FINANCIAL CONTROL PROCEDURES AND INVESTMENT POLICY
Lead Trustee - Treasurer Contact firstname.lastname@example.org
ADOPTED 8.2. 2018 Review Due September 2018
This document provides a framework for dealing with any financial transactions on behalf of The Friends of BAYOC.
This in turn will ensure we have the correct internal financial controls and procedures in place to enable us to function as responsibly as a charity.
The aims of the internal financial controls are:
• To protect all individuals and assets
• To identify and manage risk of conflicts of interest, loss, theft or fraud
• To ensure that financial reporting is robust and of sufficient quality
• To ensure that we comply with law particularly relating to finance.
One of the most important financial monitoring activities is budgetary control, ie monitoring The Friends of BAYOC financial performance against a budget.
Proper estimates of income and expenditure need to be made for each area of The Friends of BAYOC activities for each financial year up to a maximum of 3 years in advance.
From this information the overall budget should be agreed by the Trustees before the start of the financial year to which it relates.
Reviewing Finances at Trustee meetings
Trustees will review income and expenditure against the budget during trustee meetings at least 3 times per year. and use this to determine how we use and commit future funds.
The financial information provided for each review meeting should include details of The Friends of BAYOC financial position and performance.
The financial information should be sent to each Trustee before each meeting and would include:
• A comparison of budget to actual figures.
• An explanation of variances between forecasts and what has actually happened
• Details of closing bank balances
• List of all payments made since last meeting
• Details of current stock holding of blouses, shirts & ties bysize
The meeting should set aside specific time within the agenda for discussion of financial matters and allow committee members to raise any issues or concerns.
The following will ensure we have the correct procedures and controls in place to ensure that all income is accurately handled, recorded and banked as quickly as possible. When handling income at a public or fundraising activity the following internal controls should be adhered too:
• Cash Floats are signed for upon receipt from the Treasurer via a receipt book
• Where possible two people should be involved in handling and recording the money received and complete a Cash reconciliation sheet. On any occasion that only one person receives and handles cash on behalf of The Friends of BAYOC , the individual should be a known trustworthy supporter, preferably a committee member or director.
• Floats and income for activities are labelled and accounted for individually
• Cash and cheques are banked as soon as possible without deduction of expenses
• Individual records are maintained of all membership fees including The BAYOC 100 Club subscriptions collected on an annual basis
• Records are maintained for individual activities in sufficient detail to identify gross receipts or takings and costs incurred
• Review annually at the AGM:
- Membership fees
- BAYOC 100 Club Subscriptions
- Shirt fees
The following will ensure that we have the correct procedures and controls in place to ensure that only necessary authorised purchases are made and that funds exist within approved budgets to meet the expenditure.
• The Charity will manage its own cash deposits and has nominated a list of authorised signatories, two of which are required to sign instructions to the deposit taking institution.
• Set annual authority levels (Appendix 3) for the Chairman and the Treasurer of The Friends of BAYOC and the BAYO Pyramid Head which should be reviewed annually at the AGM
• All orders, payments and expenses on behalf of The Friends of BAYOC must be pre authorised at a committee meeting and recorded in the minutes of that meeting. In exceptional/ emergency situations the Chairman and the Treasurer of The Friends of BAYOC and the BAYO Pyramid Head can place orders and make payments but must adhere to the procedures as determined by the Authority Levels.
Committee Member Expenses
Under £100 Chair and Treasurer to authorise.
Over £100 Trustees via email to authorise.
Purchase of goods and services.
Under £500 Chair and Treasurer to authorise.
Over £500 Trustees via email to authorise.
• All invoices received should be made out to The Friends of BAYOC and will be checked against the agreed budget – additional spending outside agreed budgets should be authorised following the above procedure.
• All expenses incurred on behalf of The Friends of BAYOC should be detailed on The Friends of BAYOC Expense Claim Form (Appendix 4) and sent to the Chairman for Authorisation, who will then forward to the Treasurer for prompt payment. This should include details of the claim and must include receipts for all expenditure. In exceptional circumstances where no receipt is available full details must be included on The Friends of BAYOC Expenses Claim Form and alternative proof of payment must be provided to confirm amounts.
Where possible, to minimise The Friends of BAYOC cash payments, reimbursements should be made by Cheque or BACS transfer. Payments Cheques – Although the use of cheques to make payments is diminishing with the use of electronic payments, cheques continue to be used and it remains important that payments are only made for expenditure properly authorised and incurred by The Friends of BAYOC.
The following should be adhered to:
• Ensure cheque books are kept in a secure place
• Review bank mandates and authority levels annually
• Prohibition on the signing of blank cheques
• Prompt recording of payments in cash books including details of cheque number, nature of the payment and the payee
• Obtaining documentation to support the validity of the payment including relevant invoices and confirmation that the goods or services have been received.
Payments in cash should be kept to a minimum due to the greater risk that handling cash presents and the difficulties that can arise in establishing correctness and control over cash transactions.
• Cash payments for small amounts only up to a maximum value of £20
• Cash should be paid out of a petty cash float specifically kept for such payments, and not from incoming cash or by way of direct withdrawal from the bank account
• Details of payments should be entered in a petty cash book
• Supporting documentation & completion of The Friends of BAYOC Expenses Claim Form for the cash payment should be authorised as for other payments
• The maximum balance of the petty cash in hand should not exceed £100, and the records & cash should be kept securely at all times Banking Controls and procedures
• Cheque and cash receipts should be promptly recorded in the accounting records
• Cheques and cash should be banked regularly and promptly
• Cheques and cash not banked on the day of receipt should be placed in a safe or locked cash box
• Funds should normally be banked gross without deduction for costs or expenses Annual Accounts & Independent External Auditing/Scrutiny Following the end of the financial year, 31st August, the accounts should be balanced and closed off. They should then be independently audited by an appropriate person in time for The Friends of BAYOC Annual General Meeting in October.
Investment Policy and Attitude to Risk
The Charity holds financial assets to fund expenditure and maintains a reserve and assets should be invested to minimise risk.
The Charity's assets will be held in cash or near cash investments denominated in sterling
The Charity's cash balances will be deposited with institutions with a minimum rating of A.