Little People UK
Financial Control Policy
- Financial records will be kept so that Little People UK (LPUK) can:
- Meet its legal and other obligations, e.g. Charities Act 1992, Inland Revenue, Customs & Excise and common law.
- Enable the members to be in proper financial control of LPUK.
- Enable LPUK to meet the contractual obligations and requirements of funders.
- LPUK will keep proper records of accounts, which will include:
- A cashbook analysing all transactions in LPUK’s bank account(s)
- A petty cash book if cash payments are being made.
- Inland Revenue deductions cards P11 and schedule D numbers for freelance workers.
- The financial year will end on the 31st May each year.
- Accounts will be drawn up after each financial year within three months of the end of year and presented to the next Annual General Meeting (AGM).
- Prior to the start of each financial year, the committee members will approve a budgeted income and expenditure account for the following year.
- A report comparing actual income and expenditure with the budget will be presented to the committee every three months, at least.
- The AGM will appoint an appropriate qualified auditor/examiner to audit/examine the accounts for presentation to the next AGM.
- LPUK will bank with Co-op Bank - current account and Nationwide - saver account.
- Accounts will be held in the name of Little People UK.
- The following account will be maintained: Little People UK Account No. 65849714
- The mandate (List of people who can sign cheques on the organisations behalf) will be approved and minuted by the committee as will all changes to it.
- LPUK will require the bank to provide statements every month and these will be reconciled with the cash book at least every three months. The Treasurer will spot check that this reconciliation has been done at least twice a year, signing the cash book accordingly.
- LPUK will not use any other bank or financial institution or use overdraft facilities or loan without the agreement of the committee.
- All monies received will be recorded promptly in the cash analysis book and banked without delay (Note: this includes sundry receipts such as payment for Taxis, Photocopying etc). LPUK will maintain files of documentation to back this up.
4. Payments (Expenditure)
- The aim is to ensure that all expenditure is on the charities business and is properly authorised and that this can be demonstrated. The latest approved budget provides the cheque signatories with authority to spend up to the budgeted expenditure, not beyond it.
- The Treasure will be responsible for holding the cheque book (unused & partly used cheque books) which should be kept under lock and key.
- Blank cheques will NEVER be signed.
- The relevant payee’s name will always be inserted on the cheque before signature and the cheque stub will always be properly completed.
- No cheques should be signed without original documentation (See below)
- Online payments can be made by the Treasurer or Charity Administrator but must be verified by the other, and permission sought in advance, from the Chairperson, Vice Person, Treasurer and where necessary the whole committee.
5. Payment Documentation
- Every payment out of LPUK’s bank account will be evidenced by an original invoice (never against a supplier’s statement or final demand). That original invoice will be retained by LPUK and filed. The cheque signatory should ensure that it is referenced with:
- Cheque Number
- Date cheque drawn
- Amount of cheque
- Who signed the cheque?
- The only exceptions to cheques not being supported by an original invoice would be for such items as advanced booking fees for a future event, deposit for a venue, VAT, etc. Here a cheque requisition form will be used and a photocopy of the cheque kept.
- Wages & salaries - There will be a clear trail to show the authority and reason for EVERY such payment; e.g. a cheque requisition, asking for payment to an employee, the Inland Revenue, etc. All employees will be paid within the PAYE, National Insurance regulations.
- All staff appointments/departures will be authorised by the committee, minuting the dates and salary level. Similarly, all changes in hours and variable payments such as overtime, etc, will be authorised by the committee.
- Petty cash will always be maintained whereby an administration worker is entrusted with a float as agreed by the committee. When that is more or less expended, a cheque will be drawn from the sufficient funds to bring up the float to the agreed sum, the cheque being supported by a complete set of expenditure receipts, totalling the required amount, analysing as required.
- Expenses/allowances - LPUK will, if asked, reimburse expenditure paid for personally by staff/members, providing:
- Fares are evidenced by tickets
- Other expenditure is evidence by original receipts
- Car mileage is based on local authority scales
- No cheque signatory signs for the payment of expenses to themselves
6. Cheque signatures and cash cards
- Each cheque will be signed by at least two people
- A cheque must not be signed by the person to whom it is payable.
- Hole in the wall type cash cards will only be accessible to the Treasurer and LPUK Charity Administrator, with their use be approved in advance.
- Expired cash cards will be cut in half and destroyed, with this being recorded.
7. Other Undertakings
- LPUK does not accept liability for any financial commitment unless properly authorised. Any orders placed or undertakings given, the financial consequences of which are, prima facie, likely to exceed in total £5,000, must be authorised and minuted by the committee. In exceptional circumstances such undertakings can be made with the Chairperson’s approval, who, will then provide full details to the next meeting of the trustees. (This covers such items as new service contracts, office equipment, purchase and hire).
- All fundraising and grant applications undertaken on behalf of the organisation will be done in the name of LPUK with the prior approval of the committee or in urgent situations the approval of the Chairperson who will provide full details to the next committee meeting.
8. Other Rules
- LPUK will adhere to good practice in relation to its finances at all times, e.g. when relevant it will set up and maintain a fixed asset register stating the date of purchase, cost, serial numbers and normal location. Additionally LPUK will maintain a property record of items of significant value, with an appropriate record of there use.
This policy was adopted:
Date: August 2018 Next Review Date: August 2019
Signed: S.Davis (Chairperson) On behalf of Little People UK Committee