Luton Irish Forum

FINANCIAL PROCEDURE

Introduction

LIF is a registered charity and company limited by guarantee. It must produce annual accounts and report and submit a signed copy of each to Companies House and the Charity Commission annually.

General information

  1. Bank

LIF bankers are: Lloyds TSB, 60 George Street, Luton, LU1 2BB Tel: 0845 3000000

LIF has two current accounts, welfare and the emergency fund and one high interest account at Nationwide Building Society.

  1. Nominated Bank for cash withdrawal facility

Lloyds Bank, 60 George St, Luton, LU1 2BBTel: 0845 3000000

  1. Cheque signatories

LIF’s five cheque signatories are: Frank Horan (Vice Chair), Noreen Kellett (Treasurer), Patrick Leonard(Trustee) replacePauline Sylvester with Assistant Treasurerand Noelette Hanley (Chief Officer). Two signatories are required for each cheque drawn on the LIF bank account.

  1. External Auditors

LIFAuditor: Holmes, Peat, Thorpe, 110 Butterfield, Great Marlings,Luton LU2 8DL Tel: 01582 434311

  1. Financial Year

LIF financial year runs from 1st Aprilto 31stMarch.

  1. Financial Records

All LIF financial records are retained insafekeeping for a period of 7 years.

Responsibility

LIF Board of Trustees is accountable for all incoming resources to LIF and the proper allocation and expenditure of these resources. Changes to LIF Financial Procedures can only be authorised by the LIF Board of Trustees.

LIF Treasurer and Assistant Treasurer(elected posts within the Board of Trustees) have responsibility for ensuring the proper and safe administration of LIF finances to meet the charity’s information needs.

The Chief Officer is responsible for ensuring that day-to-day LIF finance work is carried out in full compliance with its Financial Procedures and Charity/ Company law. The Finance Subcommittee (FS) also prepares budgets and financial management reports, financial recording, bank reconciliation, checking payroll, filing and ensuring supportive and legal documentation for all LIF financial transactions. The Chief Officer may delegate responsibilities with the authorisation of the Board of Trustees.

Purpose of financial procedures

1. To ensure the safe application of LIF funds for the objects of the charity.

2. To record information clearly and accurately.

3. To ensure that financial transactions have appropriate back-up and cross-referencing documentation.

4. To ensure that each financial transaction involves a number of LIF staff, volunteers, Trustees and 2 signatories (2 of 3 for online banking)

5. To ensure funds are managed securely, effectively and at minimum risk.

6. To ensure clarity within LIF of its financial processes and procedures.

7. To comply with legal financial requirements.

CONTENTS

1. Budget-setting and forecasting

2. Other Reporting

3. Audit

4. Banking arrangements

5. Income

6. Claims for expenses and allowances

7. Petty cash and other cash floats

8. Insurance

9. Inventory

10. Investments

11. Orders for goods, works and services

12. Payment of accounts

13. Salaries and Wages

14. Security

  1. Budget-setting and forecasting
  • Annual estimates of income and expenditure (the Budget) are prepared by the FS.
  • The report includes all LIF projected incoming resources and outlay for the forthcoming year, plus written notes on any significant changes by comparison with the previous year’s accounts.
  • The Budget is presented for approval to the Board of Trustees within the first four months of that financial year (after the audit has taken place.)
  • The Board of Trustees will consider the Budget, plus any variations and agree anticipated income and expenditure levels for the forthcoming year. Restricted funds may not be varied.

2. Other Reporting

  • The Chief Officer monitors income and expenditure levels on a weekly basis.
  • The Chief Officer or Treasurer present fundraising, and a statement of financial activates, reports to the Board of Trustees monthly meetings.

3. Audit

  • An annual external audit is arranged for the purpose of carrying out an examination of LIF financial and related systems to ensure the interests of the charitable company are protected.
  • The replacement of Auditors, if required, takes place at the LIF Annual General Meeting or other Board of Trustees meeting convened for the purpose of such appointment.
  • The Auditor or independent examiner will review, appraise and report to the Board of Trustees upon:-
  • The soundness, adequacy and application of financial controls
  • The suitability and reliability of financial and related data.
  • Any other matter, which should legally be brought to their attention.
  • The auditor or independent examiner is authorised to:
  • enter the office at reasonable times
  • have access to all LIF financial records and transactions
  • require and receive assistance, information and explanation relating to LIF financial and related matters
  • communicate with LIF bankers in relation to LIF bank accounts

4. Banking arrangements

  • Correspondence and other arrangements with LIF bankers concerning its bank accounts are made through the FS in the name of the Organisation and copies are kept on file.
  • Only the Board of Trustees may authorise the opening of a new bank account, the closing of an existing bank account or changing LIF bankers.
  • In no circumstances will an LIF bank account be opened in the name of an individual.
  • Safeguards are in place to ensure that the raising of orders, the preparation of cheques, the signature of cheques, the entry of cash accounts and bank reconciliation are not the sole responsibility of any one person in LIF.
  • LIF bank accounts will be reconciled once in every month. Detailed reconciliation is carried out quarterly in March, June, September and December. The reconciled amount shall be notified to the Treasurer.

5. Income

  • All income received is recorded and banked promptly by the FS.
  • Amounts equal to or exceeding £1000 cash are lodged to the LIF bank account within 24 hours of receipt, where possible, except where bank-opening hours exclude such lodgement.
  • Cash, cheques etc held for lodgement are kept in a safe.
  • Income received as donations, fees etc., by any staff member are promptly handed over to the Chief Officer, or named person and kept in a safe. The donation box must be emptied weekly.
  • Outings etc must be authorised by the Board of Trustees or its Subcommittee. Payments must be requested discreetly, notice given and collected only on the premises of LIF.
  • Income accrued for any service rendered on behalf of LIF by any staff member is reported to the FS, who will arrange appropriate invoicing.
  • Income received for restricted purposes is recorded as such and accounted for as a separate restricted fund.

6. Claims for expenses and allowances

  • Staff, Trustees, volunteers, etc may submit claims for expenses usually at the end of each calendar month for reimbursement in the following month. Late claims may not be honoured.
  • The Chief Officer is responsible for ensuring all claims were properly incurred and payable by LIF and certifies claims for reimbursement.
  • Claims for expenses, including travelling, should be submitted on the relevant form, copies of which are given to each staff member on induction.
  • Staff expenses normally include travel (fares and mileage), parking, for out-of-hours working and other work-related expenses agreed by the LIF Board of Trustees.
  • Childcare costs are not covered at this time.
  • Board of Trustees members may reclaim costs associated with their official duties as Trustees of LIF.
  • LIF does not refund car mileage expenses at levels higher than Inland Revenue approved non-taxable rates.

7. Petty cash and other cash floats

  • LIF adopts the imprest system in the management of its 2 petty cash floats; welfare (£500) and the emergency fund (£400).
  • The FS provides petty cash accounts as considered appropriate for the purpose of reimbursing and defraying the cost of minor expenses where payment by cheque is not normally used.
  • Petty cash is available only for payment or refund of payment for goods and services supplied to LIF. No loans from petty cash should be made to any person.
  • The FS may prescribe conditions for petty cash disbursements in line with reasonable organisational limits.
  • All petty cash payments should be adequately evidenced and properly authorised by the FS.
  • Petty cash is kept in a locked safe.
  • Access to petty cash is limited to the FS, or other authorised person.
  • Individual claims for petty cash should not exceed £50. Advance permission of the FS should be sought before expending any sum greater than this amount requiring to be defrayed from Petty Cash.
  • The recipient staff member is fully accountable for such advance and should return any unspent sums plus documentary proof of all expenditure made in relation to such sum to the FS.The amount of any such cash float should never exceed £500 per week. Cash floats, which exceed this sum, require full advance approval of the LIF Treasurer.The use of cash floats (other than petty cash) is expected for The St Patrick’s Day Festival, and other cultural and social events. FS approval should be sought before the issue of a cash float.

8 Insurance

  • The Chief Officer is responsible for ensuring that adequate insurance cover exists for all LIF activities.
  • The Chief Officer will review insurance requirements at least annually and affect all insurance cover.
  • Any insurance claims should be submitted to the Chief Officer before processing.
  • The Chief Officer should be given prompt notification by any staff member of all new risks or purchases related to their posts, which require to be insured, and of any alterations, which might affect existing insurance.

9 Inventory

  • An inventory shall be maintained of all LIF fixed assets, such as furniture, fittings and equipment having a minimum purchase or resale value of £50 and an estimated shelf life of over 12 months.
  • The inventory shall be held online.
  • The Chief Officer shall be responsible for overseeing an annual physical check of inventory items.
  • Assets owned by LIF shall, as far as practically possible, be effectively marked as LIF property.
  • Evidence of LIF ownership of inventory items should be retained on a file dedicated for the purpose of recording LIF inventory purchases and acquisitions.

10 Investments

  • All investments or the disposal of investments require the full and advance authorisation of the FS, having regard to the current legislation.
  • The FS shall carry out the management of LIF investments.

11 Orders for goods, works and services

  • Official orders shall be in a format approved by the FS and are to be signed by the Chief Officer and/ or other workers authorised by the Chief Officer. Orders outside this will be approved by the FS.
  • A copy of each order shall be retained.
  • Where an order is amended or varied, a note of the amendment or variation shall be made on the copy order.
  • Authorised staff making orders shall match copy orders with invoices before payment. Details of payment shall be recorded with the relevant invoice.
  • As no official order need be written out for utility services, such as gas, telephone and water, a record of usage shall be maintained to avoid duplicated payment and to monitor consumption trends. The Chief Officer will monitor and manage telephone usage by the organisation.

Best value Principles

  • Where the projected cost of an order exceeds £250 in value, a minimum of 2 written quotations should be sought before purchase. For quotations up to £500, and in accordance with LIF budget, the Chief Officer will decide the successful supplier having regard to quality, quickness of delivery and cost of the goods. Quotations amounting to over £500 need the prior approval of the Board of Trustees.
  • In the event of an emergency purchase, where the projected cost is greater than £500, the FS may give interim approval for the order. Such approval should be formally ratified at the next Board of Trustees meeting.

12 Payment of accounts

  • Apart from petty cash and interest payments, the usual method of payment of money due by LIF shall be paid by debit card or online. Noreen Kellett, Pauline Sylvester and Noelette Hanley have access facilities. Invoices are logged, authorise and paid to ensure financial controls are in place.
  • The Chief Officer has a duty to ensure that all goods, materials and services received are as described in the original order in terms of price, quantity and quality.
  • The Chief Officer and/ or appropriate person should be informed immediately of any discrepancy requiring resolution of any order, before payment of any account is finalised.
  • The FS and where appropriate other signatories shall check invoices due by LIF before payment to ensure:
  • the invoice is arithmetically and legally correct
  • discounts receivable have been deducted
  • the goods have been correctly ordered and received
  • the invoice has not previously been paid
  • proper coding, budgetary and project headings are assigned to the expense
  • any standing charges are correct
  • All payments of invoices due by LIF require the authorisation of two of the five signatories as outlined under “General information (b)” on page 1 of these procedures.

13 Salaries and Wages

  • Notifications such as new employees, changes to the status or working hours of existing employees, unpaid and paid absences and changes to staff remuneration should be FS by the 24th of the month for inclusion in that month’s payroll [the earliest submission date in a month].
  • The FS prepares and signs the calculation and record of payroll submission. The Chief Officer is responsible for ensuring all calculations are correct and in line with current payroll legislation.
  • The FSsubmit the payment of all salaries online. Salaries are paid monthly on the 28th day of the month.
  • All LIF staff pay and related conditions of employment are decided by the Board of Trustees.

14Security

  • Each member of LIF staff shall follow office security procedures.
  • Security arrangements for LIF offices are the Chief Officer’s responsibility. The Chief Officer may delegate this responsibility where appropriate.
  • The maximum limit of cash to be held on LIF premises at any one time is agreed with the FS and in accordance with insurance cover.
  • The Chief Officer is responsible for maintaining a list of persons to whom LIF office keys have been issued and to ensure the return of keys from staff that have left LIF.
  • LIF chequebooks, petty cash or float, bank correspondence and statements should be retained in a locked cupboard or other secure place. If it becomes necessary to remove these items from LIF premises, the individual responsible will ensure they remain in a secure place and return them to LIF premises at their earliest convenience.

Last Review Date: October 2015

Next Review Date: October 2016

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