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Financial Controls

Background

1. Internal financial controls are in place to assist the Board of Trustees to:

(a ) Meet their statutory and regulatory responsibilities to safeguard the Charity’s assets;

(b) Administer the Charity’s finances and assets in a way that identifies and manages risk;

(c) Ensure the quality of financial reporting, by keeping adequate accounting records and preparing timely and relevant financial information and reports;

(d) Meet the Charity Commissions Statement of Recommended Practice (SORP 2015) to meet accounting and reporting standards.

2. The QARANC Association must ensure that assets are properly used, its funds are spent effectively and its financial affairs are properly managed in keeping with its charitable objects and public benefit.

3. Internal financial controls are to be in place to reduce risks.

Financial Records

4. Financial records will be kept in accordance with SORP 2015 and HM Revenue and Customs requirements.

5. The Financial year will begin on 1 July and end on 30 June.

6. Accounts will be prepared for Audit within 8 weeks following the end of the financial year. Audited accounts will be presented for endorsement by the Board of Trustees at the Annual General Meeting.

7. The Board of Trustees will appoint an auditor to audit accounts annually at a General Meeting.

8. The Board of Trustees should meet their responsibility to file the Trustees Annual Report, Accounts, and Annual Return with the Charities Commission on time and to make the report available to the public when requested for which a fee may be charged

Budgets and Financial Reporting

9. Prior to the start of each financial year, the Trustees will approve an annual budget of income and expenditure.

10. Quarterly management accounts will be presented to Trustees. The Trustees may from time to time request additional financial reports.

Bank Accounts

11. The General Secretary and Treasurer hold details of all bank accounts (including branch accounts) as approved by the Board of Trustees.

12. The opening and closing of accounts will be authorised through a resolution at a Board of Trustees Meeting unless exceptional circumstances dictate otherwise. In the event of this emergency the action will be authorised by the President, Vice President and Chairman.

13. Delegation of financial authority and signatories will be reviewed annually or on change of post holders and recorded in the minutes of a Board of Trustee Meeting. The bank Mandate should be amended accordingly.

14. Reconciliation of current accounts is to be undertaken weekly. Reconciliation of deposit accounts is to be undertaken monthly.

Income

15. Investment Dividend income is received quarterly.

16. Officers and Soldiers are invited to pay one day’s pay to the Associationwhich is Gift Aided at source through Payroll Giving.

17. Reservist and retired members of the QARANC are invited to pay annually normally by Direct Debit.

18. Receipt of legacies and all other income is to be managed by the General Secretary and Treasurer in accordance with appropriate accountancy record keeping practice.

19. All monies received are to be banked without delay, normally within 5 days of receipt.

20. The General Secretary and Treasurer are to inform the Trustees at every Board meeting on Debtors and report action taken to manage outstanding monies owed.

Donations & Gift Aid Claims

21. Donors are invited to complete a Gift Aid form if they are a UK tax-payer or eligible for Gift aid Relief. These forms are retained by the General Secretary and the Treasurer will ensure the relevant accountancy policies and practices are met.

Expenditure

22. All Expenditure made must be in accordance with the budget and agreed Schedules of Financial Delegation.

23. All budgeted expenditure must be approved by a minimum of two Trustees.

24. Any unbudgeted expenditure must be approved by a simple majority vote of the Board of Trustees.

25. The General Secretary may make an immediate cash grant to a beneficiary at an amount agreed and minuted annually.

26. When expenditure exceeds budget allocation in excess of 5%, this must be reported to and agreed by the Board of Trustees.

27. The Treasurer maintains the accounting records to standards set by SORP 2015 and the agreed schedules of financial delegation.

Cheques

28. The Treasurer will be responsible for holding the cheques (unused) which must be kept securely.

29. The relevant payee’s name will always be inserted on the cheque before signature and the cheque receipt will always be properly completed. These details are entered onto the Accounts System automatically on production of printed cheques. Blank cheques will never be signed.

(a) A cheque must not be signed by the person to whom it is payable.

(b) Each cheque should be signed in accordance with the Schedule of Financial Delegation.

30. The only exceptions to cheques not being supported by appropriate documentation would be for such items as advanced deposits for goods, etc. Here a cheque requisition form will be used and the cheque receipt kept.

Credit and Debit Cards

31. The only Debit Card is that allocated to the Heritage Account. The Heritage Account holding will be fixed annually by the Board of Trustees.

32. Credit cards issued will have a limit on expenditure agreed annually.

33. Credit and Debit cards will not be used to withdraw cash.

34. Credit and Debit cards issued to the Association, including those held in the name of any Trustee, will only be used for those activities that are a direct consequence of the cardholders’ function within the organisation. Any abuse may result in disciplinary or administrative action.

35. All Credit and Debit card transactions are to be supported by a payment voucher and/or invoice, which is to be passed to the Treasurer and recorded in the accounting records.

36. The Credit and Debit Card Policy will be communicated to the Cardholder when or before the card is issued and signed by the card holder annually in agreement to the Credit Card policy.

37. Credit and Debit Cards may be cancelled at any time and when the holder ceases to work for the Association.

BACS, Direct Payments & Internet Banking

38. Only the Heritage Account has a facility for Internet Banking, other than read only access or BACS payments.

39. Direct Debits and Standing Orders will be managed in accordance with the schedules of financial delegation. These payments are normally administered by the Treasurer or General Secretary.

Cash Payments

40. Cash payments are only made in exceptional circumstances. There is no Petty Cash float.

Expenses and allowances

41. The Association will pay expenses for legitimate expenditure properly incurred on its behalf.

42. Trustees and members can be reimbursed directly for expenditure incurred for goods and services paid for on behalf of the Association. However, this is not encouraged, and where possible invoices and expenditure will be paid for directly by the Association.

43. The Association may authorise some payments for travel, hotels, conferences, training and out of pocket expenses in relation to carrying out an activity to meet it objects.

44. As a guide for the reimbursement of expenditure paid for personally by Trustees or Volunteers, they must provide:

(a) Authority for travel (i.e. invitation or Admin Instruction)

(b) Travel fares evidenced by tickets or receipts.

(c) Original receipts

(d) Car mileage based on Google Maps calculation.

45. Mileage claims will be paid at the current allowance as agreed by the Board of Trustees and no more than the HMRC approved rates so that payments do not create a tax or NI liability for the individual or the Association. The allowance will be agreed annually.

46. The general rule for travel costs is that the Association will only pay for economy class tickets.

47. The expense claim should include a self-declaration that the claim is accurate and incurred on the business of the Association.

48. A minimum of one Trustee and the General Secretary must approve an expenses claim.

49. No Trustee or cheque signatory may approve their own expenses, or make a payment of expenses to themselves.

Loans

50. The Association does not offer loans and therefore has no Loans policy.

51. Borrowing will only be considered for the working purposes of the Association in furthering its Objects.

Fixed Assets and Chattels

52. The Board of Trustees has a duty to safeguard the assets of the Association from loss or damage and to ensure their proper use.

53. Only assets in excess of £100 will be capitalised. The Fixed Asset Register will include details of the date of purchase or donation, the cost (when known), and an identifiable description of the asset. The Fixed Assets register is reviewed annually to make sure they exist, remain in good repair and are being put to appropriate use.

54. The Chattels Register is maintained by the Heritage & Chattels Sub-committee. The Register will include details of the date of purchase or donation, the value of the item, a detail identifiable description the asset should be labelled and the current location recorded.

55. All Chattels disposed of or written off are recorded in the Disposals Register, kept by the General Secretary.

56. The Chattels will be re-valued every 5 years.

57. Insurance cover for fixed assets & Chattels including public liability cover is reviewed annually.

Reserves Policy and Capital Commitments

58. The Trustees will ensure that they have a Reserves Policy in place at all times.

59. Where the Association is planning on taking on any new capital commitment (of greater than £50k) this will be reviewed specifically against the existing Reserves. If required a drawdown from the COIF account or Investments may be undertaken.

60. Should a drawdown of Investments be required, the Association will make reasonable checks to ensure that the withdrawal leaves sufficient funds available against its Reserves Policy.

61. The level of reserves will be reported and reviewed as part of the quarterly Management Accounts.

62. The Board of Trustees will ensure that the Reserves Policy is reported in the Trustees Annual Report as required by Charity Law.

Restricted Funds

63. The nature and any restrictions relating to restricted funds are recorded both in the minutes, and separately in the accounts.

Schedule of Delegated Financial Authority

64. The Charity banks with Holt’s Royal Bank of Scotland plc at its Farnborough Branch. The sort code is 16-19-26

65. The following accounts are maintained:

(a) Central Fund Current Account – 14564241

(b) Central Fund Deposit Account – 10112478

(c) Benevolent Fund Current Account – 14564063

(d) Benevolent Fund Deposit Account – 10112486

(e) QARANC Heritage Account – 19967441

66. The Budget will be approved by the Board of Trustees at the beginning of the financial year. Changes, as agreed by the Trustees may be made in year.

67. Delegation of financial authority and signatories will be reviewed annually and on change of post holders and recorded in the minutes of a Board of Trustees meeting.

68. The Budget provides the authority for expenditure. All agreed budgeted expenditure requires the approval of a minimum of two trustees. Any unbudgeted expenditure or extraneous payments must be approved by a simple majority vote by the Board of Trustees. This vote may be undertaken at a Board Meeting, in writing or electronically. However all requests for grants and benevolence must be approved on a case by case basis at a Board Meeting or in writing, including electronic communication, by a simple majority of the Board of Trustees. The General Secretary may make an immediate cash grant to a beneficiary (at an amount to be agreed and minuted annually) currently up to two hundred pounds (£200.00). Any such grants must be informed to the Board of Trustees within 5 working days and minuted at the next Board of Trustees Meeting. Any expenditure cannot be approved by the person to whom it relates.

69. When expenditure exceed budget allocation in excess of 5%, this should be reported to the Board of Trustees.

70. Payment may be made by cheque, debit or credit card following approval for the expenditure.

71. The authorised signatories for cheques will be:

(a) The President

(b) The Chairman

(c) The General Secretary

(d) The Treasurer

72. A single signature is required for cheques up to one thousand pounds (£1000.00). Cheques in excess of one thousand pounds will require two signatories. A signatory cannot sign a cheque for their own claim.

73. The Association Credit Card has a limit. Authorised purchases cannot exceed £1000.00.

74. The Motor Mileage Rate is agreed annually by the Board of Trustees. The rate is currently thirty pence (30p) per mile.

Financial Reserves Policy

75. This policy relates to all funds, including the Benevolence Fund and includes Current and Deposit accounts. The QARANC Association Fund holds no Restricted or Endowment Funds

76. The QARANC Association Fund aims to hold reserves amounting to approximately 9 months of its average annual expenditure and operating costs.

77. The Board of Trustees have agreed that in order to meet the aims and objectives and a possible increase in grants, a holding of a slightly higher Reserve of £200,000 is recommended.

78. The current balance on Current and Deposit accounts are sufficient to cover the Reserve.

Financial Investment Policy

79. The general objective is to produce the highest level of income that is sustainable whilst at the same time preserving, and where possible, increasing the worth of the Association funds.

80. The Board of Trustees have wide powers of investment but have determined to invest via the Armed Forces Common Investment Fund (AFCIF) in order to achieve the best possible total return.

81. The mix of the portfolio will be kept under periodic review by the Board ofTrustees and the Advisory Board to the AFCIF. Quarterly reports will be presented to the Trustees for discussion at each Board Meeting and reviewed by the Board of Trustees annually.

82. Following the year end of the accounts on 30 June annually and agreement of budget and any special projects, the Board of Trustees should determine whether sufficient funds are available or if investments need to be drawn down to meet the proposed expenditure, if this is the case the Board of Trustees will seek advice on possible options.

83. Income from Investments will be credited to an income account with a recognised bank.

84. Should the Board of Trustees decide that a surplus has accrued then that surplus may be reinvested.

Wills

85. The QARANC do not provide a free or discounted Wills service for QARANC Association Members, or anyone else seeking assistance with will making.

Legacies

86. The Board of Trustees, will on occasions provide details of the charity by virtue of a flyer inserted into the QARANC Gazette, by way of making members aware of the charitable status and details they may require in order to leave a legacy to the QARANC Association.

87. The association will not solicit any individuals, they will only provide the necessary information that a Solicitor might ask for. All legacies will be acknowledged by letter or form, as required by the solicitor dealing with the estate on behalf of the benefactor.

88. Any legacy left to the QARANC association will be used exclusively for the purpose of benevolence unless stated to the contrary.


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(Version 2018.1 updated February 2018)