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1 Financial records
Community Base will keep proper financial records of its activities in order to
a enable the board of trustees to have proper control over financial matters
b enable Community Base to meet its contractual obligations with others
c ensure that accurate information about the finances of Community Base can be given to the membership of Community Base and others legitimately entitled to such information
d ensure that Community Base meets all its legal requirements.
These financial records will be held by the director and will comprise at least: accounts held on computer and backed up; a cheque book and bank paying in book; a book of monthly bank statements; books for each financial year of invoices paid against; all cheque book stubs and bank paying in book stubs; correspondence relating to grants and loans received; petty cash records; audited accounts for each financial year.
2 Setting budgets
Once a year the board of trustees will agree revenue and capital budgets along with an assessment of risks to development for the next five years. The board will consider future rent levels, the needs for reserves and other relevant factors when setting these budgets.
3 Auditing of accounts
The financial year will end on 31st March. Accounts will be drawn up and audited at the end of each financial year. Audited accounts for the year will be presented to a meeting of the board of trustees within six months of the end of the financial year and to the first annual general meeting after the board meeting to which they are presented. The annual general meeting will appoint an appropriately qualified auditor to audit the accounts for presentation to the next annual general meeting.
4 Banking
a Community Base will normally have only two bank accounts, a currrent account for normal transactions and a deposit account for depositing reserves. These bank accounts will be with CAF BANK and be in the name of Community Base.
b The chair, treasurer and secretary will be approved to sign cheques and bank mandates on behalf of Community Base. The board will approve other trustees as signatories as it sees fit. Cheques and requests for standing orders, direct debits and other withdrawals from the account must be signed by two such approved signatories. Cheques will only be signed when completed with the date, payee's name and amount payable. Cash cards will not be used for withdrawing money from a bank account and any such cards issued by the bank will be destroyed.
c Community Base will require the bank to provide it with monthly statements for its current account and its deposit account. Bank statements will be reconciled with our accounts every month. The treasurer will ensure that this reconciliation has been done and that there are no discrepancies.
d On the basis of these reconciliations, every two months the director will present the board of trustees with a balance sheet and a comparison between actual income and expenditure made in the period from the beginning of the financial year to the month before the board meeting and that budgeted for that period in the cashflow projection.
5 Income
a All income will be used to pursue the charitable aims of Community Base. Funds received with restrictions on their use will only be used for the purposes given. Community Base will not borrow money without the authority of the board of trustees.
b Invoices will be issued for all income due from the activities of Community Base. Invoices for rent and services will be issued quarterly to participant groups. Invoices for room hire and services provided to outside groups will be issued as seen fit by the director.
c All monies received by cheque, BACS, standing order or otherwise will be recorded in the accounts as soon as possible and at the latest when the bank statement is reconciled. A record of all invoices issued and payments made to Community Base will be held on computer and backed up.
d The director will be responsible for credit control. Any invoice outstanding for more than two months will be reported to the treasurer and appropriate action taken.
e Cheques will be paid into our current account at the HSBC Bank, using the bank paying in book, on a regular basis and at most within two weeks of receipt.
6 Expenditure
a Expenditure will only be made in pursuit of the charitable aims of Community Base. Community Base will not invest or speculate without the authority of the board of trustees.
b At least two quotations will be sought for any contracts where the value excluding VAT and professional fees is likely to exceed £5,000 and at least three quotations will be sought for any contract where the value excluding VAT and professional fees is likely to exceed £10,000. All contracts for the supply of goods and services to Community Base with a value excluding VAT and professional fees that is likely to exceed £50,000 (per year if the contract is recurring) or in the case of a building contract requiring the supervision of a surveyor or architect £25,000 excluding VAT and professional fees, are covered by the policy on major contracts.
c All expenditure must be properly authorised and recorded. The budget as approved by the board of trustees or a decision by the board of trustees provides proper authority for expenditure. If it is necessary for the good management of Community Base, payments may be made outside this budget if approved by the chair or treasurer, such payments being reported to the next meeting of the board of trustees.
d All payments (other than petty cash payments, direct debits, standing orders, credit card payments or direct bank payments) must be made by cheque against an original invoice or similar document (not against a supplier's statement). Payments to the Inland Revenue and payments of wages will be made by an instruction sent electronically to CAF BANK. Payments made using credit card must be authorised by two approved signatories and credit card debts must be paid each month from our current account.
e When payment is made against an invoice, the invoice will be stamped ‘paid', the number and date of the cheque paying against the invoice will be written on the invoice and the invoice will be signed by an approved cheque signatory. The original invoice will be filed and kept for at least seven years. A record of all payments made by Community Base will be held on computer and backed up.
7 Staff
Payment of staff salaries will be at rates and for dates authorised by the board of trustees. The confidentiality of staff's financial circumstances will be respected at all times.
8 Petty cash
Petty cash will be maintained on an imprest system at an amount set by the board of trustees. The director will be responsible for keeping this float in a safe place. When petty cash payments are made a petty cash voucher should be signed by a member of staff and whenever possible an invoice attached. When the petty cash float is more or less expended, a summary of petty cash expenditure made will be attached to petty cash vouchers for the expenditure and this documentation will be treated as an invoice for the purposes of payment.
9 Confidentiality
Community Base trustees and staff will at all times act in the best interest of Community Base. While recognising the need for openness and transparency with regard to Community Base's finances, trustees and staff agree not to divulge sensitive financial information to others when it is against the interest of Community Base to do so.
10 Review of policy
This policy will be reviewed by the board of trustees at least every calendar year.
