Garrigill Village Hall Internal Financial Controls and Reserves Policy

1. Purpose

The purpose of this policy is to provide guidance to the GVH Trustees ("the Trustees") whose management Committee ("the Committee") supervises and is responsible for the management and protection of Garrigill Village Hall's funds and to ensure that there are adequate internal financial controls over the charity's assets and their use.

2. Committee's responsibilities

The Committee must:

  • review these internal financial controls annually;

  • manage the assets of the charity in accordance with the Charity Commission Scheme for Garrigill Village Hall dated 23 June 2008;

  • appoint one of its number as GVH Treasurer ("the Treasurer") and ensure that the charity keeps proper books and records;

  • present at an annual general meeting an annual report and accounts for the last financial year;

  • appoint an appropriately qualified auditor/ independent examiner to audit the accounts whenever GVH's gross annual income exceeds £25,000 and otherwise where the Trustees deem appropriate;

  • ensure all buildings and other property of the charity are kept in repair and

sufficiently insured against fire, theft, public liability and other insurable risks. A fixed asset register must be kept for any items of significant value.

3. Use of income and capital

(1) The Committee must firstly apply:

(a) the charity's income; and

(b) if the Committee think fit, expendable endowment; and

(c) when the expenditure can properly be charged to it, its permanent endowment

in meeting the proper costs of administering the charity and of managing its assets.

(2) After payment of these costs, the Committee must apply the remaining income in furthering the object of the charity.

(3) The Committee may also apply for the object of the charity:

(a) expendable endowment; and

(b) permanent endowment, but only on such terms for the replacement of the amount spent as the Charity Commission may approve by order in advance.

4. Trustees to have no personal interest

(1) Subject to sub-clause (2) of this clause and except with the prior written approval of the Charity Commission no member may:

(a) receive any benefit in money or in kind from the charity; or

(b) have a financial interest in the supply of goods or services to the

charity; or

(c) acquire or hold any interest in property of the charity (except in order to hold it as a trustee of the charity).

(2) All Trustees may use the village hall as inhabitants of the area of benefit in accordance with the object of the charity.

5. Trustee liabilities

If funds are lost through Trustees neglecting their duty of care they may be held jointly and severally liable to make good the amount. However, if reasonable controls are in place and have been adhered to, then Trustees are unlikely to find themselves in such position.

6. Secretary's responsibilities

The GVH Secretary must ensure that:

  • all Trustees receive a copy of this policy document. Trustees with any queries as to its meaning and effect should raise these with the Treasurer;

  • all new Trustees are given copies of this policy document and of the charity's latest report and statement of accounts, the Trustees' Role publication and GVH's Constitution;

  • the Charity Commission receives on time (i.e. before 31st January) either:

(a) an annual return (where gross annual income does not exceed £25,000); or

(b) an annual report and accounts (where gross annual income exceeds £25,000);

7. Financial Records, Accounts and Reports

The Treasurer must:

  • at all times properly and promptly maintain appropriate and accurate accounting records of all transactions and which comply with all relevant legal requirements;

  • carry out regular reconciliations between bank statements and (a) accounting records and (b) credit/debit card receipts;

  • at the start of each financial year, prepare and present to the Committee for its approval a budgeted income and expenditure account for that year;

  • at each ordinary meeting of the Committee present an itemised report in an agreed format comparing actual income and expenditure with the budget;

  • at the end of each financial year draw up annual accounts for circulation among all Trustees for approval and presentation at the Annual General Meeting in May of each year or as soon as possible thereafter.

8. Banking

(1)Unless or until the Committee decides otherwise, the charity will at all times bank with the Co-operative Bank ("the Bank") at Business Direct, PO Box 250, Skelmersdale, WN8 6WT and will maintain in the name of Garrigill Village Hall a current account, an instant access interest-bearing savings account and where the Trustees consider appropriate a higher-yielding yearly fixed interest account;

(2) The Committee will:

  • review annually the Bank's costs, benefits and interest rates;

  • unless it agrees otherwise, not use the Bank's overdraft and loan facilities nor open accounts with any other bank or financial institution;

  • request the Bank to separately supply the Treasurer and the Chair of the Committee with a monthly current account statement and regular savings account statements;

  • ensure the bank mandate requires at least two signatories;

  • nominate the Treasurer and, should it so decide, one other Trustee to access the Bank's electronic banking system who shall ensure that all their electronic devices used for electronic banking are kept secure with up-to-date security technology

(3) The Treasurer must be vigilant of the risk to GVH of financial crime and abuse and be aware of the typical examples of potentially fraudulent activities. Any Trustee becoming aware of or suspecting any financial irregularity must immediately notify any two of the charity's three officers (Chair, Secretary and Treasurer) who shall forthwith mount an investigation and report the matter to the Committee and, if deemed necessary, to the Charity Commission and to any other relevant body.

9. Income and Expenditure

(1) The Treasurer must ensure:

  • cash and cheques are banked promptly;

  • all cash payments are entered in a petty cash book:

  • he/she obtains the Committee's prior approval of all proposed expenditure over £100 save for normal recurring charges for utilities and third party goods and services;

  • that all expenditure whether by card, cheque or otherwise is supported by receipts or invoices and recorded in the accounting records;

  • all cheques are signed by two Trustees after insertion of the payee's name and completion of the cheque stub;

  • direct debits, standing orders and other transfers are checked regularly;

  • that standing orders and direct debits are cancelled where required;

  • that cards are cancelled and destroyed where necessary, such as when cards are lost;

  • all cheque books and the Square card reader are stored securely

  • compliance with the Payment Card Industry standards

(2) Any Trustee (other than the Treasurer) authorised by the Committee to use the charity's bank card must obtain the prior approval of the Treasurer for each proposed payment up to £100 and of the Committee for payments over £100 and provide the Treasurer with a receipt in either case;

(3) Cash from village hall events is to be counted by the person collecting it and placed in a bag with a signed note showing source, date and amount and handed to the Treasurer forthwith. It is not the charity's policy to make cash payments save to hired bar staff whom the supervising Trustee or nominee may pay in cash from the event's bar receipts or cash float. The Trustee or nominee must record on the bagged collection note any cash sum paid to bar staff;

(4) The Committee should ensure that the charity has in place policies and controls for access to and storage of data which complies with the Data Protection Act and that its online systems are appropriately protected.

10. Reserves Policy

The Committee will aim to hold sufficient reserves to cover the Hall's normal running costs for 6 months. The reserves will be designated as 'Restricted Funds' and held within one of the Bank's interest bearing accounts which facilitate instant access. Any drawdown of funds from the financial reserve shall require the prior approval of the Committee. The Treasurer will review the level of reserve for appropriateness on an annual basis and propose any necessary changes to the Committee.

11. Fundraising and Grants

All fundraising and grant applications undertaken on behalf of the charity will be done in the name of Garrigill Village Hall with the prior approval of the Committee. Copies of grant applications will be kept and made available to Trustees on request. Any grant acceptance documentation exceeding £5,000 will be brought to the Committee's attention for approval.