BAVO


8. Managing money

8.1 Setting up a financial system

The voluntary management committee must ensure that proper accounts are kept which comply with all the relevant statutes and regulations – of which there a number.

Setting up a financial system

Sefydlu system ariannol


8.2 Setting up a budget

A budget is a plan translated into money-terms for a defined period of time, usually 12 months from April to March or January to December. The voluntary management committee is guided by the Treasurer and the Finance sub-committee (if there is one) and has the responsibility of agreeing the budget for the organisation.

Setting a budget

Sefydlu cyllideb


8.3 Full cost recovery

Under full cost recovery, organisations and their funders ensure that the price of contracts and grants reflects the full cost of delivery, including the legitimate portion of overhead costs. This commitment poses challenges for both organisations and their funders.

Full cost recovery

Adennill y gost lawn


8.4 Monitoring expenditure and budget

The governing body of a voluntary organisation has a responsibility to manage the finances of an organisation and report on them according to law. Above all, voluntary organisations should monitor their finances by careful budgeting.

Monitoring expenditure and budget

Monitro gwariant a chyllideb


8.5 Financial controls

This information sheet gives an example of a financial control policy for a small charity that could also be utilised for a voluntary organisation.

Financial controls

Rheolaeth gyllidol


8.6 Annual accounts and audit

All charities must prepare accounts and make them available on request. The duty to file accounts and the Trustees’ Annual Report with the Charity Commission applies to all registered charities whose gross income exceeds £25,000. Charities whose gross income exceeds £10,000 must send a completed Annual Return, which can be completed online.

Annual accounts and audit

Cyfrifon ac archwiliad blynyddol


8.7 VAT

Value-added tax (VAT) is not a tax on profits, it is essentially a tax on transactions, borne by the final consumer. VAT is a tax which is levied on turnover calculated on the value, actual or deemed, of the supply of gods and services known as ‘taxable supplies’ which are supplied by the registered taxpayer.

VAT

Treth ar werth


8.8 Payroll

Automated payroll systems provided by an outside contractor can be extremely useful and effective. However, if an organisation runs its own payroll system, it needs adequate controls over who should be paid what and when and the making of those payments.

Payroll

Cyflogres


8.9 Reserves

The Charity Commission defines reserves as income that becomes available to the charity and is to be expended at the Trustees’ discretion in furtherance of any charity’s objectives.

Reserves

Cronfa wrth gefn


8.10 Pensions

Pensions are an extremely complex and important area. With the state pension decreasing in value, and Government increasingly committed to greater private pensions, all voluntary sector employers will increasingly have to give more consideration to pension provision for their employees.

Pensions

Pensiynau


8.11 Avoiding fraud

Fraud can be avoided most effectively by creating an effective organisational culture that uses money carefully. This is an important task that goes to the root of financial management and how an organisation works to achieve its mission.

Avoiding fraud

Osgoi twyll

 

8.12 Ensuring you have a good reserve policy

When we refer to 'reserves' we are referring to the part of the charity's unrestricted  funds that re freely available to spend on any of the charity's purposes. This excludes permanent endowment and restricted funds and also income funds that are tied up in fixed assets. Expendable endowment and designated funds may also be regarded as being excluded, but that is up to the trustees to decide based on the particular circumstances.

Ensuring you have a good reserve policy

Sicrhau bod gennych bolisi cronfeydd wrth gefn da    

 

8.13 How should reserves be invested

The Charity Commission defines reserves as the part of a charity's unrestricted income fund that is freely available to spend. Charity law requires any income received by a charity to be spent within a reasonable period of receipt. This has to be balanced with the trustees' need to provide for beneficiaries today and in the future.

How should reserves be invested

Sut y dylid buddsoddi cronfeydd wrth gefn    

 

8.14 Why do you need an investment policy

Charity Commission guidance requires all charities that have investments managed by a discretionary manager (i.e. an Investment Manager that you have agreed has full discretion in making investment decisions on your behalf) to have an Investment Policy Statement. The policy provides a framework for making investment decisions. It is an aid for the effective management of resources and demonstrates good governance. If you have an external Investment Manager, the policy will set the parameters within which they are able to operate.

How to write a good investment policy

Sut i ysgrifennu polisi buddsoddi da    

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