Talk:Finance & Fundraising Policy

November 2012 revisions

The main diff showing the difference between the old policy & the proposed revised version is [1]. There are some additional points specifically discussed at the 18th Nov board meeting I will outline below, and propose wordings for. Community comments are welcomed before this is finally approved.

For convenience let's refer to the changes using these references:

• A) Main diff [2] All the smaller changes.

• B) Donations in kind Currently says "All donations in kind that are greater in value than £1,000 are duly recorded (Administrator)". It doesn't say how. In the published accounts to January 2011 a donation in kind relating to a Jimmy Wales lecture at Bristol was monetized in the accounts, confusing several people when it reappeared in the comparative figures this year. Proposed new text: "All donations in kind that are greater in value than £1,000 are recorded, and disclosed in a note to the audited accounts, but not monetized and included in the main figures, except in exceptional cases. (Administrator)"

Some charities value these, but in our case the main "donation in kind" by far is volunteer time, which would be a nightmare to value, & it would serve no very useful purpose to do so. Other donations are most often of rooms in universities etc, & valuing these has other problems, as many are not actually normally available for rent, and we also give value to the institution concerned, which ought logically to be deducted from any figure.

• C) Depreciation detail

Depreciation policy agreed in A. Further proposed to add: "A full year's depreciation is charged in the year of acquisition, and none in the year of disposal" - this is very normal, & simplifies calculation as well as better reflecting the fall in the value of assets once they are no longer new.

• D) Management letter disclosure

Currently 8.14 reads "Any management letter received from our auditors is published with a response, subject to appropriate redactions in exceptional circumstances (Administrator)". This was not done last year (2011/12 audit) or any previous year AFAIK. It was proposed to remove this completely as:

• 1) The actual letter says the contents are confidential & should not be released without the auditors permission, which, following standard industry practice, they do not want to give
• 2) The standard view in the auditing world, held by UHY our auditors, me as Treasurer, and Garfield Byrd as WMF CFO, is that management letters should be as frank as possible to be useful, & kept private to prevent them becoming a PR football. There are other considerations, such as revealing gaps in internal control, possibly leading to potential fraud etc.

In the 18/11 board discussion, it was proposed to go to: "Any management letter received from our auditors is publically summarized with a response, subject to appropriate redactions in exceptional circumstances (Administrator)". This is, in my view, better, but I can't really imagine what such a summary of these long and very technical documents would look like. I don't know examples of other charities and institutions that do this.

Our last management report, which can be "publically summarized" as "very bad", is a rather special case, as it covers, as is normal, only the period audited, in this case the year to January 2012, when the accounts were being done by the then Hon Treasurer. The office only took over accounting from February 1st, making in effect a completely new start with a new system and new procedures. Last year's management report is therefore of no real relevence to the current accounting system.

• E) Approval of expenditure - section 10. Currently covers board and staff, but not volunteer budget-holders. Wording & limit needed - any suggestions - below please?

• F) Per diem expenses, section 24. Proposed new text. Rates unaffected. There are other versions of this revision at [3] (Fæ's version) and [4] (Mike's previous version).

1. A "per diem" expenses allowance may be paid, if it has been approved in advance by the Office and/or the appropriate budget holder, 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 and internet connections
   3. incidental transport costs (e.g. bus fares, car park charges, short taxi rides) too trivial to submit claims for.
2. A per diem will be paid where the individual is coordinating, facilitating or presenting at Wikimedia events or for those at other events and meetings when acting as the official representative of Wikimedia UK.
3. The nominal amount of the per diem are as follows. These rates apply within the UK and the EU. Rates for other locations may be determined jointly by the Chief Exec and Treasurer to be higher or lower depending on the cost of living in those locations. The per diem rates are reviewed and approved by the Board on an annual basis.
   1. Full day (over 7 hours of activity including travel to and from) with overnight stay: £30 per day
   2. Full day (over 7 hours of activity including travel to and from) without overnight stay: £20 per day
   3. Half day (4-7 hours of activity including travel to and from): £15 per day
4. Where expenses are paid for directly by Wikimedia UK or another party, then the per diem rate will be decreased accordingly by a joint decision by the Chief Exec and Treasurer.
5. Should there be any doubt or disagreement raised in advance of the expense by either party with regards the per diem rate, then the default of requiring receipts for all expenses shall apply.
6. If the per diem rates prove inadequate owing to high local costs then receipts can be submitted for assessment by the office whose decision will be final.
7. These rates are designed to 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 may be altered at the discretion of the Chief Executive and Treasurer.
8. Where any individual claims per diem expenses on a recurring basis, the Chief Executive will review the arrangement to ensure that the chapter is not breaking its obligations under minimum wage legislation.

• G) Payment procedures S.12. Nothing currently re online payments, which are of course the main type we actually use. Suggestions for text welcome below.

As Treasurer Johnbod (talk) 19:13, 23 November 2012 (UTC)

January 2013 changes

Also included is a further amendment in light of a recent review of procurement processes - see here. Richard Symonds (WMUK) (talk) 11:54, 25 January 2013 (UTC)

• The outstanding query points have now been updated, following the discussion at the November Board meeting, & Jon's comments belowwith this diff. I have now included most of the per diem variant wordings from Mike & Faes's drafts, but not two: The board are committed to regular review of the whole Finance Policy, so no need to say so here. Deductions for meals provided seem over-specific.

The Policy should now be final and ready to sign, pending any final queries from the board or the community. Please raise these here. It will be proposed to the board in the February board meeting, and I hope will not need further discussion before approving there.

Two further issues

1) *"Office expenses and the Chief Executive's expenses are published on the public wiki (Administrator)" remains in the text. Is this a good idea? Johnbod (talk) 22:01, 3 February 2013 (UTC)

• • Yes - I'm not sure why this hasn't been happening yet. At the least, we should aim to do what the charity commission does, which is to publish a breakdown of the CE's expenses quarterly. [5] Mike Peel (talk) 10:27, 4 February 2013 (UTC)
  • Yes - I had expected this was already happening. I know my expenses are published on Trustee Expenses 2012-2013, I would be surprised if the board of trustees could justify not holding our full time CEO to the same level of openness and transparency that unpaid volunteer trustees already are. If it has not been done, it needs to be backdated for all expenses through to 2011 when Jon was first employed. Thanks --Fæ (talk) 10:48, 4 February 2013 (UTC)
    • No problems from me - I glory in my austere lifestyle - no mileage claims for my bike! Jon Davies (WMUK) (talk) 14:38, 4 February 2013 (UTC)

This also relates to the on-wiki signature issues, and to some extent to commercial confidentiality, and security (with signatures & bank accounts) for some suppliers. If we keep it in I'd suggest being more specific as to how, certainly specifying that no signatures should be readable on-wiki. Maybe the claims but not the invoices should be shown. Security concerns should apply equally to us and our suppliers. Johnbod (talk) 16:19, 4 February 2013 (UTC)

It doesn't really, as only summaries of the expenses need to be published, as per Trustee Expenses 2012-2013. Thanks. Mike Peel (talk) 20:04, 4 February 2013 (UTC)

Ok, I suggest "in summary form, without displaying signatures" is added. Johnbod (talk) 04:06, 6 February 2013 (UTC)

2) See B) below. At 3:1 we have "All staff involved in finance, and all bank account signatories, will have their credit history checked annually. (Administrator, with Chair/CE reviewing reports)". This involves legal issues & the recent preliminary advice from Jon Warsop of UHY seems rather against it, & suggests we take legal advice first. I don't believe this is common. Johnbod (talk) 16:18, 4 February 2013 (UTC)

Discussion

A

Thanks for doing this John, In general I think our protocls have held up fairly well. In addition to Richard's comments on procurement following the Midas review I have a few other comments that I hope we can tease out over the next week:

• I review the monthly payroll with Richard. Garfield was happy (possibly even impressed) by our systems. He knew of places where Mickey Mouse had been on the payroll for months before anyone noticed.
  • added Johnbod (talk) 20:40, 1 February 2013 (UTC)

The process is that I get the proposed list by email and have to authorise before payments are made.

• London Living wage - I think this should be all staff get a" As a minimum the Living Wage" This would protect everyone and if you are in London that would follow naturally. £7.45 UK £8.55 London at the moment.
  • added Johnbod (talk) 20:40, 1 February 2013 (UTC)
• Budget holders - may have to be completely revised in view of the Governance review.
  • Indeed Johnbod (talk) 20:40, 1 February 2013 (UTC)
• Card Payments - not sure what we are missing here
  • Just a note of who the signatories there, how the procedures work, & who can do what. Note that AFAIK we still lack the single document with details of all signatories on all a/cs (5.5), which this can be a part of. Johnbod (talk) 20:40, 1 February 2013 (UTC)
• Annual credit history checke for staff. I think we need to think hard about this. Firstly this is not in staff contracts and so we would have to negotiate this (I was just saying this to my bookie in Las Vegas last night). Secondly I am not sure what we would achieve as we have the checks and balances to trace every penny. Not like a couple of years ago where someone could make off with the cheque book.
  • That's not in there currently is it? Johnbod (talk) 20:40, 1 February 2013 (UTC)

Jon Davies (WMUK) (talk) 09:45, 1 February 2013 (UTC)

• • Thanks for these - replies above Johnbod (talk) 20:40, 1 February 2013 (UTC)

B

I propose removing the section at 3.1: "All staff involved in finance, and all bank account signatories, will have their credit history checked annually. (Administrator, with Chair/CE reviewing reports)". Our financial controls are already strong enough that this isn't a required safeguard - our current controls are safe enough. In addition, it throws up a myriad of questions about what to do if the credit checks aren't passed (sack the staff? remove the trustee?). Finally, it would affect the credit history of those checked, and thus would require staff to re-agree to new contracts, which entails all sorts of extra risks. Richard Symonds (WMUK) (talk) 14:10, 4 February 2013 (UTC)

Yes, I checked with our accountants and they are very dubious about this and the fact that we would have to get staff to agree to this, something I had already identified. It is not a condition of employment. I have never seen this required before and am not sure why we have it.

This is what Jon Warsop from UHY said: "My concern with the suggestion is the potential employment law impact. We are not authorised to provide employment law advice and you should consult your own legal advisers. Just some initial thoughts:

Whether the employee’s contracts allow for this (if you are wanting to check existing staff). They may need redrafting.

How you would process the data and what you would do if the checks revealed something. It may be not be appropriate (or legal) to dismiss someone purely because they have a poor credit rating. There could be many different reasons for this. The employee would definitely need to be given chance to respond prior to any decisions being made.

Is this type of vetting necessary for all staff? You would probably need to demonstrate that the vetting was applicable to the Job description/ Person Spec.

You should perhaps read the Employment Practices code obtainable from www.ico.gov.uk, which states that checks should not go beyond the checking of information that is sought in the application or supplied later in the recruitment process and includes references. Making enquiries from third parties about the applicant’s background and circumstances should only take place where the nature of the job makes them essential and applicants should be told the exact nature of such vetting.

I know all your dealings with Trustees and staff would be entirely transparent, but I do think you should consult your legal advisor before adopting this as a procedure.

Kind regards

Jon Warsop

Comment above from Jon Davies, unsigned

I agree this should come out. This involves legal issues & the recent preliminary advice from Jon Warsop of UHY seems rather against it, & suggests we take legal advice first. I don't believe this is common. I hadn't spotted it was in before (I hadn't been given the section reference). Johnbod (talk) 16:18, 4 February 2013 (UTC)

Can we go back to the current 'All staff, trustees and budget holders will be checked for criminal activities and credit history. (Administrator)' please? That can (and should) be done once at the time of hire. Thanks. Mike Peel (talk) 19:16, 4 February 2013 (UTC)

Whether you do the credit checks once or annually, the same problems exist. Trustees already make a declaration that they're not bankrupt or otherwise disqualified from being a director, which should be sufficient. You could get staff with financial responsibilities to make the same declaration. Is a member of staff having bounced a cheque really going to mean the charity is at any significantly increased risk? --Tango (talk) 21:08, 4 February 2013 (UTC)

We do need to confirm that the declaration that trustees have made is accurate, though, and we also need to be aware of any similar issues involving staff members. To do otherwise would put the charity at serious reputational risk, and may also cause us significant problems with our banks. Maybe 'credit history' isn't the best phrase here - is there a better one that would cover things like bankruptcy without also including bounced cheques? Thanks. Mike Peel (talk) 21:26, 4 February 2013 (UTC)

See the relevant Charity Commission guidance here. It includes links to websites where you can check insolvencies and disqualifications. --Tango (talk) 00:41, 5 February 2013 (UTC)

We could just change to say that we should follow CC guidance (excluding the bits for charities working with children), but that just covers trustees. The checks they are talking about are all matters of public record (no?) & don't I think raise consent/privacy issues. But they are not the same as what is normally meant by "credit history" & probably less relevant for younger staff, not many of whom will have been disqualified from holding directorships etc etc. Some of this is really outside the Finance Policy & more governance. Johnbod (talk) 02:03, 5 February 2013 (UTC)

Indeed, it's a very small part of credit history, but it's really the only part we need to worry about. It is, indeed, all a matter of public record. You can, for example, see all the details of Mike Peel's bankruptcy here. (That is, of course, Mike John Peel of South Shields, not Mike William Peel of Manchester.) --Tango (talk) 02:18, 5 February 2013 (UTC)

Adopted

This final version was adopted by the board on 9th February 2013. Johnbod (talk) 20:22, 9 February 2013 (UTC)

Expenses

The first bullet point at the top of this page reads:

• * 9 February 2014 - Update; expense procedures split off to a separate document (approved revision)

yet does not include a link to that page. [[Expenses]] redirects here; the "see also" link [[Expense procedures (proposed)]] is red. Is this a money-saving measure? Presumably the new page is the one at Expense procedures? Andy Mabbett (User:Pigsonthewing); Andy's talk; Andy's edits 17:22, 9 March 2014 (UTC)