Finance Policy

From Wikimedia UK
Jump to navigation Jump to search

Purpose

Wikimedia UK is a registered charity and company limited by guarantee.  We are required to maintain accounting records and controls to satisfy the requirements of the Companies Act 2006 and Charities Act 2011.The Board of Directors are additionally the Board of Trustees of the charity, and have a legal duty to safeguard its assets and apply them exclusively to the furtherance of its declared charitable aims and objectives.  They delegate the management of the organisation to the Chief Executive Officer (CEO) who leads the company in strategic, financial, and programming as well as partnership and income generation. The CEO is supported by the Senior Management Team (at the time of writing this consists of a Head of Finance & Operations, Head of Development & Communications, and Director of Programmes & Evaluation), as well as the full staff team to deliver Wikimedia UK’s vision and objectives..


These requirements are expanded by the key principles listed in section 2.

Within this Purpose the Policy may, in exceptional circumstances, be overridden by the CEO by prior agreement with the Chair of Trustees or Treasurer as an emergency decision between Board Meetings. Any such override will be immediately reported by the CEO to the Board.

The CEO and Head of Finance & Operations are responsible for ensuring that the Policy is adhered to, in conjunction with, and subject to the overall legal responsibility of, the board of trustees.

Definitions of Staff Roles:

  1. The CEO is responsible to the Board of Trustees for the management of the company, its staff, resources, and strategic direction of the company.
  2. Head of Finance & Operations is responsible to the CEO for overseeing top level finances for the company including generating the QFMR (Quarterly Financial Management Report), company accounts, and strategic financial reporting. They also ensure that the team and company work within the scope of this policy.
  3. Finance & Operations Coordinator is responsible to the Head of Finance & Operations for day-to-day management of the company’s resources, including ensuring that operations and reporting follow established policies.  They also maintain accurate and timely records for the project’s internal finance systems, including logging payments and invoices received, paying invoices via payment software, and raising invoices.  They will support the Head of Finance & Operations with the monthly reconciliations on XERO software and ensure the annual accounts are filed with the relevant bodies The role also includes general administrative support, including schedules, invoicing, and setting up bank payments.
  4. Budget Holders maintain an overview of their project budgets, working closely with the Head of Finance and Operations.  They prepare project re-forecasting budgets (with the Head of Finance and Operations) with an eye for financial detail to ensure that they are keeping in line with approved project budgets.

Responsibilities

The Trustees of Wikimedia UK have ultimate responsibility for financial decisions taken about the company.  Any Trustee can access all financial records and systems at any time.

The financial management of the company is delegated to the Head of Finance & Operations, overseen by the CEO. The Head of Finance & Operations aims to meet the CEO monthly to discuss financial reports and ensure that the company is financially sound.  The Finance & Operations Coordinator reconciles the banking on a weekly basis.

It is the aim of the organisation to appoint a Treasurer and put an Audit & Risk Committee in place, which is chaired by a member of the Board. The committee consists of the Treasurer, CEO, Head of Finance & Operations, and the Chair of ARC, as well as additional contributors who are appointed by ARC when needed. The Committee meets as required to review accounts, budgets, projections, and procedures. The Committee reports back to the Board through The Treasurer and Minutes of its meetings. The Audit & Risk Committee has responsibility for:

  • Monitoring and reviewing annual and departmental budgets, including performance, against budget and potential recovery of overhead costs
  • Monitoring proper risk assessment process before agreeing activity and appraise viability
  • Ensuring that adequate authorisation procedures are being followed
  • Monitoring funding and performance for any investment of charity funds

The Head of Finance & Operations is responsible for the preparation of detailed budgets and financial reports that are presented to the Trustees at quarterly meetings.  The Management Accounts, including the QFMR Summary, Balance Sheet and departmental budgets, are presented to the Treasurer in advance of the meeting to discuss any issues.  The following papers are presented to the board:

  • Trial Balance as at the last day of the quarter
  • Balance Sheet as at the last day of the quarter
  • Management Accounts (Budget v. Actuals) showing figures at end of quarter with explanations of variance
  • Amended Company Budget projections for the rest of financial year are reviewed following End of Quarter 2 and therefore endorsed by Trustees
  • Company Cash Flow forecast
  • A financial paper highlighting key figures, any areas for concern and outlining possible solutions.

The Head of Finance & Operations is also responsible for overseeing the production of annual accounts and liaising with the auditors.

The Finance & Operations Coordinator is responsible for ensuring that company book-keeping is completed and that all financial records are kept up to date and stored appropriately.

Budget Holders work closely with the Head of Finance & Operations to ensure that project budgets are managed appropriately and that restricted funds are spent in line with projections. The Budget Holders meet with the Head of Finance & Operations monthly to consolidate expenditure for the completed month and reschedule the remaining expenditure as required.

Key Principles

The key principles underlying this Policy are that:

  1. Legal obligations to keep adequate records to be able to prepare, publish and file statutory accounts are satisfied
  2. Assets are safeguarded from undue loss, and from misuse, damage or fraud
  3. Assets are applied to further our Objects in the most effective and efficient way
  4. Finances and assets are administered in a way that identifies and manages risk
  5. Controls in place are proportionate to the risks
  6. The highest standard of record keeping and financial reporting is maintained
  7. Financial reporting is clearly expressed, comprehensive and transparent
  8. Duties are sufficiently segregated to satisfy the demands of charity governance

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. We will apply Charity Commission guidance regarding checks on trustees and members of the senior management team prior to appointment.
  2. Where issues are revealed or disclosed, these will be treated sensitively and discreetly, having due regard for the privacy of the individual but ensuring that chapters' assets are not put at undue risk.
  3. Compliance with the Conflict of Interest policy will be monitored at least annually.  

Charity Budget & Management Accounts

The Head of Finance & Operations and Finance & Operations Coordinator work together with Budget Holders to prepare individual departmental budgets for the organisation. This contributes to an annual budget for the organisation, to be signed off by the CEO.  This will then be sent for agreement by the Trustees prior to the start of the financial year (1st February).

The following timetable is followed:

  • A first draft budget is prepared by the Head of Finance & Operations during the 3rd quarter of the financial year.
  • The draft budget for the year is presented to the Trustees in the September board meeting for adoption in February.  
  • At Quarter 2, an amended forecast is presented to the Trustees for information.

The budgeting process must include the following provisions:

  • A target for unrestricted funding sufficient to meet anticipated costs including contingencies for issues such as delayed payments of grants and funding, a minimum of 10% of any project costs
  • Staff pension, NI and PAYE contributions  
  • Potential disruption to the operation of the charity through change of office location

Budgeting

The Board shall agree an annual budget, where possible before the start of the financial year to which it relates to give effect to the operational plan agreed for the year.  Information shall be collected as is necessary to prepare a budget on a direct costs and an absorbed costs basis by the start of each financial year.

The annual budget shall include a projection of income and the reserves position at the end of the forthcoming financial year.  The annual budget and projection of income shall be reviewed by the Audit and Risk Committee (ARC) before presentation to the Board for their agreement.

The agreed annual budget shall be re-forecast if in the opinion of the Chief Executive there is a material change that warrants it and in that event the reforecast budget shall be reviewed and approved by ARC and the Board at their next scheduled meetings.

Audit

Accounts shall be prepared annually and audited by registered auditors appointed by the company at the previous Annual General Meeting. Where allowed by charity law the Board may, at its discretion, opt for the statutory accounts to be independently examined instead of audit and references to audited accounts in this policy shall be read to include that option.  The Board shall consider the reasonable requirements of major donors or grantors when exercising this option.

End of Year Procedure

The Finance & Operations Coordinator works to compile lists of accruals and prepayments for the auditors and is responsible for ensuring that all submissions are made to the HMRC on time and for issuing P60s to all staff members.  

The Head of Finance & Operations compiles a detailed report showing which restricted funds are to be carried forward to the next financial year. If they have not been spent the balance remains in the account as a restricted fund.  This should be approved by the CEO prior to sending it to the auditors.

The Head of Finance & Operations also compiles information that represents income and expenditure between different funding streams and a comparison between projects within the company. Copies of all financial information are supplied to the auditors for them to compile the audited accounts.

Audit Checklist

The Finance & Operations Coordinator is responsible for compiling all information needed for the audit of the Charity company accounts.  This includes:

  1. Giving the auditors access to XERO
  2. Compiling board meeting minutes and AGM minutes for the year
  3. Compiling company management accounts, including all project budgets and re-forecasts
  4. All bank statements for the year

Banking

  1. All bank accounts will be held in the name of Wikimedia UK
  2. No account will be opened or closed in the name of the charity without Board authorisation (except that an account that is in the view of ARC redundant may be closed and noted at the next Board meeting).
  3. Signatories on all bank accounts and electronic banking powers shall be decided by Board resolution.
  4. Bank payments or other written instructions require at least two signatories except as described in paragraphs 5 to 8.
  5. Electronic banking payments will be set-up online and authorised in accordance with the Scheme of Delegation concerning small or recurring payments.
  6. The Treasurer shall act as the administrator of the electronic banking system.
  7. The CEO will be a main mandate signatory and can be a signatory to current and deposit accounts
  8. No signatory or authoriser may authorise payments to themselves as a sole authoriser.
  9. The credit rating, charges and interest of all banks used shall be reviewed at least annually.
  10. Bank reconciliations are to be prepared monthly for all accounts including credit, debit or any other type of payment card. These shall be reviewed by the Chief Executive, who may delegate this task to the Director of Finance and Operations.
  11. All transactions shall be recorded in accordance with standard accountancy practice using software approved by ARC that allows accounts to be produced readily that comply with the requirements of the Charities Statement of Recommended Practice: SORP(FRS102)
  12. If so specified by a grantor and agreed by the Board income shall be treated as a discrete (restricted) fund and expenditure shall record the fund from which it is made.
  13. Money held with any single financial institution or group should be no more than the current Government guarantee limit unless specifically authorised.
  14. Choice of deposit accounts will take account of credit worthiness, qualification for the government guarantee scheme (ie UK banks only) and interest rates.
  15. Adequate training (in house or otherwise) is to be provided to all involved in online financial transactions.  

Assets

  1. A Register of Fixed Assets shall be maintained listing all assets at or above a value determined from time to time by ARC.  
  2. All physical assets shall be physically verified at least once a year or more frequently where the Head of Finance & Operations considers it appropriate.
  3. All assets shall be appropriately safeguarded from loss or damage
  4. Adequate insurance cover shall be maintained to protect against any substantial loss.

Wages and Salaries

Wikimedia UK employees are paid on the 28th of each month (or the last working day before this if it falls on a weekend or bank holiday).  The payroll is produced by the Head of Finance & Operations and sent for approval to the CEO in advance of this date. Once approved, this goes to PayPlus Ltd for payroll to be run and produced.

Approval for payroll:

  • Head of Finance & Operations drafts the Payroll Notes and summary and sends to the CEO for approval.
  • CEO receives payroll summary by email, reviews, and signs off.
  • Approved payroll summary is sent to PayPlus Ltd to be run.
  • All payroll documents sent back to the Head of Finance & Operations for double checking and approval.
  • Finance & Operations Coordinator sets up payroll in Unity Trust Bank ahead of the payroll date, including journals in Xero.

PAYE Management

PAYE payments must be received by the HMRC by the 15th day of the following month. The Finance & Operations Coordinator is responsible for ensuring that all PAYE payments and submissions are kept up to date.  

Pensions

If staff are eligible, they will be auto-enrolled onto a pension scheme (Scottish Widows), in accordance with the Company’s pension auto-enrolment obligations.

Full details of the scheme are provided to staff when they enrol, including the minimum contribution level that they will be required to make, the contributions that will be made by Wikimedia UK, and their right to opt out if they do not want to join the scheme. While participating in the scheme, staff agree to worker pension contributions being deducted from their salary.

The scheme is subject to its rules as may be amended from time to time, and Wikimedia UK may replace the scheme with another pension scheme at any time.

Reporting (internally and externally)

  1. A Quarterly Financial Management Report (QFMR) approved by ARC shall be presented at each Board meeting held more than one month after a quarter end (April, July, October, January).
  2. Audited annual accounts shall be filed with the Charity Commission, Companies House, the Wikimedia Foundation and published to members as required.

Authorisation of expenditure

Clear and public authority levels are agreed as set out in the scheme of delegation.

All expenditure from any source shall be pre-authorised by a budget holder.

Payments

Secure procedures will be agreed for any payment working within the bank's system procedures to ensure separation of duties, and authorisation at the appropriate levels. Payments are set up by the F&O Coordinator and approved by the Head of Finance & Operations. Payments over £1,000 are additionally approved by a member of SMT and anything over £20,000 are additionally approved by a Trustee.

All payments shall be by electronic transfer unless agreed by the CEO

Company Cards

Staff or trustees may be provided a credit or debit card if a clear need can be demonstrated, after approval by ARC

  1. Provision of a card can be withdrawn by the Board, ARC or by the CEO at any time
  2. 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 of the card/expenditure.
  3. If a card user ceases in their role with the chapter, their cards will be cancelled and destroyed
  4. All statements will be sent directly to the offices of Wikimedia UK
  5. All expenses incurred using a card must be authorised by a budget holder and signed off by the user's line manager
  6. All card use must be supported by appropriate receipts etc.
  7. There will be an annual review of card use to ensure proper practice.

FUNDRAISING

Our commitment is to be a responsible and ethical organisation communicating in a way that is truthful and open when we take part in fundraising for the business. Below, ‘donors’ refers to philanthropic sources including individual donors, trusts, foundations and grant-making organisations, and ‘sponsor’ refers to commercial and transactional relationships with organisations.

As a UK charity (charity number 1144513), Wikimedia UK depends on support from a range of sources to underpin our activities. Without the support of our donors, we simply could not continue to run all our programmes. All contributions mean a great deal to Wikimedia UK.

Commitment to our donors and sponsors

Wikimedia UK values support from a variety of sources. All donors are entitled to know how we use their donations to fund our work and we provide regular updates on how their contributions are enabling our charitable activities. We will not provide donors’ personal details to third parties without express permission.

We encourage relationships with organisations that share or aspire to Wikimedia UK’s vision and values. Potential partnerships will be assessed with the following factors in mind:

  • Shared values
  • A commitment to Wikimedia UK’s strategic aims
  • Wikimedia UK’s integrity and ongoing reputation
  • Fundraised income and expenditure will be monitored and reported in the published accounts each year.

Wikimedia UK considers the ethical implications of accepting gifts and in some cases, we may decline a donor or sponsor contribution, if;

  • The aims of the donor or sponsor are directly opposed to those of Wikimedia UK.
  • The donor or sponsor expects Wikimedia UK to deliver benefits that are unachievable or will reduce the charity’s ability to create access for our audiences and participants.
  • Receipt of the donation or sponsorship may have a negative effect on Wikimedia UK’s reputation and/or lead to a decline in support of the organisation by other parties.

Wikimedia UK will engage in due diligence to determine the source of any major donation from an anonymous source. This will be undertaken prior to accepting the donation wherever possible. When this is not possible the donation may be returned to the donor where is has been deemed that the donor does not meet our gift acceptance criteria as outlined above.

Vulnerable people

Wikimedia UK will make every reasonable effort to protect potentially vulnerable people who come into contact with us about giving. The interests of vulnerable people will be prioritised over and above the securing of a donation. Awareness of the needs of vulnerable people is considered in the planning and implementation of campaigns as well as in everyday fundraising interactions.

Wikimedia UK will comply with the Institute of Fundraising’s four key principles of FAIRNESS, RESPECT, RESPONSIVE and ACCOUNTABLE in our interactions with all prospective and current donors.

How we make Decisions

If there is an issue of concern regarding the acceptance of a gift or sponsorship, Wikimedia UK’s Senior Management Team will contact the Board of Trustees. All final decisions will be governed by the Board of Trustees. It is the duty of the Board to advise of any potential conflicts of interest with regards to funding or partnerships.

You will find additional information in our Grants Acceptance Policy

Investment Policy

PURPOSE AND SCOPE

To set out the processes by which Wikimedia UK can invest funds surplus to day-to-day operational requirements and to ensure that investment risk is properly and prudently managed.  In doing so, Trustees must:  

  • Act within their charity’s power to invest
  • Set investment objectives
  • Set the parameters that deposit counterparties need to meet
  • Consider the level of liquid cash required to be held either overnight or within current accounts
  • Approve the type of products that the charity can invest in and seek external guidance if required  
  • Define processes to manage and make investment decisions  
  • Monitor and review investments on a regular basis

RESPONSIBILITY

The Audit & Risk Committee delegates the day-to-day responsibility of managing and implementing the investment policy to the Head of Finance & Operations to ensure investments are managed in accordance with this Policy and monitor regularly how the charity’s investments are performing.

Objectives

The charity’s overall investment objective is to preserve and grow capital in real terms and to generate returns that support the activities of the charity.  The charity seeks to produce a suitable financial return within an acceptable level of risk.   Any investment decisions must be supported by a cashflow forecast that clearly demonstrates that the charity is left with sufficient liquidity to carry out its daily activities.

Counterparty risk

The charity will only deposit its money with a trustworthy provider.  The charity will only use banking providers that are authorised by a relevant financial regulator such as the Financial Conduct Authority, the Prudential Regulation Authority or a relevant financial regulator in any other country.    

Counterparty limits

The charity uses Fitch Ratings to look at both the Credit Rating and Financial Implied Credit Scores.  The Credit Rating or Financial Implied Credit Score will be checked before each deposit placement or roll-over.


Any accrued interest is in addition to / inclusive within these maxima.

Assessing liquidity needs

The Head of Finance & Operations should ensure that a sufficient balance is held across accounts with instant access so that the charity’s financial commitments can be met without the risk of the current account going overdrawn.  A contingency amount should also be considered to give flexibility to cover any reasonable one-off events.  

If interest rates are not competitive on the current account or by using a sweep facility, the Head of Finance & Operations can consider placing some of the surplus cashflow funds into an appropriate instant access/easy access deposit account providing cleared funds can be repatriated within a short period of time.

The charity’s cashflow forecasts will dictate how much is available for investment and for how long.   The cashflow forecasts should be reviewed monthly as part of the management accounts cycle and on maturity of fixed term deposits.

Investment products

Any monies held in a savings or deposit account qualify as investments.  The charity can invest surplus funds in a mixture of interest-bearing accounts and money market facilities (where the capital is not placed at risk) including:

  • Overnight (instant access / easy access)
  • Notice accounts (typically ranging between 30 days up to 365 days)
  • Fixed term deposits (decide if you want the ability to go beyond 12 months)
  • Investments should not exceed 1 year in term.

Investment decisions

The Head of Finance & Operations is responsible for producing reliable cash flow forecasts as a basis for decision making.

The Head of Finance & Operations is responsible for making investment decisions that comply with this Policy.  The opening or closing of bank accounts should be authorised in line with the current Financial Regulations.  

Monitoring & Reporting  

The Head of Finance & Operations will report investments held and the performance of investments against objectives to the Audit & Risk Committee for review each time it meets or when requested to do so. The reporting should include:

  • Funds invested and the tenor.
  • Maturity dates / Notice maturity dates
  • Interest rates
  • Current market rates
  • Blended returns achieved against expected performance and policy benchmarks.  
  • Recommendations for the next 3 months.

Risk Management Policy

The Trustees have assessed the major financial and reputational risks to which the charity is exposed and are satisfied that there are systems in place to mitigate exposure to the major risks. Trustees review risk at each quarterly meeting, examining cash flow and any reputational risks due to high-profile events that Wikimedia UK is leading on.


Date Created:

Date Reviewed:

Date Approved:

Next Date of Approval:

See also

Notes