ARC minutes 2023-03-09

Thursday 9th March, 5-7 pm (online)

Present: Jane Carlin, Natasha Iles, Marnie Woodward, Adrian Beidas, Lucy Crompton-Reid, Julian Manieson, Sharon Mitcheson, Mark Cruishank, Chuks Ogbonna (minuting).

Apologies: None

Declaration of interests: None

Approval of previous minutes Approved.

MW asked for an update on a proposal from Wikimedia Sweden regarding tools. LCR brought the committee up to date on the status of those discussions. In summary, it was agreed by the chapters involved that a financial request should first be made to WMF.

Update on actions arising at the last meeting

All actions were completed with the exception of making our money work harder for us. LCR noted that SM has been researching various savings accounts where we would get a better return than currently and spreading the risk of holding relatively large amounts of cash in one account.

Action: SM to follow this up with AB, MW and JM.

Financials

QFMR Q4/Year End 2022 - 23 and commentary

SM gave a presentation on the QFMR, noting that we are ending the year in an excellent financial position. Our reserves stand at £352K which is an increase from last year, total cash deposits sit at £815k and turnover is £975k (which is double compared to our turnover in 2016). MW observed that comparing the actuals to the forecast is good but it is also helpful to compare with the original budget, as we are ending the year ahead of the budgeted position by £40k. MW drew attention to funds raised during the year - particularly in unrestricted income - and congratulated the staff team.  

Development Update

NI spoke to her report, which was largely very positive. She noted that we would be exploring reasons for the shortfall in Gift Aid. MW thanked NI for the way in which information about restricted funds was presented in her report and suggested that a similar table could be included in our year-end accounts.

Oral Update on Audit

Sharon updated the committee that there was a meeting with the auditors (PKF) in February and preparations are underway. She added that we have received access to their portals and everything will be done remotely for the audit.

Proposal for Staff Salary Increases

LCR spoke to her paper and presented the proposal for salary uplifts for 2023. These are based on our agreed Remuneration Policy which takes into consideration inflation and affordability. She noted that CPI inflation for 2022 was 10.5% and that staff uplifts were always based on the previous year, as an adjustment for past inflation (rather than looking ahead to predicted inflation). She also noted that anything less than 10.5%, therefore, represented a real term pay cut, but that SMT and MS had agreed on the proposal for 9% and 11% uplifts depending on current pay.

Committee members deliberated on the topic keenly with varying opinions. All committee members supported the differentiated approach outlined by LCR. For JC, the % increases looked a little high, whereas MC was seeing 10% as standard and felt the proposal was reasonable. JM also supported the proposal and noted that replacing staff is often more costly to an organisation than a pay rise. AB added that while inflation may be cooling, it isn’t going backwards and that salaries across the employment market are now seeing adjustments. LCR noted that our 15% uplift from WMF was predicated on a 10% cost of living increase, as well as making the Volunteer Coordinator position permanent. JC asked for more benchmarking information, and there was a discussion about whether this should be in relation to % increases being applied, or individual staff salary levels.

Decision: There was a committee vote, with the majority agreeing to recommend that the board approves the proposed pay raises.

Action: LCR to provide more benchmarking data at the board meeting.

Budget for 2022 - 23

SM presented the budget for the new financial year. She noted that the WMF grant for the year has already been received in full. Small donation income is expected to be £226k, and other grants are expected to be £312k split between restricted and unrestricted.

MW thanked SMT for their work on the budget and mentioned that she would expect to see higher interest income during the year. She also asked about the new CRM, with SM confirming that these costs would be brought to the full board meeting. JM asked about the possible impact of a recession on small donations. LCR responded that our donors have tended to be very loyal, with our small donations income relatively resilient to external pressures. NI added that she monitors income regularly and there are different levers that the team can pull, depending on the particular source of income. JM also asked whether there would be training costs associated with the CRM, and SM responded that these costs have been included. She also noted that she was expecting there to be significant savings in terms of staff time, with a more efficient system.

Board Commentary for Budget

Decision: Members unanimously recommended the 2023-24 budget to the board.

Reserves

LCR introduced the reserves paper and explained that having reviewed the risk-based methodology, it was clear that for 2023-24, because of reduced liabilities (particularly the short amount of time left on our office lease), and the fairly urgent need to mitigate the risk of a bank failing by spreading our cash across different accounts, it made sense to revert to our previous policy of holding between three and six months in operating costs in reserve. Indeed, we are currently holding six months of costs, which is a good position to be in. The Committee agreed with this approach. All agreed that the board should be asked to approve a small change to our policy, which is that the risk-based methodology OR the 3 - 6 months of costs should be applied, depending on which is the largest figure.

Decision: Reserves target approved

Action: LCR to propose a small amendment to the Reserves Policy Statement as outlined above

Oral Update on new Accounting Software move and reasoning

SM told the board that we have moved from Sage to Xero, MW asked about the costs of these and Sharon clarified that Xero is not only cheaper but more intuitive and will make it easier for invoicing amongst other things.

Risk Register

LCR introduced the revised Risk Register, which will also be brought to the full board meeting. She talked through all of the highest risks, including the Online Safety Bill, decreasing visibility or relevance of the Wikimedia projects and inadequate systems for knowledge management.

Oral Report from GovCom

LCR gave an update from GovCom, including a paper from MS on board appraisals, and the timeline for recruiting a new Treasurer and Chair of ARC.

AOB

MW asked for an update from SM on the Lloyds and Unity bank platforms. SM stated that we are moving towards a paperless future with regard to statements.

Meeting dates for next year - please note that some changes may be required to forthcoming meeting dates. LCR and CO will be in touch about this ASAP.