Financial Management and Controls

From Freegle Wiki

This document was adopted following a national poll, Central message 18606 [1], 5th January 2011. It was subsequently amended February 2012 (see Financial Management and Controls reviews ) and this version below is the current document.

Definitions: Freegle Volunteers - voting members of Freegle
Rep(s) - Member(s) of the Freegle Representative Group
Central - Freegle UK Central Yahoo group
Reps group - Yahoo group used exclusively for Reps business
Reps email account - Reps@ilovefreegle.org
6/9 of Reps - 6 of 9, 6 of 8, 5 of 7 or 4 of 6 eligible voting Reps. If there are fewer than 6 eligible voting Reps available, voting will be deferred until new Reps are appointed.

Introduction

Freegle needs a bank account to handle simple transactions like collecting donations and paying for or reimbursing expenditure such as banners. If we decide to pursue significant amounts of funding at a national level, or decide to become a registered charity, we will need more complex controls, accounting and reporting; but for now we propose the following Financial Management and Controls Policy and Procedures.

Policy

1. The financial year for Freegle runs from 6th April to 5th April.

2. At the end of each year, the final accounts will be prepared and presented to the Auditor. The audited accounts and a short financial report will be posted on Central by the end of May, giving an opportunity for any questions to be raised and answered. There will be a poll of Freegle Volunteers to accept the accounts and appoint an Auditor for the following year.

3. An Auditor will be sought from suitably qualified candidates both from within and outside of Freegle excluding serving Reps, who will not be eligible for nomination. The Auditor will be chosen by the elected officials of Freegle (excluding Reps) and recommended to Freegle Volunteers.

4. Financial records will be kept so that Freegle can:

- Meet any legal and other obligations.

- Enable the Reps to oversee the organisation’s finances on behalf of the Freegle Volunteers.

- Meet contractual obligations and the requirements of any funding bodies.

- Provide auditable records to ensure accountability and security for individuals and the organisation.

5. The Reps are responsible for ensuring that any expenditure is in the best interests of Freegle, taking account of ethical, recycling, reuse and environmental implications where practicable.

6. Expenditure must not be committed without prior authorisation by the Reps. No contracts, hire purchase agreements or leases will be entered into in the name of Freegle without the Reps approval, in an email from the Reps email account. Freegle does not accept liability for any financial commitment unless properly authorised. Should a situation occur where an order is placed or undertaken or given with unauthorised financial consequences, the Reps will decide a course of action and will record their decision about the matter on Central.

7. One bank account will be used for Freegle’s central funds and can only be opened with the authority of The Freegle Representative Group, and will be held in the name of Freegle.

8. Freegle will not use any other bank or financial institution or invest speculatively or apply for or use overdraft facilities or credit card or other payments cards. Any changes to this clause will only be proposed if Freegle adopts limited liability.

9. Any fund raising and grant applications undertaken on behalf of Freegle nationally can only be carried out in the name of the organisation with prior approval of the Reps. Approval must be in an email from the Reps email account.

10. This policy, and the associated procedures, will be reviewed annually by the Reps and any proposed changes will be posted on Central for comments and agreement.

Procedures

1. Financial Management

1.1 For financial purposes only, a Chairman, Treasurer and two other Signatories will be appointed from within the Reps. These role holders will be signatories on a bank account. The other Reps will be responsible for authorising expenditure, and hold the signatories to account.

1.2 Freegle will keep proper accounts, which will include bank and petty cash control accounts, which will be updated regularly.

1.3 The accounts will be kept electronically on a spreadsheet, which will be viewable by anyone with the link available in the links section on Central and the Freegle Wiki.

1.4 Annual accounts will be prepared, audited and published on Central in line with the policy.

2. Bank

2.1 The bank mandate (list of people who can sign cheques on the organisation's behalf) will be approved and recorded by the Reps as well as all changes to it. This will be by a copy of the mandate in PDF form on the Reps group, and a list of the authorised signatories in the files on Central. Any new signatory must be approved by the Reps before the bank is notified. All cheques will require two signatures.

2.2 Electronic payments may be used. The accounts will record which signatories have authorised each payment.

2.3 The Freegle bank account will be reconciled to the accounts weekly, and a PDF copy of the bank statement and the reconciliation will be open to view by all members of Central.

3. Receipts

3.1 All receipts will be recorded and banked not less than once each week. The make up of each banking deposit transaction will be clearly recorded in the accounting records.

3.2 All relevant information relating to receipts must be passed to the Treasurer with the cheque and/or remittance advice. Lack of documentation will lead to such items being banked, but unavailable for expenditure commitments, until the validity of the receipt is established.

3.3 Payments due against specific income receipts will not be made until those receipts have been cleared.

4. Payments

4.1 All payments will require the pre-approval of at least 6/9 of the Reps.

4.2 The Treasurer will be responsible for holding unused and partly used cheque books which should be kept securely, as should cheques that have been written out but not yet sent for signature.

4.3 Payments can be made either direct to the supplier of the goods or services, or to reimburse expenditure by individual Volunteers.

4.4 All requests for payment must be made on a Payment Request Form (“PRF”) which must include the details of the expenditure, the date of the Reps’ email authorising the expenditure, the amount, and the name and address of the payee. A paper copy of the PRF and the authorisation email should be produced and kept as part of the financial paperwork of Freegle. The request may include a covering note to the supplier to accompany the cheque.

4.5 Every payment made by Freegle will be supported by an original invoice or receipt, either as a hard copy or electronic documentation. Payments will not be made against a supplier’s statement or final demand. Each person who signs the cheque should ensure that the Freegle PRF has been fully completed, and that original documentation has been provided.

4.6 The only exceptions to cheques not being supported by an original invoice or receipt would be for items such as advanced booking fees for a future course, donations to charity, etc., or when floats are issued, where a signed request form by the float holder will be used, or for third party payments.

4.7 From time to time opportunities arise for Volunteers to attend events and meetings to represent Freegle nationally. Reasonable travel expenses for the Volunteer may be reimbursable if there are sufficient funds and attendance and costs have been agreed in advance with the Reps.

4.8 Signatories will never sign blank cheques or cheques made out to themselves. Cheques will be sent to the supplier by the last signatory, never to the person requesting the cheque, unless it is a reimbursement payable to them.

4.9 Cheques must be filled in completely (payee amount in words and figures and date and full cheque stub details) before being sent for signature.

4.10 The same person should not be responsible for ordering, processing and checking invoices/receipts as well as raising cheque requisitions, signing cheques and payments.

5. Floats and Petty Cash

5.1 Under certain special circumstances, the Treasurer, in accordance with authority of Reps (4.1) can issue up to £50 float to an individual for them to disburse within guidelines set down and agreed by Reps at that time.

5.2 Special circumstances may include but are not limited to Freegle volunteers who anticipate incurring incidental costs associated with an event or activity on behalf of Freegle nationally.

5.3 This float will be the sole personal responsibility of the person to whom it is issued and all expenditure must be accounted for with a proper receipt. Receipts will be returned each month to the Treasurer and any unspent funds will be returned along with outstanding receipts to the Treasurer at the end of the agreed period of the float issue.

5.4 Freegle will not operate any ongoing petty cash systems.

6. Third Party Receipts and Payments

In order to facilitate grants offered to affiliated groups that have no bank account or individuals doing specific work for Freegle centrally, the Freegle bank account can be used to enable payments under the following conditions.

6.1 The grant making body must write directly to the Reps or Treasurer (who will forward to Reps)to explain

• what and who the payment is for
• whether there are any conditions attached to the payment e.g. receipts need to be provided
• whether any/all of the funding might need to be paid back if certain conditions are not met.

6.2 If conditions attached to such grants are too onerous, the Reps reserve the right to not offer a third party service.

6.3 Any individual receiving funds in this arrangement must be a Freegle Volunteer. This status should be validated by at least 2 other Volunteers not on the same affiliated local group.

6.4 . Payment must only be for funding Freegle local or central activities

6.5 . The payment to the individual will not be paid until the above criteria are satisfied and in accordance with section 4 Payments of this document.

6.6 . All such arrangements will be clearly recorded in the accounts.

6.7 Payments will not be accepted if there is any concern as to the source so that there can be no risk of money laundering legislation being breached.

7. Accounts and Paperwork

7.1 The accounts spreadsheet will be updated at least weekly. Access to edit the accounts will only be by the Treasurer ID. [2].

7.2 Back up copies of accounts will be kept electronically and in paper form.

7.3 The accounts will record, for each payment made, the message number of the Reps poll result which authorised the payment, and the name of the second authoriser - the submitter usually being the Treasurer unless there are special circumstances. There will also be a note of the beneficiaries set upon the bank account to receive payments, and the message number of the Reps poll result which authorised them to be beneficiaries.

7.4 Access to edit the accounts will only be by the Treasurer ID.

7.5 The Reps, in consultation with the Treasurer, will prepare a Financial Report which will accompany audited accounts presented to Freegle Volunteers annually.

7.6 Original receipts, invoices and other related paperwork will be held, filed and kept for seven years by the Treasurer, and passed on if the Treasurer changes.

8. Cheque Signatories and Cash Cards

8.1 Each cheque will be signed by at least two people. All cheque signatories will be appointed by the Reps, and the authority clearly recorded. Holders of passwords to view the bank account on the Internet, or make electronic payments (subject to procedure 2.1) will also be appointed by the Reps, and the authority clearly recorded on the accounts spreadsheet and in the form of a copy of the mandate sent to the bank.

8.2 Hole in the wall type cash cards will not be used and if issued by the bank will be immediately destroyed.

9. Confidentiality and Conflict of Interest

9.1 The confidentiality of any volunteers’ financial circumstances will be respected at all times.

9.2 The Reps and those involved in grant applications must declare any conflict of financial interest.

10. Other Rules

10.1 The Reps will consider the level of reserves that is prudent for Freegle to have after the poll to accept the Annual Accounts. Consideration will be given to liabilities, lease agreements and any other significant factors that should be taken into account were Freegle to cease.

10.2 Where assets are purchased, or there are significant stock holdings of non-capital items, e.g. stationery, suitable records will be kept and the items checked at least annually at the financial year-end.

See Financial Management and Controls reviews for the record of reviews and amendments of this document.

ORO Team Roles and Remits
Auditor Role and Remit

Contact email address for the Treasurer: Treasurer@ilovefreegle.org
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