Difference between revisions of "Finance Policy"

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(Update to latest board approved version)
(Updated the policy approved at the September 2018 board meeting.)
 
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{{BoardApproved|office:Decisions/Scheme of Delegation|29 April 2013|type=policy|
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{{BoardApproved|office:Decisions/Scheme of Delegation|9 February 2014|type=policy|
 
history =  
 
history =  
{{BoardApprovedHistory | office:Decisions/Scheme of Delegation | 29 April 2013 | Revision as per adoption of the [[Scheme of Delegation]] | 39455}}
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*{{BoardApprovedHistory | office:Decisions/Financial and Expenses procedures update Feb 2014 | 9 February 2014 | Update; expense procedures split off to a separate document | 51641}}
{{BoardApprovedHistory | Minutes 26Mar13#Amendment to Finance Policy | 26 March 2013 | Revision of car mileage rates |42454 | lastid=39455}}
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*{{BoardApprovedHistory | office:Decisions/Scheme of Delegation | 29 April 2013 | Revision as per adoption of the [[Scheme of Delegation]] | 39455}}
 +
*{{BoardApprovedHistory | Minutes 26Mar13#Amendment to Finance Policy | 26 March 2013 | Revision of car mileage rates |42454 | lastid=39455}}
 
* [[Minutes 9Feb13|9 Feb 2013]] - [//wikimedia.org.uk/w/index.php?title=Finance_Policy&oldid=37690 Pre-Scheme of Delegation revision approved]
 
* [[Minutes 9Feb13|9 Feb 2013]] - [//wikimedia.org.uk/w/index.php?title=Finance_Policy&oldid=37690 Pre-Scheme of Delegation revision approved]
 
* [[Minutes_8Sep12#Finance_policies_and_recommendation_regarding_depreciation|8 Sep 2012]] - [//wikimedia.org.uk/w/index.php?title=Finance_Policy/2012&oldid=28652 Revision approved]
 
* [[Minutes_8Sep12#Finance_policies_and_recommendation_regarding_depreciation|8 Sep 2012]] - [//wikimedia.org.uk/w/index.php?title=Finance_Policy/2012&oldid=28652 Revision approved]
 
* 24 Jan 2012 - [//wikimedia.org.uk/w/index.php?title=Finance_Policy/2012&oldid=18665 Revision approved]
 
* 24 Jan 2012 - [//wikimedia.org.uk/w/index.php?title=Finance_Policy/2012&oldid=18665 Revision approved]
 
* 2011 - [[2011 Budget/Controls]]
 
* 2011 - [[2011 Budget/Controls]]
| lastid=42454
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| lastid=51641
 
}}
 
}}
 
{{TOC right}}
 
{{TOC right}}
  
==1. Introduction ==
+
== Purpose ==
 +
As a [[charity status|registered charity]] and company limited by guarantee we are required to maintain accounting records and controls to satisfy the requirements of the Companies Act 2006 and Charities Act 2011.
  
As a [[charity status|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 [[:wikipedia:PQASSO|PQASSO]] accreditation.
+
The trustees of the charity, who are also directors of the company, have a legal duty to safeguard its assets and apply them exclusively to the furtherance of its declared charitable aims and objectives.  
  
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.
+
These requirements are expanded by the key principles listed in section 2.  
  
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.  
+
Within this Purpose the Policy may, in exceptional circumstances, be overridden by the Chief Executive Officer (CEO) by prior agreement with the Chair or Treasurer as an emergency decision between Board Meetings. Any such override will be immediately reported by the CEO to the Board.
  
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 CEO is responsible for ensuring that the Policy is adhered to, in conjunction with, and subject to the overall legal responsibility of, the board of trustees.
  
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.
+
== Key Principles ==
 +
The key principles underlying this Policy are that:
  
The points of each policy area are given below. Those responsible for ensuring that the Policy is adhered to are noted in brackets.  
+
# Legal obligations to keep adequate records to be able to prepare, publish and file statutory accounts are satisfied
 +
# Assets are safeguarded from undue loss, and from misuse, damage or fraud
 +
# Assets are applied to further our Objects in the most effective and efficient way
 +
# Finances and assets are administered in a way that identifies and manages risk
 +
# Controls in place are proportionate to the risks
 +
# The highest standard of record keeping and financial reporting is maintained
 +
# Financial reporting is clearly expressed, comprehensive and transparent
 +
# Duties are sufficiently segregated to satisfy the demands of charity governance
  
== 2. Key Principles ==
+
== 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.
  
The key principles underlying this Policy are:
+
# We will apply Charity Commission guidance regarding checks on trustees and members of the senior management team prior to appointment.
 +
# Where issues are revealed or disclosed, these will be treated sensitively and discreetly, having due regard for the privacy of the individual but ensuring that chapters' assets are not put at undue risk.
 +
# Compliance with the Conflict of Interest policy will be monitored at least annually.  
  
# That our assets are safeguarded from loss, damage or fraud
+
== Accounts, accounting records and internal controls ==
# That our assets are applied to further our Objects in the most effective and efficient way
+
Accounting records and internal controls shall be maintained to allow the timely production of quarterly financial management reports and statutory accounts that satisfy external auditors or independent examiners, and any conditions imposed by any grantor that have been accepted by the Board.
# 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 ==
+
== Audit ==
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.
+
Accounts shall be prepared annually and audited by registered auditors appointed by the company at the previous Annual General Meeting. Where allowed by charity law the Board may, at its discretion, opt for the statutory accounts to be independently examined instead of audit and references to audited accounts in this policy shall be read to include that option.  The Board shall consider the reasonable requirements of major donors or grantors when exercising this option.
# 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)
 
  
==4. Income==
+
== Budgeting ==
 +
The Board shall agree an annual budget, where possible before the start of the financial year to which it relates to give effect to the operational plan agreed for the year.  Information shall be collected as is necessary to prepare a budget on a direct costs and an absorbed costs basis by the start of each financial year.
  
# Post is held securely before collection. (CEO)
+
The annual budget shall include a projection of income and the reserves position at the end of the forthcoming financial year.  The annual budget and projection of income shall be reviewed by the Audit and Risk Committee (ARC) before presentation to the Board for their agreement.
# 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)
 
  
==5. Banking==
+
The agreed annual budget shall be reforecast if in the opinion of the Chief Executive there is a material change that warrants it and in that event the reforecast budget shall be reviewed and approved by ARC and the Board at their next scheduled meetings.
  
# All bank accounts will be held in the name of Wikimedia UK (Administrator)
+
== Income and Expenditure ==
# No account will be opened or closed without Board authorisation (Administrator)
+
Detailed regulations on the procedures around the acceptance and recording of income and the incurring of expenditure shall be maintained and agreed by ARC. The following principles shall be followed:
# 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<ref>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.</ref>
 
# 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)
 
  
==6. Assets==
+
Acceptance of non-immaterial donations subject to donor restrictions of any kind shall be subject to Board agreement in accordance with the Donations and Grants Acceptance Policy
  
# 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 payments from any source must be from budgeted expenditure or otherwise approved in accordance with the Procurement Policy and the Scheme of Delegation.
# 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==
+
No commitment to expenditure shall be made without the prior knowledge and agreement of the relevant budget holder.
  
# Full records of all payroll payments and deductions are maintained. (Our agency monitored by Administrator).
+
Creditors shall be paid promptly in accordance with terms agreed.
# 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)==
+
== Banking ==
  
# 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
+
# All bank accounts will be held in the name of Wikimedia UK
## Individual expense claims are normally published on the office wiki (Administrator) with a summary of the claims posted on the public wiki.  
+
# No account will be opened or closed in the name of the charity without Board authorisation (except that an account that is in the view of ARC redundant may be closed and noted at the next Board meeting).
## 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)
+
# Signatories on all bank accounts and electronic banking powers shall be decided by Board resolution.
# Income and expenditure is regularly monitored against budget. (QFMR to ARC)
+
# Bank payments or other written instructions require at least two signatories except as described in paragraphs 5 to 8.
# 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)
+
# Electronic banking payments will be set-up online and authorised in accordance with the Scheme of Delegation concerning small or recurring payments.
# 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).
+
# The Treasurer shall act as the administrator of the electronic banking system.
# 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.
+
# The CEO will be a main mandate signatory and can be a signatory to current and deposit accounts
# Budget holders notify relevant volunteers of detailed plans and budgets (Budget holders)
+
# No signatory or authoriser may authorise payments to themselves as a sole authoriser.
# 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 credit rating, charges and interest of all banks used shall be reviewed at least annually.
# The Board must formally approve of any expenditure that exceeds £5,000, excluding recurring expenditure (such as salary, pensions and rent)  
+
# Bank reconciliations are to be prepared monthly for all accounts including credit, debit or any other type of payment card. These shall be reviewed by the Chief Executive, who may delegate this task to the Director of Finance and Operations.
 +
# All transactions shall be recorded in accordance with standard accountancy practice using software approved by ARC that allows accounts to be produced readily that comply with the requirements of the Charities Statement of Recommended Practice: SORP(FRS102)
 +
# If so specified by a grantor and agreed by the Board income shall be treated as a discrete (restricted) fund and expenditure shall record the fund from which it is made.
 +
# Money held with any single financial institution or group should be no more than the current Government guarantee limit unless specifically authorised.
 +
# Choice of deposit accounts will take account of credit worthiness, qualification for the government guarantee scheme (ie UK banks only) and interest rates.
 +
# Adequate training (in house or otherwise) is to be provided to all involved in online financial transactions.  
  
== 9. Grants==
+
== Assets ==
# 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
+
# A Register of Fixed Assets shall be maintained listing all assets at or above a value determined from time to time by ARC.  
 +
# All physical assets shall be physically verified at least once a year or more frequently where the Chief Executive considers it appropriate.
 +
# All assets shall be appropriately safeguarded from loss or damage
 +
# Adequate insurance cover shall be maintained to protect against any substantial loss.
  
===11. Procurement===
+
== Wages and Salaries ==
::''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===
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# Full records of all payroll payments and deductions shall be maintained and returns and payments made to satisfy audit and HM Revenue & Customs regulations.
 +
# Payroll may be outsourced to a reputable bureau.
 +
# Where payroll services are outsourced the performance of the bureau shall be reviewed annually.
 +
# Payroll and HMRC payments shall be made directly by the charity.
 +
# Monthly payroll reports are reviewed by the Director of Finance and Operations (DFO) or the Chief Executive.
 +
# Statutory returns and payment of deductions shall be made to HMRC by due dates.
  
Secure procedures will be instituted for any payment by cheque including:
+
== Reporting (internally and externally) ==
# 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===
+
# A Quarterly Financial Management Report (QFMR) approved by ARC shall be presented at each Board meeting held more than one month after a quarter end (April, July, October, January).
 +
# Audited annual accounts shall be filed with the Charity Commission, Companies House, the Wikimedia Foundation and published to members as required.
  
# Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after approval by the board (Administrator)
+
== Authorisation of expenditure ==
# Provision of a card can be withdrawn by the Board or by the Chief Executive at any time (Card users, CEO and Trustees)
+
Clear and public authority levels are agreed as set out in the scheme of delegation.
# 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)
+
All expenditure from any source shall be pre-authorised by a budget holder.
  
===15. Cash payments===
+
== Payments ==
 +
Secure procedures will be agreed for any payment working within the bank's system procedures to ensure separation of duties, and authorisation at the appropriate levels.
  
# Cash payments should generally be kept to a minimum, balancing the risks to the chapter against the convenience for individuals. (Administrator)
+
All payments shall be by electronic transfer unless agreed by the CEO
# 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===
+
== Company Cards ==
 +
Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after approval by ARC
  
# A new bank account will be used for payments of under £300.
+
# Provision of a card can be withdrawn by the Board, ARC or by the CEO at any time
# Such payments will require dual authorisation by staff members.
+
# 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 of the card/expenditure.
# The balance in this account will not exceed £4000
+
# If a card user ceases in their role with the chapter, their cards will be cancelled and destroyed
# The account will be maintained with an imprest balance of £4000 to be replenished as determined by the CEO.
+
# All statements will be sent directly to the offices of Wikimedia UK
 +
# All expenses incurred using a card must be authorised by a budget holder
 +
# All card use must be supported by appropriate receipts etc.
 +
# There will be an annual review of card use to ensure proper practice.
  
===17. Compliance===
+
== Cash payments ==
These financial procedures will be subject to compliance monitoring from time to time with a view to reporting to the board any improvement needed.
+
 
 +
# A small cash float up to a maximum determined by ARC may be held in the office safe.
 +
# Transactions from the cash float shall be recorded in the accounting system.
  
 
==See also==
 
==See also==
* [[Expense procedures (proposed)]]
+
 
 +
*[[Expense procedures]]
 +
 
 
==Notes==
 
==Notes==
<references/>
+
<references />
  
 
[[Category:Financial]]
 
[[Category:Financial]]
 
[[Category:Policies]]
 
[[Category:Policies]]

Latest revision as of 17:59, 5 March 2019

This policy was approved by the Board on 9 February 2014. (approved revision, subsequent changes)
Changes to this policy are subject to board approval, and should be proposed either on the talk page or the Engine room

Approval history:

* 9 February 2014 - Update; expense procedures split off to a separate document (approved revision)

Purpose

As a registered charity and company limited by guarantee we are required to maintain accounting records and controls to satisfy the requirements of the Companies Act 2006 and Charities Act 2011.

The trustees of the charity, who are also directors of the company, have a legal duty to safeguard its assets and apply them exclusively to the furtherance of its declared charitable aims and objectives.  

These requirements are expanded by the key principles listed in section 2.

Within this Purpose the Policy may, in exceptional circumstances, be overridden by the Chief Executive Officer (CEO) by prior agreement with the Chair or Treasurer as an emergency decision between Board Meetings. Any such override will be immediately reported by the CEO to the Board.

The CEO is responsible for ensuring that the Policy is adhered to, in conjunction with, and subject to the overall legal responsibility of, the board of trustees.

Key Principles

The key principles underlying this Policy are that:

  1. Legal obligations to keep adequate records to be able to prepare, publish and file statutory accounts are satisfied
  2. Assets are safeguarded from undue loss, and from misuse, damage or fraud
  3. Assets are applied to further our Objects in the most effective and efficient way
  4. Finances and assets are administered in a way that identifies and manages risk
  5. Controls in place are proportionate to the risks
  6. The highest standard of record keeping and financial reporting is maintained
  7. Financial reporting is clearly expressed, comprehensive and transparent
  8. Duties are sufficiently segregated to satisfy the demands of charity governance

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.

  1. We will apply Charity Commission guidance regarding checks on trustees and members of the senior management team prior to appointment.
  2. Where issues are revealed or disclosed, these will be treated sensitively and discreetly, having due regard for the privacy of the individual but ensuring that chapters' assets are not put at undue risk.
  3. Compliance with the Conflict of Interest policy will be monitored at least annually.  

Accounts, accounting records and internal controls

Accounting records and internal controls shall be maintained to allow the timely production of quarterly financial management reports and statutory accounts that satisfy external auditors or independent examiners, and any conditions imposed by any grantor that have been accepted by the Board.

Audit

Accounts shall be prepared annually and audited by registered auditors appointed by the company at the previous Annual General Meeting. Where allowed by charity law the Board may, at its discretion, opt for the statutory accounts to be independently examined instead of audit and references to audited accounts in this policy shall be read to include that option.  The Board shall consider the reasonable requirements of major donors or grantors when exercising this option.

Budgeting

The Board shall agree an annual budget, where possible before the start of the financial year to which it relates to give effect to the operational plan agreed for the year.  Information shall be collected as is necessary to prepare a budget on a direct costs and an absorbed costs basis by the start of each financial year.

The annual budget shall include a projection of income and the reserves position at the end of the forthcoming financial year.  The annual budget and projection of income shall be reviewed by the Audit and Risk Committee (ARC) before presentation to the Board for their agreement.

The agreed annual budget shall be reforecast if in the opinion of the Chief Executive there is a material change that warrants it and in that event the reforecast budget shall be reviewed and approved by ARC and the Board at their next scheduled meetings.

Income and Expenditure

Detailed regulations on the procedures around the acceptance and recording of income and the incurring of expenditure shall be maintained and agreed by ARC. The following principles shall be followed:

Acceptance of non-immaterial donations subject to donor restrictions of any kind shall be subject to Board agreement in accordance with the Donations and Grants Acceptance Policy

All payments from any source must be from budgeted expenditure or otherwise approved in accordance with the Procurement Policy and the Scheme of Delegation.

No commitment to expenditure shall be made without the prior knowledge and agreement of the relevant budget holder.

Creditors shall be paid promptly in accordance with terms agreed.

Banking

  1. All bank accounts will be held in the name of Wikimedia UK
  2. No account will be opened or closed in the name of the charity without Board authorisation (except that an account that is in the view of ARC redundant may be closed and noted at the next Board meeting).
  3. Signatories on all bank accounts and electronic banking powers shall be decided by Board resolution.
  4. Bank payments or other written instructions require at least two signatories except as described in paragraphs 5 to 8.
  5. Electronic banking payments will be set-up online and authorised in accordance with the Scheme of Delegation concerning small or recurring payments.
  6. The Treasurer shall act as the administrator of the electronic banking system.
  7. The CEO will be a main mandate signatory and can be a signatory to current and deposit accounts
  8. No signatory or authoriser may authorise payments to themselves as a sole authoriser.
  9. The credit rating, charges and interest of all banks used shall be reviewed at least annually.
  10. Bank reconciliations are to be prepared monthly for all accounts including credit, debit or any other type of payment card. These shall be reviewed by the Chief Executive, who may delegate this task to the Director of Finance and Operations.
  11. All transactions shall be recorded in accordance with standard accountancy practice using software approved by ARC that allows accounts to be produced readily that comply with the requirements of the Charities Statement of Recommended Practice: SORP(FRS102)
  12. If so specified by a grantor and agreed by the Board income shall be treated as a discrete (restricted) fund and expenditure shall record the fund from which it is made.
  13. Money held with any single financial institution or group should be no more than the current Government guarantee limit unless specifically authorised.
  14. Choice of deposit accounts will take account of credit worthiness, qualification for the government guarantee scheme (ie UK banks only) and interest rates.
  15. Adequate training (in house or otherwise) is to be provided to all involved in online financial transactions.  

Assets

  1. A Register of Fixed Assets shall be maintained listing all assets at or above a value determined from time to time by ARC.  
  2. All physical assets shall be physically verified at least once a year or more frequently where the Chief Executive considers it appropriate.
  3. All assets shall be appropriately safeguarded from loss or damage
  4. Adequate insurance cover shall be maintained to protect against any substantial loss.

Wages and Salaries

  1. Full records of all payroll payments and deductions shall be maintained and returns and payments made to satisfy audit and HM Revenue & Customs regulations.
  2. Payroll may be outsourced to a reputable bureau.
  3. Where payroll services are outsourced the performance of the bureau shall be reviewed annually.
  4. Payroll and HMRC payments shall be made directly by the charity.
  5. Monthly payroll reports are reviewed by the Director of Finance and Operations (DFO) or the Chief Executive.
  6. Statutory returns and payment of deductions shall be made to HMRC by due dates.

Reporting (internally and externally)

  1. A Quarterly Financial Management Report (QFMR) approved by ARC shall be presented at each Board meeting held more than one month after a quarter end (April, July, October, January).
  2. Audited annual accounts shall be filed with the Charity Commission, Companies House, the Wikimedia Foundation and published to members as required.

Authorisation of expenditure

Clear and public authority levels are agreed as set out in the scheme of delegation.

All expenditure from any source shall be pre-authorised by a budget holder.

Payments

Secure procedures will be agreed for any payment working within the bank's system procedures to ensure separation of duties, and authorisation at the appropriate levels.

All payments shall be by electronic transfer unless agreed by the CEO

Company Cards

Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after approval by ARC

  1. Provision of a card can be withdrawn by the Board, ARC or by the CEO at any time
  2. 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 of the card/expenditure.
  3. If a card user ceases in their role with the chapter, their cards will be cancelled and destroyed
  4. All statements will be sent directly to the offices of Wikimedia UK
  5. All expenses incurred using a card must be authorised by a budget holder
  6. All card use must be supported by appropriate receipts etc.
  7. There will be an annual review of card use to ensure proper practice.

Cash payments

  1. A small cash float up to a maximum determined by ARC may be held in the office safe.
  2. Transactions from the cash float shall be recorded in the accounting system.

See also

Notes