Finance & Fundraising Policy/2012

Financial protocols and regulations for Wikimedia UK

For agreement January 3rd Board Meeting For implementation.

Introduction for Board.

The policy reflects two major changes. Firstly the adoption of charity status with its duties and responsibility and secondly the appointment of full time staff. The aim, apart from fulfilling our statutory obligations, is to create a system where the board agree the annual plan with financial allocations. The staff then manage the spending on the plan and the monitoring of the budgets. Volunteers will receive support through the expeditious payment of expenses and grants agreed by the board. These protocols will not be set in stone but offer scalability as a starting point for a chapter that will inevitable develop over the next few years. As a registered Charity, and a very public one at that, it is imperative that we institute financial protocols and regulations that satisfy the needs of The Charity Commission, our community and the Wikimedia Foundation.

Below I try and bring together best practice with what already exists within Wikimedia UK to create a robust framework that will be practical, proportional and secure. I have used Charity commission guidance and had discussions with Jon Worsop at UHY Nottingham, our current accountants, as well as a meeting with their head office.

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The policy.

Key Principles 1. That the Charity's assets are safeguarded.

2. That the Charity's finances and assets are administered in a way that identifies and manages risk.

3. That the quality of financial reporting, record keeping and financial information is high, clearly expressed and transparent.

4. That the controls in place are proportionate to the risks.

5. That duties are sufficiently segregated amongst paid staff and trustees in order not to overburden any individual or allow an excessive concentration of authority.

6. That maximum transparency is maintained in all financial matters.

7. That Financial details are published on wiki pages for the Wikimedia UK community to see.

8. That these protocols assist the work of volunteers in delivering the Wikimedia UK mission.

Reporting

That the charity's financial performance is regularly monitored against budget.

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.

That there be regular reviews of income and expected income.

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 Board.

That we report quarterly to the Foundation in parallel with the board meeting our financial position against budget in line with best SORP practice.

Accounting

That sufficient accounting procedures in line with good Charity Commission practice and our accountant's advice are kept to show all transactions.

That annual reports in line with SORP (Statement Of Recommended Practice) are published. Restricted grants will be identified as such and have their own costs centres within the accounts.

That donations 'in kind' will be recorded and registered in the accounts.

External scrutiny of accounts.

That accounts are filed with the Charity Commission. and Companies House as necessary.

That we meet any request from public for annual reports promptly in addition to publishing on our Wikipages.

Criminal financial abuse

Abuse of public collections and fundraising events – need to be monitored. All data to be password protected

Income received in the post

Post should be held securely before collection.

Income logs kept and reconciled against bank payments.

Gift Aid

Accurate records and timely returns to ensure prompt recovery.

Spot checks to ensure amounts claimed.

Spot checks to ensure payments received.

Trading income

We take professional advice as necessary.

VAT

That we take regular advice from accountants in order to avoid any unnecessary VAT obligations.

Banking

All cheques pending cashing to be held in strong box or safe.

All cheques and cash in recorded in register.

Cheques and cash reconciled with paying-in slips

Paying-in slips reconcile with bank statements Insurance cover in place to cover cash in hand etc.

That clear and public authority levels are established for purchases and payments on behalf of the Charity (not expenses).

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.

That all invoices are checked against goods or services received.

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

Other staff - Up to £250 Petty Cash – Up to £200 float in office with log sheets – transferred to spreadsheets monthly.

Larger amounts or special payments outside budget heads.

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.

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?

We shall endeavour to source local, environmentally friendly and sustainable suppliers wherever possible.

Contractors, e.g. developers or lawyers, when costing more that £1000, 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 but should be reported ti the CE.

All procurement shall be subject to our Conflict of Interest policy.

Grants

We will use our current procedures to ensure that all grants payments are made legitimately and used appropriately.

We will use our current grant making policy in setting out conditions and any restrictions applying to grants awarded.

We will use our current procedures for the review and approval of grant applications published with appropriate controls on integrity of individuals instituted.

Payments by cheque

That secure procedures are instituted for any payment by cheque I.e.

1. Two signatories

2. Only in presence of documentation supporting the request for the cheque

3. No pre-signed cheques

4. Separate record of all cheques, their numbers and details kept

5. Chequebooks kept in secure locked place

There will be a monthly review of bank statements against cheques.

Payments by debit card, credit card and charge cards.

The CE will have a card to undertake 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.

All payments to be validated.

Staff, trustees or volunteers using a Wikimedia UK credit card shall agree to a deduction from their salary in the event 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.

All cards to be destroyed or cancelled if the individuals ceases to work for or be a trustee of Wikimedia UK.

Copies of all statements to be sent directly to the offices of Wikimedia UK.

Periodic review of card use to ensure proper practice.

Payments by direct debit, standing orders and BACS

In 2012 we undertake to move to a banking system with dual signature BACS payment authorisation system.

Direct debits. There will be a quarterly review to ensure no redundant payments being made.

Standing orders.

There will be a quarterly review to ensure no redundant payments being made.

Electronic banking No single person shall have control of substantial resources.

That BACS payments be subject to two electronic signatories. After each electronic banking transaction a print out should be taken showing details of that transaction and stored as part of the accounting records.

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 £250 be maintained.

Recipients to sign for all payments received.

All payments entered in book and signed for.

Running balance of Petty Cash kept.

Regular spot checks of Petty Cash made by third party.

Per Diems will normally be paid by BACS not Petty Cash.

Wages and Salaries

That full records of all payments and deductions are maintained

Statutory deductions paid to HMRC monthly

Year end declarations completed, P35, P11D and P60's

Minimum wage legislation adhered to and for London employees the London Living Wage, (Currently £8.30 in 2012.)

No unauthorised deductions taken from pay

All employees have a proper contract of employment.

Legal options in respect of pension schemes met.

Pay records to be held separately from HR files

Procedures in place to record starters, leavers, changes in salary, overtime, sickness, maternity etc. System of appraising salaries in place. CE to make recommendation based on RPI, performance and market forces.

Expenses - background

The Charity Commission states: It is important that controls over expense payments are applied without exception to all those involved with the charity: trustees, staff and volunteers.

This policy sets out a definition of legitimate expenses and a tariff that will be subject to review by the board.

The policy sets out the requirement for the provision of properly identified claims and original receipts. If necessary credit card or bank statements may be acceptable Our process of claiming expenses ensures ease of use particularly for volunteers.

The policy is included in all induction training.

No expenses claim can be authorised by the claimant and must be checked for accuracy and the correct associated paperwork 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).

All expenses (excepting small petty cash claims) to be paid by BACS within a week of approval.

All expenses to be published on the appropriate Wiki Any mileage claims should be paid as per the HMRC agreed rates.

Except in circumstances where 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.

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

WKUK Staff and trustees are covered by the WMUK travel insurance policy.

Pre-existing illnesses need to be reported to the insurance cover before travel.

Otherwise 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 within reasonable distance of the venue they are attending.

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:

1. 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)

2. costs of phone calls.

3. 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.

£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

1. Registration costs for conferences

2. Meeting rooms, catering and other corresponding costs for WMUK and WMUK-related events

3. Long-duration car parking expenses where necessary

4. Publicity material, such as badges, T-shirts and printed materials, and corresponding postage costs, where that material is not stocked by the WMUK office

5. Phone calls to participate in meetings remotely

6. 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

1. Childcare or other costs of caring for dependent individuals whilst on WMUK business.

2. 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.

Records of expenditure

All records of expenditure must be checked regularly and reconciled against bank statements, petty cash records, cheque stubs etc.

Spot checks will be made to match invoices and expenses claims against payments should be made

Standing orders, DD to be regularly reviewed Any restricted funds i.e. donated for a specific purpose have been directed towards that purpose.

Assets

That the assets of Wikimedia UK are safeguarded from loss or damage That any individual item over £100 is listed as a capital asset.

That a fixed asset register is maintained listing all the assets, their purchase price, purchase date, description, any identifying marks and location. That adequate insurance cover is maintained to protect against any loss.

Investments

In line with Charity Commission advice WMUK recognises that it is likely that 'some funds will be retained within the context of a reserves policy and will be appropriately invested.

The Board will 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.

That a level of reserves is agreed from time to time depending on circumstances.

That records of all investments held are maintained and reported regularly to the board and the Wikipedian community.

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 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.

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.

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.

Conflict of Interest

No board or staff member or volunteer may:

1. Buy from

2. Sell to

3. Be employed by, or

4. Receive financial benefit from the chapter unless:

5. The amount is reasonable

6. The transaction is of a type allowed under clause M5.5

7. 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