Financial Management Policy

08/08/2019

Author:
Alok Bhatia

Policy Statement

The purpose of this policy is to establish guidelines for developing financial goals and objectives, making financial decisions, reporting the financial status of ServePlanet, and safely managing its funds.

Financial Responsibilities

It is the responsibility of the Board of Trustees to formulate financial policies and review operations and activities on a periodic basis. The Board of Trustees are responsible in law for ensuring the solvency and financial probity of ServePlanet. They appoint the Financial Administrator who has the duty to exercise overall control of the policy and general management, including the financial affairs, of ServePlanet. The Financial Administrator delegates day-to-day financial matters to the staff team which closely works with the designated external independent Book Keeper.

1. The financial records will be kept so ServePlanet can:

1.1 Meet its legal and other obligations, e.g. Charities Acts, Company Law, HMRC and common law

1.2 Enable the trustees to be in proper financial control of ServePlanet.

1.3 Enable ServePlanet to meet the contractual obligations and requirements of funders.

2. ServePlanet will keep a proper accepting system, which will include

2.1 A cashbook analysing all the transactions in the ServePlanet's bank account(s). This may be computer package, excel or paper.

2.2 A petty cash book if cash payments are being made.

2.3 HMRC and records which may be kept by pay roll bureau.

3. The financial year will end on the 31st. March each year.

4. Accounts will be drawn up after each financial year within five months of the end of the year and presented to the next Annual General Meeting.

5. Prior to start of each financial year, the trustees will approve a budgeted income and expenditure account for the following year.

6. A report comparing actual income and expenditure with the budget will be presented to the trustees every three moths.

7. A cash flow will be produced each month if ServePlanet is in financial difficulties or reserves are less than three months expenditures.

8. The AGM will appoint an appropriately qualified independent examiner to examine the accounts for presentation to the next AGM, filing with Charity Commission when appropriate threshold is exceeded and if appropriate, filing with Companies House.

9. The Financial Administrator acts as the primary fiscal agent, implementing all financial policies and procedures. The Financial Administrator, in conjunction with the book keeper is responsible for the coordination of the following:

9.1 Annual budget presentation and quarterly update reports.

9.2 Approving revenue and expenditure objectives in accordance with the Board approved long term plans.

9.3 The correct implementation of ServePlanet's Ethical Donations Acceptance Policy and Grant-making Policy.

9.4 The day to day responsibility for managing funds of ServePlanet.

10. The Book Keeper is responsible for:

10.1 Ensuring the accuracy of the accounting records, internal controls, financial objectives and policies, financial statement preparation, and bank reconciliation review and approval.

10.2 Accounts Payable Processing, Payroll input and Payroll processing, VAT.

10.3 Cash Receipts input, Journal Entries for General Ledger and Bank Reconciliations.

10.4 In discussion with the Trustees, selection of the external auditors.

11. The Nominated External Accountant is directly supervised by the Trustees and is responsible for the preparation of the Chartered Accounts.

Responsible Persons

The following people are nominated card holders, signatories and safe key holders:

1. The Treasurer

2. The Financial Administrator

These people will oversee the management of day to day money handling policies and procedures.

Conflict Of Interest

Members of the Board of Trustees are prohibited from activities that might present conflicts of interest. The powers of trusteeship may not be used to personally benefit the Trustee at the expense of ServePlanet. If a Trustee has a financial interest in a corporate transaction, they must fully disclose the interest and abstain from voting. Loans to Trustees are prohibited.

Budgeting Process

  1. The entire Board must approve the budget. The Financial Administrator is responsible for presenting an annual operating budget draft to the Board of Trustees.
  2. The Board of Trustees shall review and approve the recommended fiscal year budget revenues, expenditures and cash flow. The budget will contain revenues and expenses forecasted by month.

Financial Statements

  1. ServePlanet's financial statements shall be prepared on an accrual basis in accordance with Generally Accepted Accounting Principles ("GAAP").
  2. The Financial Administrator shall prepare and present quarterly financial statements in a format approved by the Board of Trustees.

Audit

  1. ServePlanet will have an audit of its financial statements periodically and at the request of any grant and/or funding providers. The audit will be completed by a firm of Independent Certified Public Accountants. The Board of Trustees and external Book Keeper has direct responsibility in overseeing the implementation of the annual financial audit. In addition, the Financial Administrator will assist when necessary in the audit preparation, and report the final results to the Board of Trustees.
  2. A representative of the audit firm will be invited to attend the annual presentation to the Board of Trustees, and will be required to make a presentation to the Board if the audit report is other than unqualified, or if the auditor's report material weaknesses in internal controls or reportable conditions.

Revenue and Income Procedures

Donations

As ServePlanet is a charity, donations are frequently made. Donations are given either online directly into a bank account or in a donation collection box in the shops appointed by ServePlanet. Any donations received by ServePlanet is subject to the same money handling and banking procedures as any other form of income.

Donation Boxes are collected on fortnightly basis. The procedure for safe collection of donation boxes is as follows:

  1. A designated team of support workers, including volunteers of ServePlanet are responsible for the fortnight collection.
  2. The team collects the individual collection-box keys from the office and sign the register reflecting the issuance of key.
  3. ServePlanet follows a four-eye policy. It is mandatory that two support workers visit the designated shop(s) and follows the following protocol:

(i) Meet the manager/ staff at the shop and identify themselves along with official ID and photo ID.

(ii) Enters their names and signatures in the register maintained in the shop of their arrival and departure time.

(iii) Click the picture of the donation collection box prior to emptying it.

(iv) Unlocks the donation collection boxes and empties the same.

(v) Clicks the picture of the total collection after emptying the collection box.

(vi) Separate notes and coins in the bags provided for the purpose in the presence of other monitoring support worker/ volunteer.

(vii) Places back the donation collection box in the lock using the safe key and clicks the picture of empty box.

(viii) One support workers enter the amounts collected on the collection report provided and signs it and the other confirms the amounts collected and signs the collection report.

(ix) Deposit the collection at any of the branch of the Bank Account of CIO/ Post Office.

(x) Submits the deposit receipt, collection report and photographs of the collection with the Financial Administrator.

Recording Receipts and Banking

The following procedures for cash received is in place:

  1. All monies received will be recorded promptly in the bookkeeping system and banked without delay and no later than the next business day into ServePlanet's Bank Account. Risk assessments are completed for this activity and ServePlanet will maintain files of documentation to back this up.
  2. All cash and cheques received through the post shall be forwarded to the Financial Administrator, or other staff involved in the accounting function.
  3. This person records all cheques and cash by date, name of company or individual, and amount.
  4. In the event of money being credited electronically to ServePlanet's bank account, ServePlanet will issue reference numbers to customers for them to use when making electronic payments, to ensure that receipts into the bank account can be traced to the customer easily.
  5. If ServePlaner runs any form of electronic bookings for its customers it will ensure that the system is reconciled to the bookkeeping system and that all customers who should be invoice are invoiced.
  6. ServePlanet will keep a record of aged debtors and contact debtors every month.

Expenditures Procedures

  1. The aim is to ensure that all expenditures is on ServePlanet's business and is properly authorised and that this can be demonstrated.
  2. All expenditures are to be approved by Board of Trustees.
  3. All expenditures are coded by account number using ServePlanet's agreed Budget codes.
  4. The Financial Administrator and Book Keeper maintain standard accounting records containing all aspects of ServePlanet's financial operations. They include but are not limited to a general ledger, a cheque register and a payroll register.
  5. Invoices will be approved by either Trustees or the Financial Administrator.
  6. Upon payment of a bill, a record of the cheque number or BACS payment date will be written on the invoice.
  7. The paid invoices will be filed alphabetically according to company/individual name and are kept on a fiscal year basis on file.

Signature Policy

  1. The Treasurer is to sign all cheques, or orders for payment of money from petty cash, and use the Company Credit Card to make on line payments on behalf of ServePlanet.
  2. Blank cheques will NEVER be signed.
  3. The relevant payee's name will always be inserted on the cheque before signature and the cheque stub will always be properly completed.
  4. No cheques should be signed without original documentation.

Payroll

Payroll is executed monthly for payment by BACS into staff accounts on the last day of each month. Payroll is calculated by the Book Keeper and payment is made by the Financial Administrator. Monthly payroll expenses are verified by Financial Administrator against payroll reports along with annual leave, toil and sickness reports.

Salaries

  1. The salaries of all employees are determined by the Board of Trustees. The Enhancements and/ or adjustments for all staff positions will be recommended by the Financial Administrator and approved by the Board.
  2. All staff appointments/ departures will be authorised by the trustees, minuting the dates and salary level. Similarly, all changes in hours and variable payments such as overtime, etc. will be authorised by the trustees.
  3. There will be a clear trail to show the authority and reason for every payment: E.g a cheque requisition, asking for payment to an employee, HMRC, etc. All employees will be paid within HMRC regulations.

Local Travel and Expense Reimbursements

  1. Employees must abide by ServePlanet's Travel and Expense policy. Travel and expense reports for mileage, meals, supplies, etc., will be maintained by each employee and then submitted to the Financial Administrator for approval and payment on a monthly basis.
  2. Mileage to and from the employee's residence to the place of work will not be paid by the ServePlanet. Reimbursements will be based on the travel rate established by the Board of Trustees and approved through the budgeting process. Travel reimbursement shall not be above Inland Revenue Guidelines. All parking and other expenditure receipts must be attached to the expense voucher as a condition for payment.

Credit Card Expenditures

The Board of Trustees will approve the provision of a company issued credit card for employees who are authorised to make purchases. Employees must utilize that card only for business use. Employees must submit a purchase order voucher that explains the business reason for items purchased using the credit card which is then submitted to the Financial Administrator for recording and reconciliation.

Purchasing

  1. Any expenditure in excess of £5,000.00 (five thousand pounds) should have bids from three (3) suppliers if possible. These bids are reviewed by the Financial Administrator and the bid award must be specifically approved in advance by the Board.
  2. Purchase of less than the approved amount may be made at the discretion of the Financial Administrator without competitive bids. However, for fixed assets, reasonable diligence should be exercised to comparatively shop for available sources.
  3. Any purchase made by a Board member on behalf of ServePlanet will require prior approval by the Chairman of the Board.
  4. In the event of any online purchases, ServePlanet will ensure that only well known bona-fide sites are used that have appropriate security as illustrated by a lock padlock in the bottom of the screen when payment is being made. Such purchases will be properly authorised in a similar way to other purchases.

Leases and Other Contractual Agreements

  1. ServePlanet conducts its operations from leased facilities. Leases and other contractual agreements are negotiated by the Treasurer with the approval of the Board.
  2. The Financial Administrator and/or the Treasurer are jointly and/or severally authorised to develop and enter into contractual agreements with vendors, bankers, and third parties for the purpose of ensuring ServePlanet's general operations. The Board of Trustees shall review such agreements and make recommendations when necessary.

Notes, Loans, Etc.

All notes, loans and other indebtedness to be contracted in the name of ServePlanet (except open accounts and all other routine banking transactions), shall require the signature of the Treasurer, unless otherwise specified by the Board. All indebtedness must be approved by the Board of Trustees.

Deeds, Conveyances, etc.

The Treasurer shall execute all Deeds, Conveyances, Mortgages, Leases, Contracts and other instruments in the name of ServePlanet.

Bank Accounts and Investment Accounts

1. The Financial Administrator and Book Keeper will maintain and oversee Bank and Investment accounts. The bank accounts shall be held in the name of "ServePlanet".

2. ServePlanet shall maintain the following bank accounts:

(i) Business Account

(ii) Charity Deposit Account

(iii) Fixed Deposit Account (for funds earmarked for spending in future years)

(iv) Any other account(s) deemed necessary for the smooth operations of ServePlanet.

3. The bank mandates (list of people who can sign cheques or authorise electronic payments on the organisations behalf) will always be approved and minuted by the trustees as will all the changes to it.

4. ServePlanet will require the bank to provide access to electronic statements. These will be reconciled with the bookkeeping system at least every three months and the treasurer will spot check that this reconciliation has been done at least twice a year, sign the reconciliation document accordingly. The electronic statements will be printed off and filed every month.

5. Other than its designated bank, ServePlanet will not use any other bank or financial institution or use overdraft facilities or loan without the agreement of the trustees.

6. All cheques, cash, money orders, and credit card deposits, are reviewed by the Financial Administrator and deposited into the Business Account.

7. Monies are automatically transferred from the Business Account to Charity Deposit Account if the balance, after all the pay-outs at the end of month, exceeds £2,000. When necessary, monies are transferred from the Charity Deposit Account to Business Account by the Financial Administrator and/or Treasurer.

    E-Banking

    1. The Treasurer and/ or Financial Administrator will have a unique password which will be made up of lower and upper case letter, numbers and symbols.
    2. The Treasurer and/ or Financial Administrator will be able to access the electronic banking system for the purposes of putting transactions onto the system for authorisation by the signatories and for assessing bank statements.
    3. The Treasurer and/ or Financial Administrator will check that purchases have been properly authorised and when appropriate there is evidence that goods in a good condition or proper service have been received.
    4. The Financial Administrator will scan and e-mail invoices and evidences of authorisations to the Treasurer.
    5. The Treasurer will check the payment details sort code, account number, invoice and amount. If these details are accurate the Treasurer will authorise the payment.

    PayPal

    1. The Treasurer will hold the log in details and password for PayPal and will authorise payments form PayPal. Details of the payments and transfers will be e-mailed to Financial Administrator immediately they have been made.
    2. The balance in PayPal will not exceed £5,000. Appropriate transfers will be made to ServePlanet's bank account to ensure that this amount is not exceeded.

    Bank Reconciliations

    1. Bank reconciliations shall be completed monthly by the Financial Administrator/Book Keeper and cross referenced with the cash and receipts logs and the monthly Financial Statements. The Financial Statements are compiled by the Book Keeper. The Statements are then reviewed by the Financial Administrator and presented to the Board of Trustees quarterly.
    2. All Bank Statements and Credit Card Statements are reconciled every month by the Financial Administrator and records kept in the Finance office.

    Petty Cash

    1. A petty cash fund provides a systematic method for paying and recording out of pocket cash payments. ServePlanet will maintain a petty cash fund that is sufficient for the time of year and replenished as needed.
    2. The Financial Administrator maintains control of, and responsibility for, payments disbursed from the Petty Cash fund.

    Other Undertakings

    1. All fundraising, contract bids and grant applications made on behalf of ServePlanet will be done in the name of ServePlanet with the prior approval of the trustees.
    2. Copies of the grant application will be kept and available to trustees on request. When bids are made using internet portals electronic or proper copies of the bid will be kept.
    3. ServePlanet will adhere to good practice in relation to its finances at all times and will maintain a property record of items of significant value, with an appropriate record of their use.
    4. ServePlanet will maintain up to date good quality antivirus and anti-phishing software on all computers that connect to the internet.


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