Financial Controls Policy

1. Background
Oblong has adopted the following financial controls to be followed by staff and
Board members in managing and monitoring the finances of the organisation.
The controls are designed to meet the guidance published by the charity
commission.
Whilst some powers may be delegated to sub-groups and staff, Trustees have
overall responsibility for financial controls, and where necessary training will be
provided for members not clear about Trustees responsibilities.

 

2. Structure
The Structure of decision-making and tasks is as follows:

2.1. Board of Trustees

• Policy Setting and Review
• Agreeing Core budget and monitoring income and expenditure against
Core budget on a quarterly basis
• Monitoring of income and expenditure against all restricted funds –
presented by Finance worker at board meetings.
• Recommend choice of auditor at the AGM

2.2. Treasurer

• Checking assets and documentation, monitoring accounts against bank
statements, authorising payments, spot checks of records and petty cash.

2.3. Finance worker

• Management of all budgets. Execution of policy with authority to spend
within budget headings, authorise payments ensuring adherence to policy.
• Management of day to day systems, keeping accounts, handling petty
cash, preparing invoices, signing cheques, paying invoices, process
payroll, monitoring of budgets.
• Preparing quarterly reports for Board of Trustees

2.4. Statutory Requirements

• Proper accounts and records to be kept of all transactions.
• Accounts will be checked annually in line with current legislation to comply
with Companies house and the Charity Commission
• Accounts to be formally approved by the Board of Trustees at the Annual
General Meeting (AGM).
• Trustees will be provided with a set of accounts when appointed and
further accounts will be provided before the AGM.

 

3. Appropriate Experience and Qualifications

The Board of Trustees will ensure that there is sufficient expertise amongst Staff
and Trustees, supported wherever necessary by that of the Auditor, to provide
adequate knowledge of financial controls within the organisation.

 

4. Budgets

The Board will adopt overall budgets for Core income and expenditure annually. Project budgets will be set by the development collective during fundraising. The budgets will be set within any restrictions placed by the Funders.

Expenditure against the Core budget will be reported, at the end of each quarter, to the Board of Trustees by the Finance worker. Changes to budgets of Restricted funding will be subject to negotiation with, and agreement of, the Funder.

Oblongs Annual Report and Annual Accounts shall be subject to formal approval by the Board of Trustees before they are submitted to the membership at the AGM.

 

5. Incoming Funds
Oblong will not normally receive income in cash through the post. Cash received
for photocopying, room bookings etc is receipted and accounted for.
The security of cash income to any of the Projects will be the responsibility of
designated members of staff who will place monies/cheque in the safe and the
Finance Worker will account for and bank within 10 working days of its receipt.
Incoming cheques will be recorded by the Finance Worker. Cheques will always
be paid into the bank as soon as possible and certainly within 10 working days.

 

6. Office Security
For safety of incoming mail, petty cash and equipment, all doors will be kept
locked when offices are unattended. The safe will be provided for cheques,
chequebooks and the petty cash tin.
Any cash received will be recorded through the till as income and a receipt given.
In the event that a large sum of cash is received, then two members of staff will
be involved in the banking and recording procedures.
Individuals’ bank accounts will not used to deposit funds.
A numbered invoicing system will be used to record all monies coming into the
Centre, due to or paid out by the Centre. A record will be kept of petty cash
transactions, and withdrawals of petty cash by the Finance worker.

 

7. Checks of Income transactions
The Treasurer will make checks of the incoming cheques records, against bank
statements, and paying-in slips. Checks will be carried out quarterly.

 

8. Bank Details
Oblong will bank with Triodos under the account name of ‘Oblong ltd’.
No other account will be held at any other bank or financial institution unless
approved and minuted by the board of Trustees.
The bank will provide monthly bank statements which will be reconciled with the
computerised Quickbooks accounts. The Treasurer will spot-check that this
reconciliation has been done quarterly.

 

9. Restricted funds
All Restricted funds will be individually tracked and monitored by a class system,
to ensure all expenditure from each fund can be separated out, properly
accounted for and reported to the Funder.
The Auditor will be asked to identify all Restricted funds within the accounts.

 

10. Cheque Signing
No fewer than two approved signatories must sign all cheques. Current
signatories are
• Sue Johnson Trustee
• John Ward Trustee
• Chris Lightfoot Finance Worker
• Duncan Millard Development Worker (Volunteering)
• Mark Southwell Development Worker
Two staff members may not both sign cheques above a level to be approved
annually by the Board of Trustees. A limit of £1000 is agreed in first instance.
Copies of supporting documentation will be provided to signatories whenever
they are asked to sign cheques. In the case of cheques for petty cash the
person cashing the cheque will not sign to ensure at least three independent
people are involved in releasing the cash. Where two staff members (other than
the person receiving the cash) are not available, a Board member will be asked
to either sign the cheque (where practical) or authorise the person receiving the
cheque to sign it.

 

Furthermore;
• No signatory will sign a Cheque or authorise bacs payable to either
themselves or to a close relative or partner.
• Cheque stubs will be completed at the time of writing cheques
• Cheque no. and date will be written on invoices
• Blank cheques will not be signed under any circumstances.

 

11. BACS authorising
BACS payments will be set up and authorised by the Finance Worker and dual
authorised by another signatory unless it is payment to them personally or a
close relative or partner. Payments over £1000 will need to be authorised by a
Trustee signatory.

 

12. Controls over purchases
A System will be devised to monitor orders made by the Centre. This will include
the numbering of orders and allocating responsibility for checking the goods
received.
Payments should only be made against original invoices; these invoices will be
filed in the accounts to be audited.
Records of payments will be cross referenced with cheque number, and class
number.
Capital purchases will require three written quotes for items above £1500.

 

13. Salaries
Personnel records will be kept separate from salary records.
The BACS instruction signed for payment of salaries administered by Voluntary
Action Leeds Payroll Service will be accompanied by a list of employees for
which payment is made, to ensure there are no fictitious employees.
The Treasurer will inspect salary lists and payment files quarterly.

 

14. Expenses
The Expenses and benefits policy will detail the correct procedure in relation to
organisational expenditure

 

15. Fixed Assets
Records will be maintained of fixed assets. Capital purchases will be posted
against a Fixed Asset account. The value of Fixed Assets will be depreciated
under advice from the auditor for all items over £1,500. Assets will be reviewed
annually.
Insurance will be arranged for fixed assets where practical.

 

16. Risk Assessment
An annual financial health check will be conducted to examine liabilities in
relation to
• Property and leases
• Staff and redundancy costs
• Contract relationships
• Insurable risks (Public liability, employer’s liability property contents,
buildings and Directors liability)
• Fraud
Oblongs reserves policy will also be monitored annually to ensure the best return
on investment is being achieved. Please see separate Reserves policy.

 

Ratified 5/5/2010 by Trustees