Finance & Fundraising Policy/2012

This is a draft for comment, which will be proposed for adoption by the Board on 3 January

Introduction

As a registered Charity, and a very public one at that, it is imperative that we institute financial controls that satisfy the expectations of the Charity Commission, our community and the Wikimedia Foundation.

This policy reflects two major developments in the chapter, namely the appointment of our first permanent staff on 1 October 2011 followed by the approval of our charity status by the Charity Commission on 5 November 2011 with its duties and responsibility.

As part of this policy, the system is set out where the Board of Trustees agrees the annual plan with financial allocations. The staff then administer the spending and the reporting against budgets. Volunteers receive support through the expeditious payment of expenses and grants agreed by the board.

The policy has been developed by bringing together best practice in the UK Charity Sector with what already exists within Wikimedia UK to create a robust framework that will be practical, proportional and secure. Charity commission guidance has been applied where appropriate and discussions have been had with Jon Worsop at UHY Nottingham, our accountants, and a meeting with UHY London.

This policy is intended to be flexible enough to allow for the expected growth of the chapter over the next few years. It is effective from 1 February 2012. In some areas there will be a period of transition where this policy is not fully implemented at first. These areas, along with any other exceptions, will be reported by the Chief Executive to the next Board meeting.

Key Principles

1. That our assets are safeguarded from loss, damage or fraud
2. That our assets are applied to our objects in the most effective and efficient way
3. That volunteers are facilitated to help deliver the Wikimedia UK mission.
4. That our finances and assets are administered in a way that identifies and manages risk
5. That the controls in place are proportionate to the risks
6. That the highest standard of record keeping and financial reporting is maintained
7. That financial reporting is clearly expressed and highly transparent
8. That duties are sufficiently segregated in order not to overburden any individual or allow an excessive concentration of authority

Specific proposals

Item		Notes/Action
Reporting
That the charity's financial performance is regularly monitored against budget		Administrator reporting to CE and treasurer with quarterly reports to board and published to appropriate wiki.
This should include management accounts, a comparison of budget to actual figures, an explanation of variances and details of cash flow, card accounts and closing bank balances.
That there shall be monthly financial reports and bank account reconciliations. These will be available to the community through the appropriate wiki.		Administrator reporting to CE and treasurer
That there be regular reviews of income and expected income.		Administrator reporting to CE and treasurer with quarterly reports to board and published to appropriate wiki.
Trustees or volunteers with responsibilities for a project area e.g. GLAM projects will agree their plans and budgets with the CE and any appropriate staff, The spending and administration will then be the responsibility of the staff with regular reporting to the trustee concerned and the Bard		Leading trustee and appropriate staff
That we report quarterly to the Foundation in parallel with the board meeting our financial position against budget in line with best SORP practice.		CE to Foundation.
Accounting
That sufficient accounting procedures in line with good CC practice and our accountant's advice are kept to show all transactions.		Administrator. Via Sage. With accountant support. Published to Office
That annual reports in line with SORP (Statement of recommended practice) are published.		Administrator and Treasurer with accountants. Published to everyone. Attractive format for partners and members.
Restricted grants will be identified as such and have their won costs centres within the accounts		Administrator
That donations 'in kind' will be recorded and registered in the accounts.		Administrator to work with accountants
External scrutiny of accounts.		Accountant/auditors
That accounts are filed with the Charity Commission.		Administrator
Similar with Companies House as necessary.		Administrator
That we meet any request from public for annual reports.		Administrator and posted on web
Safeguarding the assets of the charity		See later sections
Preventing and detecting fraud, financial abuse and other irregularities.		See later sections
Criminal financial abuse
Abuse of public collections and fundraising events.		Not relevant at moment but procedures needed if this changes.
Theft of data.		All data to be password protected and on password protected computers. Access to be restricted to minimum of staff, trustees, volunteers and contractors.
Income received in the post
Post should be held securely before collection.		Post room in offices open access. Will need to collect promptly or ask for secure holding.
The post should ideally be opened in the presence of two 'unrelated individuals' with rotating staff where practical.		Will be difficult to arrange in short term - an identifiable risk.
Income logs kept and reconciled against bank payments.		Administrator with CE or treasurer.
Gift Aid
Accurate records and timely returns to ensure prompt recovery.Spot checks to ensure amounts claimed.Spot checks to ensure payments received.		Administrator with CE or treasurer.
Trading income
Not a huge issue for us - may be some training income. Sponsorship would be treated as donations.
VAT
That we do not register for VAT. Most charities of our size do not. This is not economically sensible given we do not have any trading activities of significance but that we take advice from accountants in order to avoid any unnecessary VAT payments when supporting other chapters for instance.		Administrator and CE to liaise with accountants.
Banking
Cheques to be opened in the presence of two staff or failing that recorded and tallied up as soon as possible.
All cheques pending cashing to be held in strong box or safe		Purchased
All cheques and cash in recorded in register		Purchased
Cheques and cash reconciled with paying-in slips		Administrator with CE or treasurer.
Paying-in slips reconcile with bank statements		Administrator with CE or treasurer.
Insurance cover purchased		Being arranged
That clear and public authority levels are established for purchases and payments on behalf of the Charity (not expenses).		See below.
All orders placed are within an agreed spending plan or budget. Any additional spending to be authorised by CE and treasurer or board as appropriate.		Administrator to reconcile
That all invoices are checked against goods or services received.		Administrator to reconcile
Sadly a safe secured to the building not easy to have in current premises. Insurers happy with our current security.
Authorisation limits
That within agreed budgets the following authorisation limits are agreed:
CE - Up to £1000 per transaction. Spending agreed with Treasurer and current account kept at lowest possible level to cover cash flow.		All payments monitored by Administrator
Other staff - Up to £250		To be signed off by CE
Petty Cash - £200 float in office with log book.		Administrator with regular check in book by CE. See cash payments section
Larger amounts or special payments outside budget heads.		CE with trustee agreement. In extreme urgency Chair or Treasurer with report as soon as possible to trustees.
International transfers to the Foundation shall be agreed by the board.Others, e,g, to other Chapters can be agreed under the general budget making process or by agreement of the board in special circumstances.		Undertaken by Treasurer(and another trustee or the CE?)
Expenditure and procurement procedure
Value for money - all expenditure must be considered in terms of 'value for money'. Are the suppliers reliable and reputable and are their charges, when measured against similar suppliers reasonable.		All staff, volunteers and trustees to consider and be able to provide evidence.
We shall endeavour to source local, environmentally friendly and sustainable suppliers wherever possible.
Contractors, e.g. developers or lawyers, should be chosen only after two equivalent quotes have been obtained. When the lowest quote is not chosen reasonable arguments must be put forward for this decision.
The purchase of any equipment over £1000 must show evidence of comparative quotes having been sought.
In exceptional circumstances, e.g. urgency or a very specialist item, a single quote can be acceptable.		To be reported to Chair and Executive.
All procurement shall be subject to our Conflict of Interest policy.
Grants
Use current procedures to ensure that all grants payments are made legitimately and used appropriately.		CE with trustees
Use current grant making policy in setting out conditions and any restrictions applying to grants awarded.		CE with trustees
Use our current procedures for the review and approval of grant applications published with appropriate controls on integrity of individuals instituted.		CE with trustees
Payments by cheque
That secure procedures are instituted for any payment by cheque. Two signatories Only in presence of documentation supporting the request for the cheque No pre-signed cheques Separate record of all cheques, their numbers and details kept Chequebooks kept in secure locked place		Administrator.
Monthly review of bank statements against cheques.		Administrator.
Payments by debit card, credit card and charge cards.
Agreed that CE will have a card of some sort to do day-to-day payments including expenses.Other staff or trustees to be considered in future if need can be demonstrated. To be published on appropriate Wiki.		Treasurer to monitor with administrator. If Chair then CE to monitor with administrator and treasurer.
All payments to be validated		Administrator with reference to Chair and treasurer as appropriate.
Staff, trustees or volunteers using a Wikimedia UK credit card shall agree to a deduction from their salary in the evnt of improper use.
Card payment to be only used for the payment of bills incurred by Wikimedia UK. On behalf of Wikimedia UK or as expenses directly related to duties undertaken for Wikimedia UK.		Administrator to verify and report to treasurer.
All cards to be destroyed or cancelled if the individuals ceases to work for or be a trustee of Wikimedia UK.		Administrator and treasurer
Copies of all statements to be sent directly to the offices of Wikimedia UK.		Administrator to verify all payments and report to treasurer.
Periodic review of card use to ensure proper practice.		Administrator reporting to treasurer.
Payments by direct debit, standing orders and BACS
Move to banking system with dual signature BACS payment authorisation system.		Treasurer with CESuggest two out of Chair, Treasurer, CE and Administrator to be authorised.
Direct debits. Quarterly review to ensure no redundant payments being made.		Administrator
Standing orders. Quarterly review to ensure no redundant payments being made.		Administrator
Electronic banking
No single person shall have control of substantial resources.
That BACS payments be subject to two electronic signatories.		See above.
After each electronic banking transaction a print out should be taken showing details of that transaction and stored as part of the accounting records.		Administrator to maintain and supervise.
That paper print-outs of all statements be taken and maintained.
That all PC's with banking access be password protected.
That all passwords are kept secret.
That passwords are changed regularly and always following changes in authorised staff and trustees.
That adequate training is provided to all involved in on-line financial transactions.
That Emails should be avoided when communicating bank details to avoid accidental disclosure of passwords, sensitive information etc.
Payments in Cash
Reduce to bare minimum. though Petty system available for day-to-day.A float of up to £200 be maintained.Recipients to sign for all payments received.All payments entered in book and signed for.Running balance of Petty Cash keptRegular spot checks of Petty Cash made by third party.Per Diems will normally be paid by BACS not Petty Cash.		AdministratorCE to obtain float.
Wages and Salaries
That full records of all payments and deductions are maintained.		Our agency monitored by Administrator
Statutory deductions paid to HMRC monthly		Our agency monitored by Administrator
Year end declarations completed, P35, P11D and P60's		Our agency monitored by Administrator
Minimum wage legislation adhered to.		Our agency monitored by Administrator. Trustees to oversee.
No unauthorised deductions taken from pay		Our agency monitored by Administrator
All employees have a proper contract of employment.		CE with board support
Legal options in respect of pension schemes met.		Need to a. set up stakeholder scheme for people to opt in to.b. Agree level of employer contributions. 3%?
Pay records to be held separately from HR files		Currently the case
Procedures in place to record starters, leavers, changes in salary, overtime, sickness, maternity etc.		Assume this is with our agency.
System of appraising salaries in place. CE to make recommendation based on RPI, performance and market forces.		CE to make annual recommendation to Board for decision.
Expenses
CC states: It is important that controls over expense payments are applied without exception to all those involved with the charity: trustees, staff and volunteers.
The policy should set out a definition of legitimate expenses		See below
The policy should set out the requirement for the provision of properly identified claims and original receipts. If necessary credit card or bank statements may be acceptable.		UHY say that there is discretion with e-receipts that can be used but otherwise originals needed for audit.
That the policy is clearly available to everyone in the charity		We can go further than that for complete transparency
That the process of claiming expenses is revised to ensure ease of use.		CE with Treasurer
The policy is included in all induction training		CE with administrator
No expenses claim can be authorised by the claimant and must be checked for accuracy and the correct associated paperwork before authorisation.		CE's expenses to be checked by Administrator for forwarding to Chair or delegated trustee for approval.All other expenses to go to CE for checking with administrator before authorisation.
All expenses to be submitted within three months of being incurred or the last month of the financial year (except in exceptional circumstances to be approved by the CE or Chair).		Office will receive all expenses claims for logging, checking and processing.
All expenses claims to be paid by BACS within a week of approval.		CE with second electronic signatory.
All expenses to be published on the appropriate Wiki		Trustee, staff and volunteer expenses to be published on an appropriate wiki detailing the date, amount, purpose and recipient.
Any mileage claims should be paid as per the HMRC agreed rates.		Administrator to monitor.
Unless we can receive a dispensation an annual P11d expenses form will be provided for the HMRC for any staff earning more that £8,500 p.a.		Administrator.
Expenses policy
That Wikimedia UK is committed to reimbursing the actual and necessary expenses incurred by volunteers, board members and staff engaged on Wikimedia UK business whether in the UK or if required overseas.
Travel - this does not include employees day-to-day travel to work.
Airfare	Airfares at economy class rates. Budget airlines are preferred where available; otherwise the use of standard airlines is acceptable, particularly when flights are of long duration (i.e. over 2 hours). Increased costs resulting from travelling at more convenient times are acceptable. Flights not using low cost carriers should be booked through the office with our in-house travel agent Key Travel to obtain charity rates
Train	Where possible, travel by train is preferable so long as it does not take significantly longer, or has a significantly higher cost, than flying.Train fares at standard rates (off-peak rates are preferred wherever possible). First class fares may be reimbursed providing that the cost is less than standard class plus additional relevant expenses (e.g. either the ticket is cheaper than the equivalent standard class ticket, or the reasonable benefits of first class [i.e. internet access and catering] outweigh the increased cost of the ticket).
Private vehicles	Travel by private motor vehicle at HMRC rates adjusted based on the fact that mileage is more likely to be incurred for individual trips than in bulk throughout the year. An additional 5p per person per mile may be claimed when carrying passengers who are also on WMUK business. Claimants should ensure that their car insurance allows them to be compensated for travel. This may require them to include use for business purposes on the insurance for the vehicle. The cost of such coverage, or any other insurance coverage including breakdown cover, will not be covered by WMUK beyond the standard rates.Toll charges where unavoidable will be reimbursed.
Vehicle HMRC rates per mile	First 10,000 miles	Over !0,000 miles
Cars	45p	25p
Motorbikes	24p	24p
Cycles	20p	20p
Car rental	Vehicle rental may be approved in advance where necessary on a case-by-case basis, but would not be reimbursed on a routine basis. For example when necessary to transport bulky items, or if the cost of renting and petrol is less than the cost of private motor vehicle mileage (as described above) or other reasonable transport alternatives.The higher rate is only payable for the first 150 miles of a trip and a maximum of 10,000 p.a. will be paid at this level.
Insurances	WMUK expects, and encourages, all individuals travelling on WMUK business to have obtained the appropriate travel insurance, and will reimburse the cost of this insurance. WMUK will not normally reimburse expenses and liabilities incurred that would otherwise have been covered by such insurance
Exceptional circumstances	Where travel is being reimbursed for minors (i.e. those under 18 years old), then the corresponding travel for their guardian will also be reimbursed, provided that those expenses are in accordance with the guidance that is set out in this policy.
Accommodation
Reasonable costs of accommodation while on Wikimedia UK business will be reimbursed. We expect people to choose hotels that represent reasonable value. As a guideline this would mean their own room with their own bathroom in a safe area. We recognise that the price of hotel rooms varies geographically and by season.
Conference hotels	When a standard budget class hotel is designated by a conference or workshop, then we would expect people to stay at that hotel even if alternative, cheaper, options exist.
Other accommodation	The definition of 'hotel' above includes accommodation by other means, such as hostels, caravans or camping.
Incidental expenses - per diems
These payments are intended to cover: meals and refreshments (including breakfast, lunch and dinner for the full rate; or either lunch or dinner for the lower rate; in both cases including refreshment costs in between meals) costs of phone calls. Incidental transport costs (e.g. bus fares, car park charges, short taxi rides) too trivial to submit claims for.These are for those attending events as a representative of Wikimedia UK. These do not apply to people attending for their own personal interest.
I think the original suggestions were a bit unrealistic. A cooked meal for example will seldom cost less than £10, a mini-cab or taxi less than £10. The annual cost of this will not be huge. Even at these rates my trip to Berlin would leave me a little out of pocket. Jon
£30 per diem	A full day involving an overnight stay (at least 7 hours of activity or travel to and from)
£20 per diem	A full day not including an overnight stay(at least 7 hours of activity or travel to and from)
£15 per diem	A half-day not including an overnight stay(at least 4 hours of activity or travel to and from)
If the per diem rates prove inadequate owing to high local costs then individual expenses can be submitted for assessment by the office whose decision will be final.
These rates apply to stays of less than 7 days duration within the UK, the rest of the European Union, and the United States of America. Rates for longer stays and other locations may be altered at the discretion of the Chief Executive and Treasurer.Where any volunteer claims per diem expenses on a recurring basis, the Chief Executive or, if necessary, the Board of Trustees will review the arrangement to ensure that Wikimedia UK is not breaking its obligations under minimum wage legislation.Note that WMUK will not reimburse the costs of alcohol, cigarettes or other recreational expenses.
Other expenses
WMUK will also reimburse	Registration costs for conferences Meeting rooms, catering and other corresponding costs for WMUK and WMUK-related events Long-duration car parking expenses where necessary Publicity material, such as badges, T-shirts and printed materials, and corresponding postage costs, where that material is not stocked by the WMUK office Phone calls to participate in meetings remotely Any other reasonable expenses where approved by the CE in advance of the expense being incurred.
In exceptional cases and with the prior agreement of the CE or Chair as appropriate	Childcare or other costs of caring for dependent individuals whilst on WMUK business. Entertainment costs for other parties, where those costs have been approved in principle in advance.
	Any other reasonable expenses where approved by the budget holder in advance of the expense being incurred.
Publication. A condition of receipt of expenses is that all expenses are published on an appropriate Wiki.	The administrator to publish on a monthly basis.
Records of expenditure
All records of expenditure must be checked regularly and reconciled against bank statements, petty cash records, cheque stubs etc.		Administrator.
Spot checks to match invoices and expenses claims against payments should be made		Administrator.
Standing orders, DD to be regularly reviewed		Administrator.
Any restricted funds i.e. donated for a specific purpose have been directed towards that purpose.		Administrator.
Assets
That the assets of Wikimedia UK are safeguarded from loss or damage		CE with staff
That any individual item over £100 is listed as a capital asset.		Administrator
That a fixed asset register is maintained listing all the assets, their purchase price, purchase date, description, any identifying marks and location.		Administrator
That adequate insurance cover is maintained to protect against any loss.		CE with administrator
Investments
The Charity Commission recognises that it is likely that 'some funds will be retained within the context of a reserves policy and were appropriate invested'.
The Board need to consider the suitability and diversity of the investments including investments in deposit accounts to ensure that the failure of one investment or institution does not have a major impact on the Charity.		Treasurer, CE and administrator to advise the board.
That a level of reserves is agreed.		Suggest at least six months running costs but no more than one year's.
That records of all investments held are maintained and reported regularly to the board and the Wikipedian community.		Administrator.
That accounting records clearly record any dividends, or interest payments received.
That the signatories to the current account are not signatories to the Deposit accounts		To ensure no one or two people can empty the deposit account into the current account then pay the money out.
Reserves policy. These protocols incorporate the agreed reserves procedures and policieshttp://uk.wikimedia.org/wiki/Meetings/2010-02-16/Agenda/Reserves_policy
Cash as current asset
Current account reconciliations are prepared monthly for all accounts and reviewed by a second party. Discrepancies resolved or reported to CE and board.		Administrator with Treasurer to review.
No account should be opened or closed without the authorisation of the board.
No third party shall be allowed to open accounts in the Charity's name.
The credit rating, charges and interest of the banks used shall be reviewed at least annually.		Treasurer and administrator reporting to the board.
Personal probity
That Wikimedia UK ensures that no staff or trustees have convictions for criminal activities that jeopardises their position in the Charity or the reputation of Wikimedia UK.		Administrator to check.
Conflict of Interest
No board or staff member or volunteer may: Buy from Sell to Be employed by, or Receive financial benefit from the chapter unless: The amount is reasonable The transaction is of a type allowed under clause M5.5 A majority of board members does not receive a benefitThe restriction also applies to close family members and, in respect of remuneration, to companies which employ the board or staff members or volunteers.
For full details http://uk.wikimedia.org/wiki/Conflict_of_Interest_policy

Issues raised by Andrew but not encompassed:

Monthly reports - we were considering having UHY do monthly reports. With a good office person is this really necessary? Andrew I would hope not. No normal in a charity like ours. Jon

Data protection -theft and misuse. Certainly an issue but is it for the financial protocols?

Personal probity - may need more detail on credit checking etc.