinite period of time. This account will be subject to the same guidelines as in Policy #4296 INVESTMENTS. The minimum amount will be reviewed at least every two years by the Board of Trustees.

5/05

4403 YEAR END TRANSFER

At the close of each fiscal year the surplus or deficit in the Current Fund in accounts other than reserve accounts will be transferred to the Plant and Development Fund. It will be reported to the Board in the Year End Statement.

6/04

4410 ACCOUNTING STANDARDS

Morrison Academy will use accounting procedures and principles in accordance with the Generally Accepted Accounting Principles (GAAP), as they relate to not-for-profit organizations.

Morrison Academy will not postpone current obligations to the future, accrue future revenues to the current fiscal year, or extend the length of the fiscal year.

Full disclosure will be provided in the annual financial statements.

4/92

4420 FISCAL YEAR

The fiscal year runs from July 1 until June 30.

4/92

4430 ANNUAL AUDIT

An annual audit by a certified auditor shall be required at the end of each fiscal year.

4/92

4510 PROPERTY OF MORRISON CHRISTIAN ASSOCIATION

Morrison Christian Association may purchase, use or hold real property for school related use or investment purposes.

All property sale, purchase, and long-term lease transactions must have the express written consent of the Board of Trustees of Morrison Christian Association as well as the consent of the majority of the Directors of the Taiwan Provincial Morrison Christian Association Juridical Entity and must be registered with the appropriate Chinese authorities.