Finance & Fundraising Policy/2012

This is a draft for comment, which will be proposed for adoption by the Board on 3 January. Items are in { } where different options are under discussion

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, the Wikimedia community and the Wikimedia Foundation. This is also a vital part of attainment of our PQASSO accreditation.

This policy reflects two major developments in the chapter's organisational structure, 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 for different activity areas, projects and grants. The staff then administer the spending and the reporting against budgets, with the Treasurer having responsibility for ensuring appropriate expenditure, reporting and auditing. Volunteers receive support through the expeditious payment of expenses against activity budgets, and grants as 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 included in the Chief Executive's report to each Board meeting following the effective date.

The policy may, in exceptional circumstances, be overriden with the approval of the Chief Executive. Any such override will be immediately reported by the Chief Executive to the Board.

The points of each policy area are given below, with the responsible role for ensuring that the policy is adhered to given in brackets.

Key Principles

The key principles underlying this policy are:

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

Policy

Personal integrity

Effective financial controls rely on the personal integrity of all the people involved - including those making payments, claiming for reimbursement, authorising, monitoring or controlling budgets.

1. All staff, trustees and budget holders will be checked for criminal activities and credit history. (Administrator)
2. Where issues are revealed or disclosed, these will be treated sensitively and discretely, having due regard for the privacy of the individual but ensuring that chapters' assets are not put at risk (CE)
3. Compliance with the Conflict of Interest policy will be monitored at least annually (Administrator)

Income

1. Post is held securely before collection (CE)
2. Post is opened in the presence of two 'unrelated individuals' (i.e. people that are not close relatives by blood or marriage and are not living as part of the same household) with rotating staff where practical. (CE)
3. All cheques and cash received held in strong box or safe prior to banking (Administrator)
4. All cheques and cash received recorded in a register (Administrator)
5. Cash received as recorded in the register is reconciled against paying in slips and bank statements at least monthly (Administrator with CE or Treasurer).
6. Accurate Gift Aid records are kept and timely returns made. (Administrator)
7. Regular spot checks are to be undertaken to ensure that Gift Aid declarations and claims are accurate. (Administrator with CE or Treasurer)
8. Spot checks are to be undertaken to ensure that Gift Aid payments received. (Administrator with CE or Treasurer)
9. Appropriate controls are put in place for any Trading Income (CE)
10. All donations in kind that are greater in value than £1,000 are duly recorded (Administrator)
11. All donations received in cash, cheque, bank transfer, Paypal, text, direct debit or other fundraising mechanism are to be promptly thanked and recorded (Administrator)
12. All donor communication is prompt enough, at a minimum, to comply with the Fundraising Agreement (Administrator)

[Does this refer to email queries received from donors, or other communication? Mike Peel 21:19, 29 December 2011 (UTC)] [We could just apply it to ALL communications? Jon Davies WMUK 11:19, 30 December 2011 (UTC)] [Is all communication relevant to a Finance Policy? I suggest we keep this specific clause to communication relating to actual or potential donations AndrewRT]

1. All direct debit instructions are processed in compliance with the Direct Debit regulations (Administrator)
2. Where restricted donations are received, records are kept of the restriction and their own budget lines will be maintained within the accounting records.
3. Adequate monitoring is undertaken to ensure there is no abuse of public collections or fundraising events (CE)
4. All donor data is encrypted and password protected (Administrator)

Banking

1. All bank accounts will be held in the name of Wiki UK Ltd (Administrator)
2. No account will be opened or closed without Board authorisation (Administrator)
3. Bank payments (cheque or BACS) require two signatories (Administrator)
4. Signatories on all bank accounts shall be decided by Board resolution (Administrator)
5. No third party shall be allowed to open accounts in our name. (CE)
6. The credit rating, charges and interest of all banks used shall be reviewed at least annually. (Administrator and Treasurer reporting to the Board)
7. Bank reconciliations are prepared monthly for all accounts. (Administrator reporting to Treasurer; all discrepancies reported to CE and Board)
8. Accounting records clearly record all interest receipts. (Administrator)
9. A record is kept of all cheques written (Administrator & Signatories)
10. After each electronic banking transaction a print out is taken showing details of that transaction and stored as part of the accounting records. (Administrator)
11. Paper copies of all bank statements are retained, and digital copies made available to the Board. (Administrator)
12. A reserve policy is adopted each year as part of the annual budget (Treasurer)
13. The balance of the current account is kept to a minimum, havign regard for forecast cashflow requirements. Surplus cash is invested in deposit accounts (Administrator)
14. Choice of deposit accounts will take account of credit worthiness, deposit insurance and interest rate and will ensure that the failure of one investment or institution would not have a major impact on the chapter. (Administrator reporting through the Treasurer to the Board)
15. Records of all deposits made are maintained with regularly public reports (Administrator)
16. The signatories to the current account are not also signatories to deposit accounts (Administrator)
17. All PCs with banking access be password protected. (Administrator)
18. All passwords are kept secret. (Administrator and all users)
19. All passwords are changed regularly and always following changes in authorised staff and trustees. (Administrator and all users)
20. Adequate training is provided to all involved in on-line financial transactions. (CE)
21. Emails are avoided when communicating bank details to avoid disclosure of sensitive information (Administrator)

(Needs expansion as to who will be signatories on bank accounts. Mike Peel 21:19, 29 December 2011 (UTC)) This will depend on which accounts. We will be moving to dual signatory for day to day business with CE plus a trustee or two trustees, especially when payments being made to CE. I am hoping for a split of A and B signatories. A (CE plus two or more trustees) for current account business and B (Three other trustees)with the power to transfer out of the Deposit and Savings accounts. This means no one person can have control of significant funds. In practice slightly more complicated as we have accounts with different banks and they all have slightly different rules. By Feb 1 should be 70% sorted. Jon Davies WMUK 11:19, 30 December 2011 (UTC) (For the purpose of this policy, I've suggested #3 above as in practice we will have different signatories for different accounts and will want to have the flexibility to change them easily, for instance, when a new Treasurer takes office. AndrewRT)

Assets

1. Any individual item valued at over £100 is recorded in the fixed asset register listing their purchase price, purchase date, description, any identifying marks and location. (Administrator)
2. All assets are safeguarded from loss or damage (CE)
3. Adequate insurance cover is maintained to protect against any substantial loss. (CE with Administrator)

Donations

1. Donations to the Wikimedia Foundation are made in line with the advice of our lawyers (Treasurer)
2. Individual transfers are agreed by the Board on the advice of the Treasurer (Treasurer)

Wages and Salaries

1. Full records of all payroll payments and deductions will be maintained. (Our agency monitored by Administrator)
2. Payroll records will be held separately from Human Resources files (Administrator)
3. Statutory deductions will be paid to HMRC monthly (Our agency monitored by Administrator)
4. Year end payroll declarations completed, P35, P11D and P60's (Our agency monitored by Administrator)
5. Minimum wage legislation adhered to. (Our agency monitored by Administrator. Trustees to oversee.)
6. No unauthorised deductions will be taken from pay (Our agency monitored by Administrator)
7. All employees have a proper contract of employment. (CE with board support)
8. A stakeholder pension scheme is provided for staff to opt in to, the employer contribution to which will be 6 per cent of the employee's salary (CE)
9. Procedures are in place to record starters, leavers, changes in salary, overtime, sickness, maternity etc. (Our agency monitored by Administrator)
10. Annual appraisal and salary review will be based on RPI, performance and market forces (CE or, in the case of the CE, the Board)

Reporting

1. It is a condition of receipt of expenses that all expenses are published on an appropriate wiki so that the highest standards of transparency are maintained
   1. Individual expense claims are normally published on the office wiki (Administrator)
   2. Office expenses and the Chief Executive's expenses are published on the public wiki (Administrator)
2. Income and expenditure is regularly monitored against budget. (Administrator)
3. Monitoring to 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. (Administrator)
4. Monthly financial reports to be published on the public wiki (Administrator)
5. Budget holders notify responsible staff of detailed plans and budgets (Budget holders)
6. Processing of budget line expenses is the responsibility of staff with regular reporting to the budget holder and the Board. (Staff)
7. Accounting records in line with good Charity Commission practice and our accountant's advice are kept to show all transactions. (Staff)
8. Annual accounts are prepared in line with SORP (Statement Of Recommended Practice) (Accountants & Administrator)
9. Annual accounts are presented to the AGM for approval and published on the public wiki (Administrator)
10. Annual accounts are provided to the Charity Commission, Companies House and the Wikimedia Foundation as required. (Administrator)

Grants

The process for grants is incorporated into this policy.

Payments

1. Clear and public authority levels are agreed by the Board for purchases and payments (within budget lines) as follows: (CE)
   1. Chief Executive: £10,000
   2. Other staff: £250
2. All orders placed are within an agreed spending plan or budget. (Individual)
3. Any additional spending to be authorised by CE and Treasurer or Board as appropriate. (Individual)

(how will the appropriate authoriser be determined?)

Procurement

1. All purchasing must be considered in terms of 'value for money' including:
   1. Whether the suppliers are reliable and reputable (Budget Holders)
   2. Whether the costs, measured against similar suppliers, are reasonable (Budget Holders)
2. The purchase of any equipment or service over £1,000 must show evidence of comparative quotes having been sought. When the lowest quote is not chosen reasonable arguments must be put forward for this decision. (Budget Holders)
3. We shall endeavour to source local, environmentally friendly and sustainable suppliers where this is possible and does not conflict with another priority (Budget Holders)
4. All procurement shall be subject to our Conflict of Interest policy (Budget Holders)
5. We will take regular advice from accountants in order to avoid any unnecessary VAT obligations (CE)
6. All invoices are checked against goods or services received. (Administrator)
7. All invoices are to be paid within the agreed terms unless disputed (Administrator)

Cheque payments

Secure procedures will be instituted for any payment by cheque including:

1. Cheques must only be written in presence of documentation supporting the request for the cheque (Signatories)
2. No pre-signed cheques may be provided (Signatories)
3. Chequebooks kept in secure locked place (Administrator)

Card payments

1. Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after after approval by the board (Administrator)
2. Provision of a card is considered an exceptional priviledge that can be withdrawn by the Board (or, in a emergency, by the Chief Executive) at any time (Card users)
3. Individuals receiving a Wikimedia UK card shall agree to a deduction from their salary or other amounts owed to them in the event of improper use (Card users)
4. If a card users ceases in their role with the chapter their cards will be destroyed or cancelled (Administrator)
5. All statements will be sent directly to the offices of Wikimedia UK (Administrator)
6. All expenses incurred using a card must go through the usual authorisation processes (Card users)
7. There will be a periodic review of card use to ensure proper practice. (Administrator and Treasurer)

Regular bank payments

1. There will be a quarterly review to ensure no redundant regular payments (standing orders or direct debits) are being made. (Administrator)

Cash payments

1. Cash payments should generally be kept to a minimum, balancing the risks to the chapter against the convenience for individuals. (Administrator)
2. A petty cash system with a float of normally £250 will be maintained.(Administrator)
3. Recipients sign for all payments received. (Administrator)
4. The petty cash book recorded a running balance of Petty Cash (Administrator)
5. The petty cash log sheets will be published on the office wiki monthly (Administrator)
6. Regular spot checks of Petty Cash are undertaken by a third party (CE)

Reimbursement of Expenses

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

1. Travel by private motor vehicle will be reimbursed 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.
2. An additional 5p per person per mile may be claimed when carrying passengers who are also on WMUK business.
3. 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.
4. Toll charges where unavoidable will be reimbursed.
5. Vehicle HMRC rates per mile are as follows:
   1. Up to 10,000 miles over the course of a financial year (up to 150 miles per trip): Cars 45p/mile, Motorbikes 24p/mile, Cycles 20p/mile
   2. Over 10,000 miles in a single financial year (or mileage over 150 miles per trip): Cars 25p/mile, Motorbikes 24p/mile, Cycles 20p/mile

Car rental

1. Vehicle rental may be approved in advance where necessary on a case-by-case basis, but would not be reimbursed on a routine basis.
2. 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.

Insurance

1. WKUK Staff and trustees will be covered by the WMUK travel insurance policy (Administrator)
2. Pre-existing illnesses need to be reported to the insurance cover before travel (Staff and trustees)
3. Otherwise WMUK expects, and encourages, all individuals traveling on WMUK business to have obtained the appropriate travel insurance, and will reimburse the cost of this insurance.
4. WMUK will not normally reimburse expenses and liabilities incurred that would otherwise have been covered by such insurance.

Accompanying Guardians

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.