Protect Your Charity’s Money – Internal Financial Controls

Fraud Top TipsAs a trustee you must take steps to make sure that your charity’s money is safe, properly used and accounted for. Every trustee has to do this. Even if your charity has an expert to manage its finances, you are still responsible for overseeing your charity’s money.

Protect your charity’s money

Make sure that money is only spent on what is allowed by the charity’s governing document and policies. If it is not, you and the other trustees need to put it right.

Use the Internal financial controls checklist (MS Word Document, 31.6KB) to help you know you are doing this properly. This will help you make sure that money coming into the charity is:

  • secure and recorded
  • only spent on your charitable purposes
  • at less risk of theft, fraud or cyber crime

National Living and Minimum Wage Rates Increase April 2021

WagesThe Government announced at the end of  November 2020 the National Living Wage (NLW) and National Minimum Wage (NMW) rates which will come into force from April 2021.

It accepted in full recommendations made by the Low Pay Commission at the end of October 2020

The National Living Wage, ie for those aged 25 and over, will increase by 2.2 per cent from £8.72 to £8.91, and will be extended to 23 and 24 year olds for the first time.

For workers aged under 23, Commissioners recommended smaller increases in recognition of the risks to youth employment which the current economic situation poses.

Rate from April 2020 Rate from April 2021 Increase
National Living Wage £8.72 £8.91 2.2%
21-22 Year Old Rate £8.20 £8.36 2.0%
18-20 Year Old Rate £6.45 £6.56 1.7%
16-17 Year Old Rate £4.55 £4.62 1.5%
Apprentice Rate £4.15 £4.30 3.6%
Accommodation Offset £8.20 £8.36 2.0%

You can read the Low Pay Commission 2020 summary of findings here

The Legal Status of Volunteers

VolunteersYour charity could get into legal problems if you don’t clearly distinguish between its paid staff and volunteers.  It’s possible for volunteers to claim they have the same rights as employees, including claiming unfair dismissal for example.

A written role description for your volunteers can help make it clear what the boundaries and expectations are.  It’s important that the role description could not be confused with an employment contract or job description.  For example it must not require volunteers to work particular hours.

Insurance to cover volunteers

Make sure your charity’s insurance covers your volunteers.  Even if your charity doesn’t employ staff, you may still decide to take out employers’ liability cover for volunteers.

Check whether your insurance policy:

  • includes volunteers
  • covers the activities volunteers will be doing
  • states any age limits for volunteers

Expenses for volunteers

Volunteers aren’t paid for their time but should be paid for any out-of-pocket expenses. These expenses could include:

  • travel
  • postage and telephone costs if working from home
  • essential equipment, such as protective clothing

Volunteers should provide receipts for any expenses they incur.

If a volunteer receives any type of reward or payment other than expenses, they may see this as a salary and they could be classed as an employee or worker. This then gives them some employment rights.

Criminal records checks

If your volunteers will be working with children or vulnerable adults, by law you can get a Disclosure and Barring Service check (DBS, formerly the Criminal Records Bureau) on them.

The DBS will search police records to identify people who are unsuitable for certain types of work, especially work involving children and vulnerable adults.

DBS checks are free for volunteers.

Appointing An Independent Examiner

AccountingHaving opted for an Independent Examination of their charity’s accounts, the  trustees may find it helpful to draw up a set of questions to ask their proposed examiner to help them check that the person has the skills and experience needed. You should ask:

  • all examiners  to confirm that they have read and understood the Charity Commission’s Directions and guidance
  • professional examiners to provide proof of membership of one of the professional bodies listed here and that they meet that body’s requirements for acting as an independent examiner.  In particular, the examiner is likely to need a practising certificate or licence, although if he or she is not charging a fee to carry out the independent examination this may not be necessary.  This check can be done using each body’s on-line member search tool, or directly if the body does not have this facility
  • non-professional examiners to explain their skills and experience and why this makes them competent to carry out the work.  For example, the examiner may work in a role that involves financial management, such as setting and managing budgets and reviewing financial reports, or that requires knowledge of accounting systems, such as maintaining financial records and internal controls

The trustees’ decision to appoint a person to act as the charity’s examiner should be in writing and recorded in the charity’s minutes.  The examiner should confirm their appointment and this can be done by an exchange of emails.  Professional examiners may issue a letter of engagement, setting out the terms of their appointment including their fee.

The process of finding and appointing an examiner can take time and so should not be left until the trustees’ annual report and accounts are due for filing.

Charity Annual Return Deadlines

DeadlineIt is coming up to the deadline for submitting your annual return if your financial year end was 31 March 2020. 

Your deadline is 31 January 2021

You can submit your annual return online here

You must submit your annual return within 10 months of the end of your financial year, but in these difficult and challenging times, when many people are on furlough, and many activities are closed, you may not feel able to do your return just now.

Charities that are due to submit an annual return imminently, but feel unable to do so, can email to ask for a filing extension.

Please include your charity name and charity registration number when you send your email:  filingextension@charitycommission.gov.uk

Some Sad and Some Happy News

Sad News

CondolencesDerby CAS is very sad to let you know that our President, Ted Cassidy, has died on January 8th 2021

It was Ted who set up and delivered the Community Accountancy Service in Derby between 1991 and 1997

The reputation he gained for our service was vital when we became an independent charity in 2002.

Ted continued to support us in the role as our independent examiner until 2018.

All those in the voluntary sector who remember Ted were as saddened as we were by the news.  They all spoke of their gratitude to Ted for all his help, and remember his great kindness. 

Not only was Ted a great accountant and a great businessman, he was, more importantly, a person who cared for others and did so much to help so many people.

We send our sincere condolences to his wife Una and all the family.  RIP Ted

Some Good News

Sophie Exam SuccessIn all the sadness and gloom it is good to report some really good news.  Sophie Shields has passed her final accountancy examinations!

Sophie joined us as a volunteer in 2014 to gain work experience.  After leaving us, Sophie found employment in the voluntary sector and started taking the qualifications to become a Chartered Certified Accountant, but still found time to come back to help out at Derby CAS!

Many congratulations to Sophie!! 

Winter Newsletter

Winter Newsletter Title Picture

Our winter newsletter has been posted out to those on our mailing list.

Articles in this issue cover

Congratulations to Annabel’s Angels, and how you can win the Andrew Buxton Memorial Award in 2021; Can Your Charity Help With Coronavirus Efforts?; Extension of the Job Retention Scheme (Furlough); People and Skills: The Minute-Taker 

If you have not received your copy, or you wish to be placed on the mailing list please let us know here

Click on this link to read all about it!

Newsletter Winter 2020

Happy New Year!

img078GOOD NEWS TO START 2021!

 We are delighted to let you know that our President, Ted Cassidy, who established Community Accountancy in Derby, is back home with his wife Una after being treated in hospital for COVID-19
 
We at DCAS always remember all he has done for us and the wider Voluntary Sector, and we are sure that you will want to join us in wishing Ted a speedy and full recovery.
 
PLEASE NOTE
The DCAS office is now open again from Monday to Friday, 9:00 am to 5:00 pm
 
If you need to visit in person, you must have booked a  pre-arranged appointment.  This is so that we can keep you and our staff safe and well during these difficult times.
 
You can ring us on 01332 364784, or email us here
 
Wishing you all a very Happy New Year, and stay safe and well everyone.

Holiday Pay During Furlough

Coronavirus-legal-insights-annual-leave-and-furloughAlmost all workers, including zero-hour contracted workers and those on irregular hours contracts, are legally entitled to 5.6 weeks’ paid holiday per year. The exception is those who are genuinely self-employed.

Furloughed employees continue to accrue leave as per their employment contract.

You can only place employees on furlough if coronavirus (COVID-19) is affecting your operations.

You should not place employees on furlough just because:

  • they are going to be on paid leave
  • you usually do less business over the festive period

The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. If they are flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.

Working Time Regulations (WTR) require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the last 52 working weeks (twelve weeks in Northern Ireland). Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.

Employers will be obliged to pay employees who are on holiday additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need and the correct notice is given. This applies for both the furlough period and the recovery period.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.

More details can be found here