As a registered charity, and a very public one at that, it is imperative that we have financial controls that satisfy the expectations of the Charity Commission, the Wikimedia community and the Wikimedia Foundation. This is also a vital part of attainment of our PQASSO accreditation.
This policy reflects two major developments in the chapter's organisational structure, namely the appointment of our first permanent staff on 1 October 2011 followed by the approval of our charity status by the Charity Commission on 5 November 2011 with its duties and responsibility. Further changes are recommended following the Hudson review which led to the establishment of Board Committees and the CEO’s Delegation Scheme and the consequent need for revised Board-reporting procedures.
As part of this upgraded Financial Policy, the Board of Trustees agrees the annual plan with financial allocations for different activity areas, projects and grants. The CEO is instructed to administer the spending and the reporting against budget, with the ARC having responsibility for ensuring appropriateness of expenditure, reporting and auditing.
This Policy is intended to be flexible enough to allow for the expected growth of the chapter over the next few years, effective from 1 February 2012. In some areas there will be a period of transition before this policy is fully implemented. These areas, along with any other exceptions, will be included in the Chief Executive's report to each Board Meeting following the effective date. The policy was reviewed for operational effectiveness in October 2012, and will be reviewed annually thereafter by the ARC.
The Policy may, in exceptional circumstances, be overridden by the Chief Executive by prior agreement with the Chair as an emergency decision between Board Meetings. Any such override will be immediately reported by the Chief Executive to the Board.
The points of each policy area are given below. Those responsible for ensuring that the Policy is adhered to are noted in brackets.
2. Key Principles
The key principles underlying this Policy are:
- That our assets are safeguarded from loss, damage or fraud
- That our assets are applied to further our Objects in the most effective and efficient way
- That volunteers are facilitated to help deliver the Wikimedia UK mission
- That our finances and assets are administered in a way that identifies and manages risk
- That the controls in place are proportionate to the risks
- That the highest standard of record keeping and financial reporting is maintained
- That financial reporting is clearly expressed and highly transparent
- That duties are sufficiently segregated in order not to overburden any individual or allow an excessive concentration of authority
3. Personal integrity
Effective financial controls rely on the personal integrity of all the people involved - including those making payments, claiming for reimbursement, authorising, monitoring or controlling budgets.
- We will follow Charity Commission guidance regarding checks on trustees prior to appointment. (Administrator reporting to Govcom)
- Where issues are revealed or disclosed, these will be treated sensitively and discretely, having due regard for the privacy of the individual but ensuring that chapters' assets are not put at risk. (CEO and Govcom)
- Compliance with the Conflict of Interest policy will be monitored at least annually. (ARC)
- Post is held securely before collection. (CEO)
- Post is opened in the presence of two 'unrelated individuals' (i.e. who are not close relatives by blood or marriage and are not living as part of the same household) with rotating staff where practical. (CEO).
- All cheques and cash received held in a secure, locked place prior to banking (Administrator)
- All cheques and cash received recorded in a database (Administrator/Fundraiser)
- Cash received as recorded in the register is reconciled against paying in slips and bank statements at least monthly (Administrator with CEO and Accountant to ARC)
- Accurate Gift Aid records are kept and timely returns made. (Fundraiser)
- Regular spot checks are to be undertaken to ensure that Gift Aid declarations and claims are accurate. (Fundraiser with CEO and Accountant to ARC)
- Spot checks are to be undertaken to ensure that the funds from any Gift Aid claims are received and reconciled. (Fundraiser with Administrator and Accountant to ARC)
- Appropriate controls are put in place for any Trading Income (CEO)
- All donations in kind that are greater in value than £1,000 from any source for the financial year are duly recorded, together with a note of their value to the charity, in the accounting records. (Administrator)
- All donations received in cash, cheque, bank transfer, Paypal, text, direct debit or other fundraising mechanism are to be promptly thanked and recorded (Fundraiser)
- All donor communication received by the chapter is responded to quickly enough to comply with the Fundraising Agreement (Fundraiser)
- All direct debit instructions administered are processed in compliance with the Direct Debit regulations (Administrator/Fundraiser)
- Where restricted donations are accepted, records are kept of the restriction, (this should happen exceptionally, and on legal advice if necessary) and their own budget lines will be maintained within the accounting records. (Administrator and fundraiser)
- Adequate monitoring is undertaken to ensure there is no abuse of fundraising events (CEO)
- All donor data is encrypted and password protected in accordance with the Charity's data protection policies (Fundraiser)
- All bank accounts will be held in the name of Wikimedia UK (Administrator)
- No account will be opened or closed without Board authorisation (Administrator)
- Bank payments (cheque or BACS) require at least two signatories, unless the amount is for less than £300, in which case one signatory plus an authoriser is required (Administrator)
- Signatories on all bank accounts shall be decided by Board resolution (Administrator)
- The CEO will only be a signatory to current accounts, and will only be so in a dual signatory system (Administrator)
- No signatories can make or authorise payments to themselves with the exception of the CEO salary as shown in the payroll bureau’s monthly computations and where a trustee is the other signatory
- No third party shall be allowed to open accounts in our name (CEO)
- The credit rating, charges and interest of all banks used shall be reviewed at least annually. (Administrator to ARC reporting to the Board)
- Bank reconciliations are to be prepared monthly for all accounts. (Administrator reporting to CEO)
- Accounting records must clearly record all interest receipts (Administrator)
- A record is to be kept of all payments written (Administrator & Signatories)
- After each electronic banking transaction a printout is to be taken showing details of that transaction and stored as part of the accounting records (Administrator)
- Money held with any single financial institution or group should be no more than the current Government guarantee limit unless specifically authorised (Administrator to ARC reporting to the Board)
- Choice of deposit accounts will take account of credit worthiness, qualification for the government guarantee scheme (ie UK banks only and interest rates. (Administrator to ARC reporting to the Board)
- All PCs with banking access to be password protected in accordance with Wikimedia UK's data protection policies (Administrator)
- All passwords are to be kept confidential to each user in accordance with Wikimedia UK's data protection policies (Administrator and all users)
- All passwords are to be changed regularly and always following changes in authorised staff and trustees, in accordance with Wikimedia UK's data protection policies (Administrator and all users)
- Adequate training is to be provided to all involved in online financial transactions. (CEO)
- Any individual item or set of related items for ongoing use and valued at over £500 is recorded in the fixed asset register listing their purchase price, purchase date, description, any identifying marks and location. (Administrator)
- All assets are appropriately safeguarded from loss or damage (CEO)
- Adequate insurance cover is maintained to protect against any substantial loss. (CEO with Administrator)
- The value of any such fixed asset will be depreciated on a three-year, straight line basis or, unless the difference is immaterial, over its currently estimated useful economic life.
7. Wages and Salaries
- Full records of all payroll payments and deductions are maintained. (Our agency monitored by Administrator).
- Payroll and HMRC payments are made directly by the charity
- Monthly payroll reports from bureau are reviewed by Chief Executive with administrator
- Paper payroll records are held separately from any paper Human Resources files (Administrator)
- Statutory deductions are paid to HMRC monthly by the 15th of the month. (Administrator)
- Year end payroll declarations are completed (P35, P11D and P60s) (Our agency monitored by Administrator)
- The current Living Wage, or London Living Wage as appropriate, is adhered to as a minimum. (Administrator)
- All employees have a proper contract of employment. (CEO)
- A stakeholder pension scheme is provided for staff to opt in to, the employer contribution to which will be 6 per cent of the employee's salary (CEO)
- Procedures are in place to record starters, leavers, changes in salary, overtime, sickness, maternity etc. (Our agency monitored by Administrator)
- Annual appraisal and salary reviews are held based on RPI, performance and market forces (CEO or, in the case of the CEO, the nominated member of the Board)
8. Reporting (internally and externally)
- It is a condition of receipt of expenses that all expenses are published on an appropriate wiki so that the highest standards of transparency are maintained
- Individual expense claims are normally published on the office wiki (Administrator) with a summary of the claims posted on the public wiki.
- Office expenses and the Chief Executive's expenses are published on the public wiki in summary form i.e. the claimant’s name, the total amount of the claim and the nature of the claim in broad terms. (Administrator)
- Income and expenditure is regularly monitored against budget. (QFMR to ARC)
- Monitoring to include management accounts, a comparison of budget to actual figures, an explanation of variances and details of cash flow, card accounts and closing bank balances. (Administrator)
- Quarterly Balance sheets, and current activity statement by the CEO (which includes commentary on variances) and the SORP sheet which tallies with our annual accounts from the QMFR reports to be published on the public wiki after agreement from the Board meeting.(Administrator and accountant to CEO and ARC).
- Budget holders shall be members of staff subject to overall control by the CEO under his agreed financial authority. In line with good practice and spirit of Hudson review, volunteers may take leads on programme areas but the day-to-day control of budgets shall not be their responsibility.
- Budget holders notify relevant volunteers of detailed plans and budgets (Budget holders)
- Annual accounts are provided to the Charity Commission, Companies House and the Wikimedia Foundation as required. Board responsibility, with CEO now authorised to act as “CC-correspondent” and filing at CH being as directed by Board
- The Board must formally approve of any expenditure that exceeds £5,000, excluding recurring expenditure (such as salary, pensions and rent)
- Grants up to £2,000 that are outside of individual budget lines will be considered via the WMUK Grants process. Grants in excess of £2,000 are subject to a majority decision by the Board.
- Where grants also fall under the Wikimedia Foundation's grant processes, then those grants could first be submitted to Wikimedia UK, and where suitable they may subsequently referred to the WMF with WMUK's approval.
- Grants to the Wikimedia Foundation will be made in line with the advice of our lawyers, with individual transfers being made upon agreement from the Board on the advice of the ARC
10. Authorisation of expenditure
- Clear and public authority levels are agreed as set out in the scheme of delegation. CEO
- NB: See Procurement process for an explanation of how to follow this.
- All purchasing must be considered in terms of 'value for money' including:
- Whether the suppliers are reliable and reputable (Budget Holders)
- Whether the costs, measured against similar suppliers, are reasonable (Budget Holders)
- The purchase of any equipment or service must show evidence of comparative quotes as determined by the CEO. When the lowest quote is not chosen reasonable arguments must be supplied for the decision.
- All successful tenders for services over a threshold of £5,000 should have a mutually acceptable contract signed by both Wikimedia UK and the contractor
- Any records of communications with, or about, tenderers and contractors should be retained for at least three years following the termination of the contracts.
- We shall endeavour to choose suppliers and purchases that reflect the values of the chapter, in particular not-for-profit, open source and free information (Budget Holders)
- We shall endeavour to source local, environmentally friendly and sustainable suppliers where this is possible and does not conflict with another priority (Budget Holders)
- All procurement shall be subject to our Conflict of Interest policy (Budget Holders)
- We will take regular advice from accountants in order to avoid any unnecessary VAT obligations, where and if appropriate (CEO)
- All invoices are checked against goods or services received. (Administrator)
- All invoices are to be paid within the agreed terms unless disputed (Administrator)
12. Cheque and online payments
Secure procedures will be instituted for any payment by cheque including:
- Cheques must only be written in presence of documentation supporting the request for the cheque (Signatories)
- No pre-signed cheques may be provided (Signatories)
- Chequebooks kept in secure locked place (Administrator)
- Secure procedures will be instituted for payments made with online banking, working within the bank's system procedures to ensure separation of duties, and authorization at the appropriate levels.
13. Card payments
- Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after approval by the board (Administrator)
- Provision of a card can be withdrawn by the Board or by the Chief Executive at any time (Card users, CEO and Trustees)
- Individuals receiving a Wikimedia UK card shall agree to a deduction from their salary or other amounts owed to them in the event of improper use (Card users)
- If a card user ceases in their role with the chapter, their cards will be cancelled and destroyed (Administrator)
- All statements will be sent directly to the offices of Wikimedia UK (Administrator)
- All expenses incurred using a card must go through the usual authorisation processes (Card users)
- All card use must be supported by appropriate receipts etc.
- There will be an annual review of card use to ensure proper practice. (Administrator and ARC)
14. Regular bank payments
- There will be a quarterly review to ensure no redundant regular payments (standing orders or direct debits) are being made. If any redundant payments have been made, then a refund will be requested from the payee. (Administrator)
15. Cash payments
- Cash payments should generally be kept to a minimum, balancing the risks to the chapter against the convenience for individuals. (Administrator)
- An imprest petty cash system with a float of normally £250 will be maintained. (Administrator)
- Recipients sign for all payments received. (Administrator)
- The petty cash log sheets will be published publicly monthly (Administrator)
- Regular spot checks of Petty Cash are undertaken by a third party (CEO)
16. Small payments
- A new bank account will be used for payments of under £300.
- Such payments will require dual authorisation by staff members.
- The balance in this account will not exceed £4000
- The account will be maintained with an imprest balance of £4000 to be replenished as determined by the CEO.
These financial procedures will be subject to compliance monitoring from time to time with a view to reporting to the board any improvement needed.
- The committee feels that as is usual in this area the basic salary as calculated by our payroll bureau can be approved by JD with the usual second signatory.