Approved by FECA Management Committee
The Trustees recognise the importance of keeping accurate and transparent financial records so that:
- the charity meets its legal and other statutory obligations
- the Trustees can fully exercise their responsibilities to have proper financial control of the charity
- the charity meets its contractual and commercial obligations
- the charity meets the requirements of its stakeholders.
This policy intends to safeguard the assets of the Fen Edge Community Association and to provide procedures for controlling the finances of the charity.
This policy is subject to approval by the FECA Management Committee.
2. Compliance and Roles
All Trustees and members of trustee sub-committees shall comply with these policies and procedures.
The Trustees are responsible for oversight of the operation of this policy. The Management Committee is responsible for the implementation of this policy.
The Treasurer is responsible for the day-to-day financial management of the charity and ensuring that information is presented in a clear and understandable way to the Trustees and Management Committee. This information includes the financial position of the charity and any issues relating to this policy
The FECA Chair and bank account signatories have specific duties identified below.
Any specific duties undertaken by the Treasurer and Management Committee do not reduce the Trustees’ collective responsibility to make sure that the financial affairs are being managed in a professional and prudent manner and that risks are minimal.
No single individual may have complete control over the entire sequence of financial transactions.
All bank accounts shall be in the name of the Fen Edge Community Association.
The charity shall have a current account. This account shall be used for all general banking. Any change to banking providers (or additional accounts opened) must be agreed and approved by the Trustees.
The bank mandate shall list the people who can sign cheques on the charity’s behalf. Changes to the bank mandate may only be made by a decision of the Management Committee. There shall be at least three signatories on the bank mandate.
Those on the bank mandate shall have equal electronic access to the account. They shall each have a unique password.
The charity shall require the bank to provide statements every month or access to electronic statements. These statements shall be reconciled with the record of transactions at least every two months by the Treasurer and the current status presented at each Management Committee meeting.
4. Other investments
Additional funds may be held in an interest-bearing savings account.
The Treasurer and the Chair shall each hold the login details and password for the Savings Account.
Apart from the current account and savings account, the charity shall not use any other bank or financial institution or use overdraft facilities, credit cards or loans without updating this policy, except that surplus funds may be invested in appropriate Societies in accordance with the Trustees Investment Act (which allows part of the funds to be invested in equities as well as fixed interest stock). The charity shall not speculate with funds in investments which carry any significant risk.
All monies received shall be recorded and banked within 2 weeks. The Treasurer shall maintain a paying-in book.
Cash received shall be counted by two people and banked intact, credited to the appropriate budget head and not used for other purposes. A cash collection sheet shall be filled in recording the source of income.
The Treasurer shall issue sales invoices (where required) with unique reference numbers for customers to use when making payments, to ensure that receipts can be traced to the customer.
Receipts shall be issued on request.
The charity shall keep a record of aged debtors and contact debtors every month.
All expenditure shall be on the charity’s business only and is authorised and managed as described in this section.
The following expenditures must be authorised by the Management Committee in advance and shall be recorded in the Management Committee minutes:
- The production costs of the FEN edge news, subject to a budgetary estimate
- Capital purchases
- Grant payments authorised through the Grants Policy
The following expenditure is at the discretion of the Treasurer, and shall be reported to the next Management Committee:
- Purchases up to £250
- Expenses up to £250
In exceptional circumstances, expenditure that exceeds these discretionary limits and for which there is no prior authorisation by the Management Committee may be made with the Chair’s approval. The Chair shall then provide full details to the next meeting of the Management Committee.
Authorisation to sign a contract, legal agreement or lease committing the charity to over £250 expenditure requires prior approval by the Management Committee.
The Treasurer shall be responsible for holding the cheque book (including unused and partly used cheque books) which should be kept securely. Passwords and log in for BACS payments shall be kept securely and never written down or disclosed to anyone.
Both cheque and BACS payments must be authorised/signed by two separate people. The Treasurer shall be a signatory.
Blank cheques shall never be signed.
A cheque or BACS payment must not be authorised by the person to whom it is payable.
A signatory shall not authorise a payment until the signatory is satisfied, through sight of an order form, invoice, or similar written evidence, of the validity of the payment. Signatories are responsible for examining the payment documentation (purchase invoice etc) prior to signing a cheque or authorising a BACS payment. The documentation may be provided in electronic form.
Signatories are responsible for examining the cheque or payment request for accuracy and completeness.
The relevant payee’s name and amount to be paid shall always be inserted on the cheque before signature; the cheque stub shall always be completed in full. For an electronic transfer, the Treasurer shall check and enter the supplier’s account name, sort code and account number into the system.
The signatory shall check the payment details: sort code, account number, invoice and amount. If these are accurate the signatory shall authorise the payment.
Following authorisation, the signatory shall e-mail the Treasurer to confirm their authorisation. This email shall act as evidence for the Independent Examiner as to who authorised the payment.
8. Expense Claims
The charity shall, if asked, reimburse expenditure on the charity’s business paid for personally by Trustees, committee members or volunteers.
All claimants must complete and sign a FECA Expense Form. Whenever possible, original receipts or a redacted bank statement should be provided.
9. Petty Cash
Petty cash may be kept by the Treasurer, whereby the Treasurer is entrusted with a float as agreed by the Management Committee. When the float is more or less expended, a cheque for cash or BACS payment to the float holder, shall be drawn for sufficient funds to bring the float up to the agreed sum.
The cheque or BACS payment shall be supported by a complete set of expenditure receipts, totalling the amount required to top up the float to the agreed sum.
10. Financial Records and Accounts
The charity shall keep proper books of accounts which include a cash book analysing all the transactions in the charity’s bank account(s). This book may be a computer package, Excel, or paper supported by a clear audit trail.
The Treasurer is responsible for the maintenance of financial records. All the charity’s financial records shall be kept securely and kept for seven years in accordance with the Charity’s Act 2011. Note that the FECA Data Protection Policy might require that some of this information is kept confidential.
Every payment out of the charity’s current account shall be evidenced by an original invoice/expense form. The original invoice/expense form shall be retained by the Treasurer and filed. The Treasurer should ensure that it is referenced with:
- Cheque number or Electronic reference
- Date cheque drawn/Transaction date
- Amount of payment
- Name of person(s) who authorised payment
All accounts and cash books kept electronically shall be backed up regularly (at least monthly) and the backup copy stored separately from the original.
The financial year ends on the 31st March each year.
Accounts shall be drawn up within three months of the end of the financial year and presented to the next Management Committee meeting and Annual General Meeting.
An annual independent examination shall be carried out by independent examiner appointed each year by the Management Committee.
The Treasurer shall file the approved accounts with the Charity Commission as they require.
11. Financial Reports
The Treasurer shall prepare a financial report to the Management Committee on the charity’s financial situation and any issues requiring approval or action for each meeting of the Management Committee.
The financial report shall include:
- Cash reconciliation
- Profit & Loss
- Balance Sheet
- For expenditures authorized by the Management Committee (excluding grants), a report comparing expenditure with the amount authorised by the Management Committee
- For expenditures at the discretion of the Treasurer, a description of the amount and purpose
- Grants paid and grant payments pending
The charity shall take out annual public liability insurance. The charity shall maintain adequate insurance cover for its activities and assets.
13. Fixed Assets
A list or register of fixed assets with a value greater than £1,000 shall be maintained and updated at least annually. Information held on each asset shall include date of purchase, cost, name and address of supplier, serial numbers, details of guarantees as appropriate, normal location together with an appropriate record of their use. Assets must be checked bi-annually, and adequate insurance cover taken out.
14. Fundraising and Grant Applications
All fundraising and grant applications shall be done in the name of the charity with the prior approval of the Management Committee or, in urgent situations, the approval of the Chair who shall provide full details to the next Management Committee meeting.
15. Reserves policy
The charity shall review the level of reserves held at each Management Committee meeting.
No budget or expenditure shall be approved that brings the reserves below £25,000.