1.1 To define the financial systems used by Community Organisation and how they relate to all areas of the organisation.
2.1 Relevant to budget holders and finance staff. All suggestions for amendments to Senior Staff.Minor amendments/updates to be agreed by Internal Management Team; major amendments by Finance & Resources Sub-group.
3.1.1 All staff need to be aware that expenditure is committed when an order is placed on behalf of Community Organisation, not when the cheque is requested. Therefore, it is important that all orders are placed properly, and are within agreed budgets and delegated powers.
3.1.2 Budget holders can place orders for goods or services within their budget areas, subject only to cash flow restraints. All orders must be authorised by the budget holder.
3.1.3 Orders of £500 or more must be placed in writing. Orders under £500 but over £100 should be in writing where practical.
3.1.4 Suppliers must be requested to produce invoices. If payment is needed on or before delivery or no credit is given, a formal request from the supplier should be provided.
3.1.5 While claims for small items of expenditure may be made via petty cash (see section 3.4), adequate supporting documentation eg, receipts must be obtained. Large items requiring cash payment must be checked with the Senior Staff before the arrangement is confirmed.
3.1.6 Orders over £2,000 but less than £5,000 must be cleared with the Senior Staff before confirmation.Items or cumulative orders of more than £5,000 must be authorised by the Senior Staff and a Finance Sub-group member before confirmation.
3.2.1 All invoices must be authorised for payment by the budget holder.The budget holder is responsible for ensuring invoices are accurate in terms of figures and conformity with the order placed, that the services or goods have been received, and following up any problems.The finance worker must be informed if there are queries delaying authorisation or if payment is to be withheld for any reason.
3.2.2 The finance worker will record all incoming invoices as they arrive, and pass to budget holders for authorisation. Once authorised as above, suppliers will be paid within the appropriate timescale. This is generally 14 days of invoice date for rent and cleaning of Norvin House, 30 days for others, unless specific arrangements have been made with the supplier.
3.2.3 Refunds of overpayments or cancellations of bookings/orders can be fully delegated to the relevant budget holder to chase up (note that this does not include any €˜compensation or similar payment).
3.3.1 Signatories will be the Senior Staff and representatives of the current trustees, including the Chair and Treasurer.Any new signatory must be approved by the trustees before the relevant documentation is sent to the bank.All cheques require two signatories. Cheque signatories should check that the expenditure has been authorised by the appropriate person before signing the cheque. Salary payments require the signature of the Senior Staff.
3.3.2 Signatories will not sign cheques which are payable to themselves, or blank cheques. Cheques should be filled in completely (with payee, amount in words and figures, and date) before cheques are signed.
3.3.3 The day-to-day limit on encashment of cheques is £1,000.Where a larger cash float is required (for a major event for example), this must be approved by the Senior Staff in advance.When signing cheques to restore the imprest balance (see section 3.4), receipts accompanied by an add-list must be presented with the cheque request.
3.4.1 Petty cash will be topped up on the €˜imprest system, where the amount spent is reimbursed. It is intended for small items, up to £20. Anything over this should be paid by cheque where possible. The imprest has a balance limit of £60. The petty cash balance will be reconciled when re-storing the imprest balance, or monthly if this is more frequent.
3.4.2 All cash collected from the finance worker will be signed for, and receipts will be issued for all cash returned. Specific extra cash floats (eg, for reimbursement of volunteer expenses) should be arranged with the Senior Staff. The person signing for the float is responsible for ensuring cash and receipts are returned as soon as possible after the event. No further floats may be issued to that person, or another person in the same department for a similar purpose, unless the previous float has been accounted for.
3.4.3 Any cash income will be banked by the finance worker, and not used for petty cash expenditure. Such cash will be passed to the finance worker:
3.4.4 Cash will be kept in locked metal cabinets in the safe within the south meeting room.
3.5.1 Commu8nity Organisation is required to operate the PAYE system, and make annual returns to the Inland Revenue. All people working directly for Commu8nity Organisation, whether permanent or temporary, must provide a P45, or sign a P46 or student exemption certificate, or give reasons why they cant. All payments will be made by direct bank credit.
3.5.2 It is the nature of Community Organisations activities that a large number of freelance consultants are engaged. Freelance consultants will only be taken on when authorised in accordance with section 3.1 above.They will be treated as self-employed, and contracts with such people must clearly indicate this.
3.5.3 Payments for additional work over and above standard hours must be approved by the Senior Staff.Clear written authorisation must be given in adequate time for the finance worker to process it for the relevant payroll. These claims are financial records, and should be treated in the same way as any other.
3.5.4 Payment will usually be made via the NatWest Autopay service, direct to employees bank account. The salary payment listings will be checked by the finance worker.Salaries will be paid on the 28th of the month, or the nearest working day.
3.5.5 Pay scales and new posts/re-structuring are approved by the Senior Staff, and are revised by March for implementation in April. The trustees will set the Senior Staffs remuneration. Appointments to existing posts are the responsibility of the appropriate manager (or Senior Staff for senior positions).
3.5.6 Staff loans are not issued, but advances may be made against salary due, by arrangement with the Senior Staff.
3.5.7 The finance worker is responsible for:
3.6.1 The majority of income received by Community Organisation is from funding by contracts, grants or service level agreements.A small income is also derived from the sale of services.Invoices will be issued for every source of income as soon as practical. For completeness of customer and sales information, this includes where payment is received with order.
3.6.2 All invoices should be raised on Community Organisation letterhead, or in a format agreed with the Senior Staff and auditors, and be drawn up in accordance with Commu8nity Organisations standard invoice requirements.Quarterly invoices will be presented 72 days before payment becomes due.
3.6.3 Outstanding invoice payments will be followed up at least monthly by the finance worker.
3.6.4 Information about non-routine and all grant income must be passed to finance worker with the cheque or remittance advice. This will be filed by the finance worker for reference, and used to ensure such income is correctly recorded in the accounts and grant conditions etc. noted.The Senior Staff and the finance worker will ensure all grant income is claimed as it becomes due or available, and that all appropriate staff are aware of relevant grant conditions and exactly how the grant is to be expended.
3.6.5 Post opening (and control of cheques and cash in) will be subject to random management checks. The process will be written down, so that there is a clear standard for those doing the work regularly, and others covering or checking.
3.7.1 Community Organisations bankers are:
3.7.2 An automatic sweep arrangement between current and reserve accounts is operated. These arrangements are subject to review, in the light of what is most advantageous in terms of cost and service. All changes are to be authorised by the Trustees.Not in place yet but recommended by AH.
3.7.3 All income will be paid into the current account as soon as possible, not less than once a week. The make up of each banking will be clearly recorded, for later computer entry.
3.8.1 Proper accounting records will be kept. The accounts system is based around computer facilities, using Sage and Excel, but manual/paper records will also be used if appropriate.
3.8.2 At a minimum, the following records will be kept:
3.8.3 Petty cash and bank accounts will be reconciled at least monthly.
3.8.4 All vouchers entered into the computer system will be clearly initialled by the person entering it, along with date and accounts reference. All income/expenditure information will be recorded within seven days. All corrections and adjustments will be clearly noted in a written €˜Journal giving reasons for them, with supporting documentation where available.
3.8.5 Purchase Ledger, other cheque payments and banking sheets will be filed in the appropriate reference order, with any supporting documentation. All petty cash vouchers, cheque stubs etc. will be retained for audit and for statutory purposes thereafter.
3.8.6 All fixed assets costing more than £1,000 (or such other level as may from time to time be agreed by the trustees) will be capitalised in the accounts and recorded in a fixed assets register. This register will record details of date of purchase, supplier, cost, and serial no. Where applicable, description and in due course details of disposal.
3.9.1 12 monthly income and expenditure budgets will be prepared in time for final approval by the trustees in March, before the start of the financial year under consideration.
3.9.2 The Senior Staff, in consultation with the bookkeeper, prepares budgets for all teams. The Senior Staff will discuss the budgets with the Internal Management Team, ensuring that budgets are set fairly, efficiently and in time. Approval of the budgets is by recommendation of the Senior Staff to the trustees.
3.9.3 The approved budget will be used as a base to construct a cash flow forecast for the year, which will be updated quarterly.
3.10.1 All budget holders will receive appropriate, regular reports of income and expenditure against budget.
3.10.2 The Senior Staff will receive:
3.10.3 Detailed monthly payroll reports will be produced. Detailed cash flow reports will be produced as appropriate.
3.10.4 Commu8nity Organisations financial year is from 1st April to 31st March.Annual accounts will be submitted for audit, as required under the Companies Act, charity regulations and grant conditions, prepared per SORP for Charities and any other relevant accounting conventions. Final draft should be ready for and passed by the trustees in April, with audited accounts signed at the May meeting.
3.11.1 The Treasurer works in close co-operation with, and provides support and advice to, the Senior Staff. Specific responsibilities are to:
3.12.1 The Internal Management Team consists of the Senior Staff, the manager of the Capacity Building team and the manager of the volunteer bureau.Each has responsibility for their individual teams financial performance and ensuring that the team complies with Financial Procedures. They will receive monthly management accounts, keeping adequate records to be in control between monthly reports. The Internal Management Team will monitor finances at monthly meetings.
The Management Committee is responsible for:
The Senior Staff is the lead person for processing all changes and exceptional items, and will assist the Treasurer in any financial matter connected with the organisation.
The Senior Staff will ensure that adequate security precautions are taken to safeguard financial and other assets.
Delegated levels of authority were agreed at the Finance Sub-group meeting of 28th July 2007 and ratified by the Management Committee on 24th September 2008.
Delegated Authorities these have been revised as follows:
Up to £500 by the Line Manager
Up to £1,000 by the Chief Executive
Up to £2,000 by the Chief Executive or Treasurer
Up to £5,000 by the Chief Executive and Treasurer/Finance Sub group member
Above £5,000 by the Finance Subgroup