Branch finances handbook 10 June 2013 UNISON handbook ...
Transcript of Branch finances handbook 10 June 2013 UNISON handbook ...
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UNISON
BRANCH FINANCES HANDBOOK
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Contents1 Contents
FOREWORD 4
INTRODUCTION 5
1 STARTINGOUT 7
Administration 7Accounting 8Archiving 8Authority 8Bookkeepingandfinancialaccounting 9TheTreasurer’sToolkit 10Thingstodo 11
2 MANAGINGYOURBUDGET 12
Introduction 12Budgeting 12Overview 12Thebudgetandthebranchcommittee 13Thebudgetcycle 13Preparingabudget 13Approval 14Monitoringandreview 14Cashflowforecasting 15
3 FINANCIALREPORTING 16
Introduction 16Branchaccounts 16Managementaccounts 17Audit 17
4 ACCOUNTINGPROCESSES,PROCEDURESANDRECORDS 18
Payments 18Receipts(cash&cheques) 19Cashbook 20Receiptsandpaymentfiles 20Branchprepaidcard(ALTO)/creditcard 20Electronic/onlinebanking 20Bankaccount 20Bankreconciliation 21Branchaccounts(ruleG3.4.1)andannualreturn(ruleG10.1) 21Audit 21
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1ContentsContents
5 BRANCHFUNDING 23
Introduction 23Definition 23Calculatingyourpercentageentitlement 23Calculatingthesubscriptionspaidbyyourmembers 24Participation 24Appealsprocedures 24
6 BANKING,INVESTMENTSANDTAXATION 25
Currentaccount 25Investments 25Allaccounts 26Taxation(excludingbranch-employedstaff) 26
7 INTERNALCONTROL 27
Introduction 27TheconceptofinternalcontrolinUNISON 27Thenatureofinternalcontrolsystems 27Branchinternalcontrolpolicy 29
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Foreword
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WELCOMETOTHEBRANCHFINANCESHANDBOOK
Ihopeyoufindthishandbookofgreatpracticaluse.Itisdesignedtositalongsideasuiteofresourcesthatwillhelpmakethetaskofrunningyourbranchfinanceseasier.
Thehandbookwasdevelopedafterthefinanceandresourcemanagementcommitteeinstigatedawide-rangingreviewofthesupportavailableforbranchestomanagetheirfinances,particularlyaroundtrainingforactivists.
ThereviewconcludedthattheTreasurer’sHandbook,introducedattheinceptionofUNISON,wasoutdated.Thisnewhandbook,aproductofextensiveconsultationwithbranches,isafit-for-purposeresourcedesignedtoassistwiththenutsandboltsofrunningbranchfinances.Itcanbeusedasaresourcetodipintoasandwhenrequiredorasacover-to-coverreadforactivistsneedingtoacquaintthemselveswiththesubject.
Financeusedtobeseenasthesoledomainofthebranchtreasurerbutthatphilosophyisnowoutdated.Thishandbookencouragesthebranchasawholetotakecollectiveresponsibilityforitsfinances.Frombudgetingtoyear-endaccounts,thewholebranchhasaparttoplay.
However,thishandbookshouldnotbeseenasasingleresource.Rather,itisintendedtositalongsidefinancepolicydocumentationthatwillbethesubjectofnationaldelegateconference(NDC)agreement.
ThereviewhasalsoseentheexcitingdevelopmentofanonlinebranchaccountingpackagethatisabespokeproductforUNISONbranches.Designed‘totaketheaccountingoutofaccounting’,thispackagehasbeenuniversallywelcomedandwillberolledouttobranchesoverthecomingyearorso.
Finally,ourtrainingcourseswillberevampedtoencompassthesenewdevelopments.
Ihopeyoufindthishandbookausefulresourcethat,sittingalongsidethemanyotherdevelopmentsthatthereviewhasbroughtabout,willbringourbranchfinancesintothe21stcentury.
Mike Hayes Chair,financeandresourcemanagementcommitteeFebruary2011
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INTRODUCTION
EachyearUNISONbranchesupanddownthecountryappointatreasurerto‘lookafter’thebranch’smoneybutalltoooftenlittleornosupportisforthcomingeitherlocallyornationally.Awillingvolunteerisoftenelectedwithoutthevolunteerorthemembersthatelectedhimorherfullyunderstandingtheirrolesandresponsibilities.Toaddressthisissueweareprovidingthishandbook–UNISONBranchFinancesHandbook–notonlyfortreasurersbutalsoforallbranchcommitteemembersandbudgetholders.
ItisimportanttounderstandthatourcollectivefinancialresponsibilityextendsbeyondUNISON’sownrulebookandincludescompliancewiththeTradeUnionandLabourRelations(Consolidation)Act1992*aswellastherequirementsofHerMajesty’sRevenueandCustoms.
Alloftheseresponsibilitieswillbecomemuchclearerasyoureadthroughthechaptersofthehandbook.Thehandbookisintendedtobeacomprehensivemanualthatprovidesinformationontheadministrativerolesandresponsibilitiesofbranchtreasurers,branchcommitteesandbudgetholders.
Thefinancialrolesundertakenbybranchofficersandthebranchcommitteeshouldreflecttheirlevelofauthorityandresponsibility.InthiswaybranchesandtherebyUNISONasanorganisationcanensuretransparencyandaccountabilityoverallfinances,financialsystemsandprocedures–andensurecomplianceandadherencetotheaforementionedlegislation.
Thehandbookbeginswithachapteron‘Startingout’whichisprimarilyfornewlyelectedbranchtreasurers.Nevertheless,alltreasurersareencouragedtoreviewitscontent,particularlyasrecommendedpolicy,bestpracticeandcomplianceissuesaredocumented.
Themainbodyofthishandbookiswritteninchaptersaroundthediagramonpage6thatillustratesatypicalaccountingcycleforabranch.Formosttreasurersnewtotherolesomeofthereferencesmaybeunfamiliar,butthechaptersexplainallthemainfinancialprocessesandproceduresandrecommendbestpracticeasappropriate.Attheendofthehandbookisachapteroninternalcontrolpolicythatbringsthesealltogether.Wewillexpectallbranchestoimplementandadheretothispolicydocument.
Branchesshouldensuretheirbranchassessmentincludesdiscussionoffinance,particularlyoncomplianceandfunding.Ifabranchisidentifiedashavingcontinuingexceptionalneedsitmay,withregionalapproval,applyforfinancialassistanceunderSectionCofthebranchfundingscheme.
Thetechnicaldetailsoftheaccountingandbookkeepingroles,particularlyouronlinebranchaccountingsystem,arenotcoveredinthishandbook.Soyouwillnotfindspecificexplanationsaboutmaintainingrecords,reconciliationsandproductionofaccountshere.Thesearecoveredfullyinourtrainingandaccreditationcoursesandfulldetailscanbeobtainedbycontactingyourregionaleducationofficer.
*opsi.gov.uk/ACTS/acts1992/ukpga_19920052_en_1
Dave PrentisGeneral Secretary
Introduction
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Contents
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Last year
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
This year Next year JAN
FEB
MAR
Branch accounting cycle
Financial reporting
Book keeping(recording & analysing)
Financial manage-ment
Financial planning & budgeting for following year
Branch committeeto agree honoraria proposals
Financial planning & budgeting for following year
Production of branch accounts & annual return(deadline Mar 15)
AGM to vote on branch committee honoraria proposals
Introduction
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Starting out
CongratulationsonbecomingaUNISONbranchtreasurer.Youarepartofateamofaround1,100volunteerswhoshareacollectiveresponsibilitytolookafterandreportupontheunion’sfunds.Itisanimportantjobandmosttreasurersfindtheexperiencebothchallengingandrewarding.
Inthischapterwehopetoprovideyouwithanenjoyableoverviewofbeingabranchtreasurerbeforeyoubegininearnest,andtohelpyouavoidsomeofproblemsandpitfallsexperiencedbysomenewlyelectedtreasurers.Theaimisprovideyouwithasolidfoundationfromwhichtomoveforwardtosomeofthemoretechnicalaspectsoftherole.
Thekeyistogetanearlygraspaboutwhatisrequired.Thisiscommonlyreferredtoas‘howtoavoidthefivep’sofbadaccountingpractice’,namely:poorpreparationproducespoorperformance.
InthischapterweaimtogiveyouclearguidanceonhowtoprepareforyourelectedterminofficeastreasurerofaUNISONbranchevenbeforeyousignorbankyourfirstcheque.
Thereisnoonetriedandtestedsystemtomanagethechangeoverfromaretiringtreasurertoanewlyelectedone,sincemosttreasurersdonotworkinexactlythesameway.NationalruleG4.3.2requiresabranchtreasurer‘attheendofher/hisappointment(andatanyothertimewhensorequiredbytheGeneralSecretary)todelivertotheBranchChairpersonorsuchpersonastheGeneralSecretarymayappointallaccounts,financialrecordsandmoneybelongingtotheunion’.Whatyouwillneedisagoodunderstandingofwhatallthisactuallymeans.
AttheendofthischapteristheTreasurer’sToolkit.Thislistsallthedocumentsthatshouldhavebeenpassedtoyouorthatyouwillhaveaccesstofrombrancharchiverecords–andthepurposeofthesedocuments.
ThereisalsoalistofthingstodocoveringthekeydutiesandresponsibilitiesofaUNISONtreasurerfromtakingofficetotheendoftheunion’sfinancialyear(31December).
Thefirsttasksyouneedtotacklefallintofivecategories.Pleasereadthemallbeforeyoubegin‘startingout’.
ADMINISTRATION
Themostefficientaccountingsystemsaresupportedbywellthoughtoutadministrativesystems.Youneedtodecidewhereyouwanttokeepeverythingandwhereandwhenyoucanbecontactedduringtheday.Itisessentialtoallocatesometimeeachweektoadministrativetaskstoavoidbuildingupabacklog,whichexperienceteachesisthescourgeofalltreasurers.
Lookcarefullyatwhatyourpredecessorkeptasusuallythiswillbeagoodstartingpoint.TakealookattheTreasurer’sToolkitandcomparethistowhathasbeenpassedtoyou.Werecommendthatyoutalktothebranchauditorsaboutanyimprovementstheymightsuggest.Usuallytheyareaverygoodsourceofinformationanddonotbeafraidtoapproachthem.
Youwillalmostcertainlyneedfilesforunpaidbillsandthen,dependingonthenumberoftransactions,separatefilesforallreceiptsandpayments.Asyetwehavenotcomeacrossanythingtoreplaceleverarchfilesforkeepingandfilingdocuments.Ifyouhaveinheritedoldonesnowisagoodtimetoreplacethem.Alsoalockablecashboxisidealforstorageandsecurity,especiallyforchequeandpaying-inbooksandpettycashifthisisusedbythebranch.
Somebrancheshavetheirownofficeand/orstorageareasbutdecideonwhatwillworkbestforyou.Makesurethatyouletallbranchofficersknowwhereyouhavedecidedtostorearchiverecordsandhavetheirlocationminutedinbranchrecords.Ifyoudofinditnecessarytokeepsomerecordsatyourplaceofworkmakesureyoumaintaintheserecordsinsubsidiaryfilesandregularlyincorporatethesewithyourmainfilingsystem.
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Starting out
Nexttakealookatthebranchclaimform.Ifthereisnotanofficialbranchforminuseoryourformisinneedofmodernisationyoumaydownloadacopyfromwww.unison.org.uk/activists/branchresources.asp.Youcanamendittosuittherequirementsofyourbranch.
Nowisalsoagoodtimetoreviewhowclaimswillbeprocessed,approvedandpaid.Again,thinkcarefullyaboutwhatwillsuityouanddiscussyourthoughtswiththebranchcommittee,especiallyifnotallofficersarebasedatonelocation.
Finally,lookthroughthetoolkitoncemore.Thisisanidealtimetoensureyouhavesufficientsuppliesofthoseitemsyouknowthatyouwillbeusingand,withtheapprovalofyourbranchcommittee,torenew,updateand/orreplacethemasnecessary.
ACCOUNTING
Atthesametimeasyoureviewadministration,youshouldlookatthelastauditedaccountsforthebranch.‘Audited’meansthatthebranchauditorshaveexaminedtheaccountingrecordsandsignedanauditcertificateexpressingtheiropinionthattheaccountsgiveatrueandfairviewofthefinancialpositionofthebranch.
Youshouldnotbeexpectedtoacceptanyresponsibilityfortheaccountingrecordsorpaperworkuntilthepreviousyear’srecordshavebeenaudited(seealsoBookkeepingbelow).Similarly,ifyouhavetakenoverapartofthewayintoayearyoushouldrequestaninterimauditiscarriedoutbeforeyoutakeoverfullresponsibility.Ifauditorshavenotbeenappointedyouneedtocontactyourregionwhowilladviseyou.
Inaccountingterms,whatyouarelookingtodoisto‘accountfor’–thatistoproveorconfirm–allassetsandliabilitiesthatwerereportedtotheannualmeetingofthebranch(ruleG3.4.2).
Itisasimplematterofworkingyourwaysystematicallythroughthatreport(commonlyreferredtoasthebalancesheet).TheTreasurer’sToolkitcontainsdetailsofeverythingyouneedtoreferto.Hereagain,speaktoyourauditorsifyouencounteranyproblems.
ARCHIVING
Iftheaccountshavebeenauditedandyouaresatisfied(accounted!)withthereportedassetsandliabilities,youcanarchivealllastyear’spaperworkexceptthosedocumentslistedinthetoolkit.Ifyouareallunsureaboutwhattokeepwiththecurrentyear’spaperworkandwhattoarchive,taketheopportunitytotalktotheauditors.
Eachbranchshouldretainrecordsforsixyearspriortothecurrentyear,inotherwordssevenintotal.Thisisastatutoryrequirement.Ifthebranchkeepsafixedassetregisteritisadvisabletokeepindividualrecordsuntiltheassetisnolongerinuseandmakesurethelocationofeachassetisknownanddocumented.
Ifthebranchownsorleasesapropertypleaseemailanyquestionstos.loizou@unison.co.uk
Thekeyobjectiveofarchivingistocomplywiththesix-yearruleand,ofcourse,ruleG4.3.2whenyourterminofficecomestoanend.
AUTHORITY
Youneedtoletyourregionalofficeknowthatyouarethenewtreasurersothatallfuturepaperworkissenttoyou.Thereisanofficialformforthispurposethatyoucanobtainfromyourregion.Pleasedotakecaretonominatetheaddressyouwantyourtreasurer’smailtobesentto.
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Starting out
Youwillneedtochangetheauthorisedsignatoriestoallbank,buildingsocietyandinvestmentaccounts.Youwillalsoneedtochangeanyotherdocumentationrelatingtobranchassetstoreflectthenewsignatories.Youshouldalreadyhaveagoodideaaboutwhichaccountsandotherdocumentsyouwillneedtoupdatefromyourreviewoftheassetsandliabilities.
Althoughwhereverpossibleyoushouldalwaysbeasignatoryonallchequesissued,inrealitythismaynotalwaysbepossible,egwhenyouareonannualleave.Werecommendyouraisethisissuewiththebranchcommitteewhichshouldagreeandminutearrangementstoensurethereinnounduedelayinpayments,particularlymembers’expenses.Rememberitisfarmoreimportantforyoutoensurethatthecorrectchecksandbalancesandprocessesandproceduresareinplace(thatwerefertolaterinthishandbook)thanitisforyoutoalwayssigncheques.
ThisisalsoanidealtimetoreviewallyourbankingandinvestmentarrangementsandtocheckthattheseareallheldinthecorrectUNISONnameofthebranch.Youcanobtainallthenecessarypaperworktoamendsignatoriesandthebranchnamefromyourbank/buildingsociety.PleasealsoreadtheBanking,InvestmentsandTaxationchapter(Chapter6).
WerecommendthatbranchesconsiderUnityTrustastheirbankersgivenUNISON’sspecialrelationshipwiththebank.UnityTrustBankhasadedicatedteamtoadviseyouonthemostappropriatetypeofaccount(s)forabranchofyoursize,membership,incomeandreserves.Itcanalsoprovidedetailsoninternetbankingwhichwillenableyoutomanageyourbankingmoreeasily,anddeliverrealbenefitsandcostsavingswithoutcompromisingsecurity.
PleasevisittheUnityTrustwebsiteforfurtherhelpandinformationorcontactUnity’sTUTeamon08451401000.
Youshouldconsidertheauthorityyouneedtomakepaymentsonbehalfofthebranch.Youshouldbelookingtosecuretheauthorityofthebranchcommitteetomakepaymentswithoutalwayshavingtoobtainapprovaleachtime.
Oneissueyoushouldresolvequicklyiswhatscaleofexpensesthebranchwillpay.TothisendpleasereadtheNECschemeforthepaymentofexpensesinbranches.Pleasemakesureyouarenotexceedingthelimitsset.
Alsoyoushouldintroduceabudgetingprocessassoonasyoucanifyourbranchdoesnotalreadyprepareabudget.Ifthisisthecase,pleasemakereadingthechapteronbudgetinganearlypriority.Somebranchesdelegatetheday-to-daymanagementoftheirfinances(includingbudgeting)toasubcommitteeofthebranchcommittee,commonlycalledthefinance/financeandresourcemanagementcommittee.Suchcommitteestructuresareencouragedbuteachbranchshouldconsiderwhatworksbestforthem.Ifsuchacommitteedoesnotexistyoumaycaretodiscussthiswiththebranchcommitteeandtoagreethebestwayforwardforyourbranch.
BOOKKEEPINGANDFINANCIALACCOUNTING
Goodtreasurersdonotneedtobequalifiedaccountantsbutfirstandforemosttheydoneedtobegoodatkeepingbooksandrecordsthatarewellthoughtoutandorderly.Howeveritisimportantthatyouhaveaclearideaabouttheoverlappingnatureofbothtasks–bookkeepingandfinancialaccounting–andhowoneaffectsandinteractswiththeother.Allfinancialaccounting,whethermonthlyreportstothebranch/financecommitteesortheannualbranchaccounts,reliesonup-to-dateandaccuraterecords.
UnlessyouareexperiencedinthetechnicalbookkeepingandfinancialaccountingrolesyouwillmostprobablybenefitfromattendingaUNISONtrainingcourse.
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Starting out
THETREASURER’STOOLKIT
Item Main purpose Source
The handbook on branch finances Fordaytodayreferencethroughouttheyear.
Availabletodownloadathttp://www.unison.org.uk/activists/branchresources.asp.From2012willbeintegratedintotheOLBA.
Rules (national and branch) Fordaytodayreferencethroughouttheyear Branchcommittee/UNISONwebsite
Branch scheme for expenses Fordaytodayreferencethroughouttheyear BranchcommitteeNECschemeforexpenses.Availabletodownloadathttp://www.unison.org.uk/activists/branchresources.asp.
Cash analysis book (bound) KeeprecordsofyourreceiptsandpaymentsCannotproduceyouraccountswithoutone
Online(GooglesearchforCollinsCathedralAnalysisBook)
Petty cash tin AsecureplacefordocumentsForpettycash,chequebook,prepaidcard/creditcard
Anystationerystore
Lever arch files Filing:Lastyear’saccountsandallsupportingpaperworkCurrentyearbudgetReportstobranchcommitteeReceipts,paymentsCorrespondenceBankstatementsandreconciliationsFixedassetsregisterUnpaidbills
Anystationerystore
Vertical storage boxes Storeprioryearrecordsafteraudit Anystationerystore
Storage wallets Storeprioryearrecordsafteraudit Anystationerystore
Calculator Weallneedhelpaddingup Anystationerystore
Cheque book Topaybills,expenses Yourbank
Paying-in book Tobankcashandchequespaidtobranch Yourbank
Hole punch Toaidfiling Anystationerystore
Stapler Keepsreceiptsandclaimstogether Anystationerystore
Petty cash vouchers (invoice book)
Toissueinsupportofpettycashreceiptsandpayments
Anystationerystore
Envelopes Mailing Anystationerystore
Expenses forms Issuetomembers Branch
Branch minutes (AGM, finance, branch committee)
IndependentevidencesupportingpaymentsGoodpractice
Branchsecretary
Computer/laptop Maintainelectronicrecords,particularlyreceiptsandpaymentsProducereportsWriteletters
UNISONnationalscheme
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THINGSTODO
For the coming year
• Attendanactivisttrainingcoursetobecomeanaccreditedtreasurer.• Findoutwhenthebranchcommitteemeetsanddiarisewhenyouneedtopreparereports
forthecommitteeandbudgetholders.• Briefthewholebranchcommitteesotheyareallawareoftheirfinancialresponsibilities,
includingbudgetingandinternalcontrol.• Prepareandagreeabranchbudget(seeChapter2).• Calculateyourbranchfundingentitlement(seeChapter5).• Reviewandagreewiththebranchcommitteeyourbankingandinvestmentpolicy.• Reviewandagreeyourinsurancerequirementsandnotifyheadofficeaboutany
changesrequired.• Moveyourbranchinsuranceontothenationalscheme.• Agreescaleofexpenses(hotelcosts,travel&subsistence).• Amendexpensesformsasappropriate.• Implementanyrecommendedchangesmadebyyourauditors.• Decideifyouaregoingtokeepmanualorelectronicaccounts.• EnsureanyproposedexpenditureisinaccordancewithUNISONpolicy.• Ifindoubtseekassistancefromyourregion.
During the year
• Receiveallincomeduetothebranchandensurewhereappropriateitisbankedinatimelymanner.
• Ensureallpaymentsareauthorisedbybudgetholders(orthosewithdelegatedauthority).• Makesureallsubscriptionincomedueinrespectofyourmembersissentinitsentiretyto
headoffice.• Keepcashbookuptodateandregularlyreconcilecashbooktobankstatements.• Arrangeforaninterimaudit.• Preparemanagementaccounts.• Monitorandreviewbudgets.• Reporttothebranchcommittee.• Maximiseinvestmentincome.
At the end of the year
• Prepareaccountsforbranchannualmeeting.• Prepareannualreturnforheadoffice.• Haveaccountsandreturnaudited.• PresentaccountstoAGMforapproval.• Submitreturntoheadofficeontime.
Starting out
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INTRODUCTION
Inthischapterweintroducetheconceptoffinancialmanagement–iemanagingthebranchfinancestoachievethefinancialobjectivesasagreedbythebranchcommittee.Therearethreekeyelementstosuccessfulfinancialmanagement.Theseare:
• Financial planning:hasthebranchsufficientfundsintheshortandmediumtermtomeetitsaimsandobjectives?Inthisrespectwewillbelookingatbudgetsandcashflowforecasting.
• Financial control:thisisimportantasithelpstoensurethatyourbranchismeetingitsorganisationalgoals,thatassetsarebeingusedefficientlyandeffectively,andthatthebranchcommitteeisactinginthebestinterestsofitsmemberswithinbranchandnationalrules.Financialcontrolalsoappliestothecustodyandsecurityofassets.
• Financial decision making:thekeydecisionswillbewhichareasofactivitytosupportfinancially,whichnottosupport,andthosewhereadecisionistobedeferred.Decisionmakingalsoincludeswhenandwheretomakeinvestmentsandwhethertousereservestomeetanyshortfallinrevenues.
Wewillconsidereachoftheseelementswithintheoverallstructureofbudgeting.
Werecommendthatyouusethebudgetingfunctionalityincludedintheonlinebranchaccountingsystemthatmakesyourtaskseasier.Fulltrainingisincludedinourtrainingandaccreditationcourses.
BUDGETING
Thissectioncoversthefirsttaskinthebranchaccountingannualcycle:preparingyourbranchbudget.Withoutitnofinancialmanagementorfinancialreportingcantakeplace.Agoodstartingpointwouldbethepreviousyear’saccounts.Theprocessitselfembracesplanning,controlanddecisionmaking.Thereforeouradviceaimstohelpbranchesplan,prepare,monitorandreviewtheirbudgetseachyear.Yourbranchshouldaimtosetabalancedbudget–plannedrevenues(income)=plannedexpenses(expenditure).
Plannedexpensescanbeeither
• capital,thatisexpenditureonafixedasset(egproperty,fixturesandfittings,equipmentetc)ortoaddvaluetoanexistingfixedassetor
• revenue,thatisexpenditureonthedaytodayrunningofthebranch.Pleasetakeaccountofthesedifferenceswhenyoureadthesectiononpreparingabudget.
Financialreportingisreviewedinthenextchapter.
OVERVIEW
Theword‘budget’comesfromtheOldFrenchbougettewhichsomewhatappropriatelymeans‘purse’.Insimpletermsabudgetisyourbranch’sorganisationalplanconvertedintomoney.
Themoneyiswhatthebranchisgoingtospendinachievingitsobjectives(plannedexpenses)matchedtowhatthebranchisgoingtoreceive(plannedrevenues).Obviously,anobjectiveforeachandeverybranchmustbetoensurethatitisabletomeetplannedexpensesfromplannedrevenues.(Usuallyrevenuesshouldbegreaterthanorequaltoexpensesbutwewillreturntothistopiclater.)Meetingthisobjectivewillbedifficultifnotimpossiblewithoutaformalplan,ieabudget,particularlywherethereareconflictingdemandsonthebranch’sfinancialresources.
Preparing,monitoringandreviewingthebudgetisthecollectiveresponsibilityofthebranch
2 Managing your budget
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committeewhereeachofficer/budgetholderhasspecificrolesandresponsibilitieswithintheoverallbudgetaryprocesses.
THEBUDGETANDTHEBRANCHCOMMITTEE
Eachyear,everymemberofthebranchcommitteesharesacollectiveresponsibilitytoreporttotheannualmeetingofthebranchonthebranchfinancesandpresentationofbranchaccounts(ruleG3.4.1).Asthebranchcommitteeisresponsibletothemembershipthenitislogicalthatitmust:
• setabudget
• regularlyplan,monitorandreviewthebranchfinancesand
• takecorrectiveactionifnecessary.
Tothisendthebudgetshouldbeastandingbranchcommitteeagendaitem,andthecommitteemustminutealldecisionsandactions.Thiswillbeusefulforanumberofreasons.AsmentionedinStartingOut,atreasurerrequirestheauthoritytomakepaymentsonbehalfofthebranch.Agreeingabudgetandminutingdecisionsisbyfarthebestwaytodothissothatthetreasurerdoesnotneedtoseektheapprovalofthecommitteeforeachandeverypaymentmade.Also,workinginthiswaywillhelptheauditorswhentheyreviewsystemsandprocedures,aswellasanymemberwho,undersection30oftheTradeUnionandLabourRelations(Consolidation)Act1992,hastherighttoinspecttheaccountingrecordsofthebranch.
THEBUDGETCYCLE
Inthelongruntheannualfinancialcycleoughttobecomeseamlesseventhoughtherewillalwaysbemonthly,quarterlyandannualactivities.ThecyclewillusuallystartaroundSeptemberwithbudgetholderssubmittingtheirplansandthenpassthroughreviewingandapprovalprocesses.Thenthecyclemovesontomonitoring,reportingandtakingcorrectiveactionifnecessary.(Seebranchaccountingyearchartonpage6.)
Forsomebranchespreparinganannualbudgetmaybesufficient,butthemosteffectivebudgetarysystemistoadoptthree-orfive-yearplanningcycles.
PREPARINGABUDGET
WerecommendthataroundAugustorSeptembereachyearthetreasurerputstogethersomeofthekeyfinancialdataforthebranchcommitteeandbudgetholders.Thetreasurershouldusetheonlinebudgetingsoftwareandcompletethesectiononplannedrevenuesinasmuchdetailaspossiblebeforemovingontothesectiononplannedexpenses.
FormanybranchesplannedrevenueswillsimplybethefundingtheyreceiveunderruleH4.1soitwillbeadvantageoustoreadChapter5onbranchfunding.
Incompletingthesectiononplannedexpenses,rememberthatoneofthekeystosuccessfulbudgetingistodeterminewhichitemsofexpenditurearecapitalasopposedtorevenue.Thisisbecauseintheshorttermyouwillbeabletoexerciselesscontroloverfixedexpenses(egleaseagreements)andwhywerecommendthree-tofive-yearplanning.Inthelongertermitwillbepossibletovaryallexpenses.
Thereforefixedexpenseswillbethefirstitemstoincludewithintheplannedexpensessectionofthebudgetandusuallythetreasurershouldbeabletocompletethatpartwithouttoomuchtrouble.Inadditioncapitalexpenditureshouldbeplannedsoastomeetthedemandsofthebranch.Generallythecostofsuchitemsisusuallyhighanditisgoodpracticetomanagefinancessoastoallocatesomeofyourplannedrevenueeachyeartowardsmeetingtherepair,modernisationorreplacementofsuchassets.Itisprudenttoaddsuchallocationstofixedexpenses.
Managing your budget 2
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Havingcompletedthesectiononplannedrevenuesandcalculatedfixedexpensesandanyallocationtocapitalexpenditure,whatremainsismoneyavailabletospendonallotherexpenseswithoutrecoursetoyourbranchreserves.Tocompletetheoverallbudget,thebranchcommitteeandbudgetholderswillneedtobeinvolved.
Werecommendthebranchcommitteeshouldwhereverpossibledelegatebudgetheadstotheappropriatebranchofficers.Itwillbetheirdutytopreparethenecessarypaperwork(theirbudgetbids)forinclusioninthefirstbudgetdraftwhichwillbeconsideredbythebranchcommittee(orfinancecommitteeifdelegated).
Thetreasurerwillcollateallbudgetbidsandfinalisethepaperworkforthecommittee.
Ifbudgetheadsarenotdelegatedtheremainingbudgetshouldbesetbythebranchcommittee.
Somebrancheswillfindithelpfultopreparephasedbudgetsformanagementandreportingpurposes.‘Phased’inthiscontextmeanswhenrevenuesarereceivableorexpensesarepayable,sothetreasurermayaskbudgetholderstopreparetheirbudgetsincalendarmonths.Askingbudgetholderstophasetheirbudgetswillalsohelpcompleteacashflowforecast.
APPROVAL
Theinitialstepoftheapprovalprocessistoreviewthefirstdrafttoensurethatallbudgetbidsareconsistentwiththebranch’sassessment.Thisistheresponsibilityofthebranchcommitteealthoughitcandelegateittothetreasurer.
Ifitisdelegated,thetreasurerwillusuallyresolveanyproblemswithbudgetholdersbeforethebranchcommitteeconsidersthefirstdraft.However,allbudgetholdersshouldpresenttheirbudgetbidsindetailtothebranchcommitteeinordertosecurefunding.
Thisisanidealtimeforthebranchcommitteetoexamineitsoverallorganisationalgoalsandwhethertoextendornarrowthescopeofeachbudgetbid.Indoingso,thecommitteewillneedtoconsiderbothtimeandresourcesassomegoalsmayextendbeyondthenextfinancialyearor,justasimportant,thebranchmaynothavesufficientfundstomeetallthegoals.
Planningoverperiodslongerthanoneyearwillhelpthebranchmanagegoalswherecostsneedtobemetbeyondthecurrentyear.Moreover,thebranchmaydecidetoutiliseanyreservestomeetanyshortfallortopostponeexpenditure.
Planningoverlongerperiodswillhelptheapprovalprocessbutthebranchshouldonlyapproveabudgetwhenitissatisfieditreflectsthebranchcommittee’saims,valuesandobjectives.Whereverpossible,onceabudgethasbeenapprovedthebudgetholdershouldauthoriseallexpensesmadefromthatbudget.
MONITORINGANDREVIEW
Thetreasurerusuallymonitorsthebudgettoensurethereisnooverspendbutmorespecificallythatbudgetholdersarecarryingouttheirdutiesandresponsibilities.Moreoftenthannotabudgetthatissignificantlyunderspentisanearlyindicationofinactionorinactivity.
Aspreviouslymentioned,thebudgetshouldbeastandingitemonthebranchcommitteeagenda.Beforeeverycommitteemeetingthetreasurermustissueeachbudgetholderwithacopyofthemanagementaccountsshowingactivitybetweenmeetingsaswellastheyeartodateposition.Budgetholdersmustreviewthemanagementaccountsandraiseanyissuesdirectlywiththetreasurerwhoshouldprovideamoredetailedanalysisifrequired.Budgetholdersshouldalsobepreparedtoansweranyquestionswhenthecommitteemeets.
Preparingaphasedbudgetwillhelptocompareprojectedexpenditure(phasedbudget)withactualexpenditure.Typicallyeachbranchwillwanttosetitsowncriteriaforreviewingvariances
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(differences)butattheveryleastthecommitteeshouldreviewwhethertheassumptionsmadeatthetimeitpreparedthebudgetarestillvalid.Ifnot,thecommitteeisperfectlywithinitsrightstoamendthebudgetbyreleasingmorefundsorcappinganyfurtherspending.
CASHFLOWFORECASTING
Budgetingwouldnotbecompletewithoutreferencetocashflowforecasting.Thisforecastshouldbepreparedalongsidethebudgetforayearinadvanceandbebrokendownintoquartersandmonthsusingtheonlinebranchaccountingsystem.Theintentionistomatchplannedrevenuesagainstplannedexpensessothatfinancialandmanagementdecisionscanbetaken.
Insomecasesthebranchmaywellbeabletomeetallitsplannedexpensesfromplannedrevenuesbutitmayhavecashproblemsinsomemonths.Forexample,oneofthecoreplannedexpensesforbrancheswillbeattendanceatnationalandservicegroupconferences.InparticularnearlyallbrancheswillspendmostifnotalltheirconferencebudgetbyJuneeachyear–thatiswholeyear’sspendinthefirstsixmonths.Thismaywellcauseashort-termcashflowproblem.
Asalreadymentioned,budgetholdersshouldbeaskedtogivedetailswhentheyarelikelytospendtheirbudgetallocation,towhichthetreasurerwilladdtheamountforallfixedexpenses.Ifthereareidentifiedshort-termcashproblemsthebranchcanthenconsiderarangeofoptionsthatwouldotherwisenotbeopentothem.Thesewillinclude:
• utilisingreservestomakeupanyshortfall
• deferringexpenditure
• negotiatingdifferentpaymentterms.
Finally,preparingacashflowforecastwillidentifywhenthebranchcaninvestsurplusfundstomaximiseincome.Thiswillbevitalespeciallyforthosebranchesthatneedtoincreasetheirrevenues.
Inconclusion,budgetingisperhapsthemostimportantfinancialtaskthatisundertakenbythebranchcommittee.Thebenefitsarenotimmediatelyobviousbutwithplanningabranchcanexercisecontrolthataidsdecisionmaking.
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INTRODUCTION
Financialreportingistheprocessofproducinganddistributingfinancialinformationtomembersofthebranchcommittee,budgetholdersandmembersofthebranch.Theresponsibilityforproducingsuchreportsusuallyrestswiththebranchtreasurer.
Thefinancialreportingmodulewithintheonlinebranchaccountingsystemenablesyourbranchtoselectwhichoptionalreportsitwantstoproduce,egmanagementaccounts.Tomakemanagementaccountseasiertounderstand,itmaybehelpfultocommitteemembersifyousupplementyourfigureswithgraphs/chartsorawrittenreport.
Thischapterexplainsthemaintypesoffinancialreportsthatyoucanproduce,theinformationtheycontainandthereasonsforproducingthem.Inthiswayeachbranchcanthenmakeinformeddecisionsonitsrequirementssothatthetreasurercanplanfortheforthcomingyear.Byandlargethesedecisionswillbeonthetimingandfrequencyofsuchreports.
Theoutputsoffinancialreportingarekeytofinancialmanagement.
BRANCHACCOUNTS
Branchaccountsarecommonlyknownastheincomeandexpenditureaccount(I&E)andthebalancesheet.
UNISONruleG3.4.1requiresareportonthebranchfinancesandthepresentationofbranchaccountsattheannualmeetingofthebranch–tobeheldbetweenJanuaryandMarcheachyear(ruleG3.2).
AsUNISONisanot-for-profitorganisation,ourbranchesarerequiredtoprepareanI&Eaccount.Thisissimilartoaprofitandlossaccountexceptthat,asthemainpurposeisnotgeneratingofprofit,abranchwillrecordasurpluswhereincomeexceedsexpenditureoradeficitwhereexpenditureexceedsincome.
Inaccountingthematchingconceptrequiresrevenues(income)andexpenses(expenditure)tobematchedtotheperiodinwhichtheyrelate,nottotheperiodinwhichtheyarereceivedorpaid.ForbrancheshowevertheexceptionswillbebranchfundingandhonorariawhichmustbeincludedintheI&Eonacashbasis;thatistheyearinwhichtheyarereceivedorpaid.
Typicallytherecordoffinancialtransactionsmaintainedbybranchtreasurersisforayearatatime(between1Januaryand31December).Formanybranchestherewillalwaysberevenuesandexpensesthatarereceivedorpaidoutsideofthesedates.Includingthese(thatismatching)convertswhatareessentiallyreceiptsandpaymentsintoincomeandexpenditure.Thisisthetypeofaccountsthatwerequireourbranchestoprepare.Treasurerswhohaveanaccountingbackgroundwillunderstandthisconcept.Ifnot,thetrainingandaccreditationcourseswillsupplyamoredetailedexplanationofrecordingandmanagingthesetransactions.
The I&Etellsastoryaboutthefinancialactivitiesofthebranchcommittee,particularlyitsspending.Toreiteratethepointmadeinthebudgetingchapter,theaccountsshouldreflecttheorganisationalgoalsofthebranchandhowmuchwasactuallyspentonthese.Thecommitteeisempoweredtoactandtakesuchdecisionsonthemembership’sbehalf.Theaccountsareatransparentwaytoreportonthatdelegatedauthority.
Whentheaccountsarepresentedtotheannualmeetingofthebranch,themembershiphastheopportunitytodiscusscurrentspendingpolicyandwhethertoapprovethese.
WhiletheI&Edetailsthefinancialtransactionsforanaccountingyear,the balance sheetisasnapshotofthebranch’sassetsandliabilitiesonaspecificdate.ForUNISONbranchesthisis31December.Insimpleterms,assetsarethingsofvaluethatcanbeconvertedintocash(ownedbythebranch),whileliabilitiesareobligationsarisingfrompasttransactions
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orevents(owedbythebranch).Eachyearthefinancialpositionofthebranchwillchangecommensuratewiththesurplusordeficitforthatyear.
Usuallyovertimesurpluseswillexceeddeficitsandtheseareheldinwhatarecommonlyknownas‘accumulatedfunds’.Itthereforefollowsthatabranch’saccumulatedfundswillequalitsassetslessitsliabilities.Thisiswhythebalancesheetissocalledasitmust‘balance’.
Ifthebranchhasprepared,agreed,monitoredandrevieweditsbudgetsthenthebranchaccountswillreflectwhatthebranchcommitteesetouttodoandwillreportthis(incompliancewithruleG3.4.1).
MANAGEMENTACCOUNTS
Thereisnonationalorbranchruleorstatutoryrequirementforabranchtoproducemanagementaccounts.Neverthelessitwouldbedifficulttorunabranchefficientlyandeffectivelywithoutproducingthem.Managementaccountsshouldthereforebeproducedandusedforplanningandcontrolanddecisionmakingpurposes.Theprocessstartswithpreparingabudgetandcashflowforecast,bothofwhichwerecoveredindetailinthechapteronmanagingyourbudget.
Thetreasurershouldproducethemanagementaccountsforeachplannedbranchmeeting,usuallyaroundtwoweeksinadvance.Thiswillgivecommitteemembersandbudgetholderstimetoreviewthem.Themanagementaccountswillbringtogetherinonereport:
• budgetedrevenuesandexpensescomparedwithyeartodatetransactions
• forecastrevenueandexpensestotheyearend.
Managementaccountsenablethebranchtocompareaccountswithoriginalbudgetsandforecasts.Theywillalsoenablethebranchto:
• takecorrectiveactionbyhighlightingvariationsinrevenuesorexpenses
• makemoreeffectiveuseofcurrentandfutureresources.
Therewouldbelittleornopointinpreparingbudgetswithoutproducingmanagementaccountsandregularlymonitoringandreviewingthem.
AUDIT
Achapteronfinancialreportingwouldbeincompletewithoutreferencetoaudit.Theguidetobranchauditorssetsouttheirrole,dutiesandresponsibilities.
Theauditorsaretaskedwithpreparingandpresentingtheirreporteachyeartothebranchcommittee.Theirreportshouldcommentonsystems,documentation,observanceofrules,useofbranchfunds,andadministrationmuchofwhichiscoveredinthechapteroninternalcontrol.Thecommitteeisresponsibleforconsideringandimplementinganyrecommendations.
Thebranchcommitteeshouldschedulethismeetinginitscalendar,havingfirstdiscusseditwiththetreasurerandtheauditorssothattheyarecomfortablewiththetimetable.ThecommitteemustalsohaveregardtotheplannedannualmeetingandthenationalruleG9.1whenagreeingadate.
Theonlinebranchaccountingsystemwillprovideamoduleforbranchauditors.
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Inthischapterwewilllookinmoredetailattheaccountingprocesses,proceduresandrecordsforarepresentativeUNISONbranch.TheintentionistoputintocontextthetopicsintroducedinChapter1(Startingout)andtoensureyoumeettherequirementsofsections28to31oftheTradeUnionandLabourRelations(Consolidation)Act1992.Thischapterwillbeofmostinteresttothebranchtreasurer,althoughwhereappropriatethebranchcommitteewillneedtodiscuss,agreeandcommunicatetheproceduresitistooperateundertoallactivists,particularlybudgetholders.Fulldetailsontheseareinthechapteroninternalcontrol.
Inrealitynewtreasurerswillskipyearoneinthebranchaccountingtimelinecycleasmostareelected(ruleG3.4.2)atthebranchannualmeeting(ruleG3.2)thatisheldbetweenJanuaryandMarch.Althoughthisisthefirsttasklisteditisassumedthatthebranchhasabudgetaryprocessinplace.
Theaccountingprocessisaseriesofactivitiesthatstartswithatransaction(areceiptorpayment)andendswiththeinclusionofthattransactionwithinthebranchaccounts(I&E)andannualreturn(rulesG3.4.1andG10.1).Thediagramattheendofthischapterillustratesalltheprocesses,proceduresandrecordsandtheirrelationshipsthatoperatewithinatypicalUNISONbranch.Mostofthischapterisnowdevotedtoexplainingthese.
Theaccountingprocessstartswiththeproductionofanagreedbudget.ThispartoftheprocesswascoveredindetailinChapter2–Managingyourbudget.Theroleofbranchcommitteeandbudgetholderswithinthisprocessshouldbemuchclearernow.Toallintentsandpurposesitisthesegroupsthatcreatefinancialactivityandwhorequiretrainingintheirrolesandresponsibilities.
Thebranchtreasurerisresponsibleformakingallpaymentsandbankingallreceipts.Thebranchcommitteewillbeactingultravires(thatisbeyonditspowers)ifitinanywayattemptstocircumventthisprocessunlessithasjustifiablereasonstovaryorwithdrawthisauthority.‘Justifiablereasons’inthiscontextwillbeconcernsaboutthecustodyandsecurityofbranchassets.Ifthisisthecasethebranchmustcontactitsregionimmediately.
PAYMENTSThenextsectionexplainstheprocessforpaymentsfromactivity,throughinvoicesandexpenses,toauthorisationandthenpayment.Theroleofthetreasureriscrucial.Thebranchcommitteeshouldreviewandcommunicatetobudgetholderstherequirementsdetailedininternalcontrol,butitwillbethetreasurerwhoensurestheyarecompliedwith–intheknowledgethattheauditorswillreviewcomplianceandcommentonanyexceptions.Thetreasurermustreportanyattemptatcircumventingtheserequirementstothebranchcommittee.
Allpaymentsshouldbemadebychequefromthebranchcurrentaccount–neverfromasavingsorinvestmentaccount.Tothisendeachbranchmustopenacurrentaccountin the name of the branch.Oneachandeverychequeissuedtheremustalwaysbetwosignatures,oneofwhichshouldbethetreasurer’s.Inopeningacurrentaccountthebranchshouldnominateatleastthreeothersignatoriesinadditiontothetreasurerandshouldchangetheseasrequiredfollowingchangestorepresentationonthebranchcommittee.Asignatorymustbeanelectedofficerofthebranchcommittee(ruleG4.1.1).
Chequepaymentsmustonlybemadeifamembersubmitsaninvoiceoranexpenseclaimformandsupportingdocumentationwhereverpossible.Allinvoicesmustbeapprovedbythebudgetholderortheperson(s)nominatedbythebranchforthispurpose.All expenses should only be paid if it they conform to the scheme for expenses and are accordingly authorised.Budgetholderscannotauthorisetheirownclaimsforexpensesorforgoodsorservicespurchasedforusebythem(egmobilephoneorlaptop)orforusebythebranch.Usuallythepurchaseofgoodsandserviceswillhavebeenagreedbythebranchcommittee.
Budgetholdersarealsoresponsibleforcodingallinvoicesandexpenses(iedecidingwhich
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budgetheadwillmeetspend)especiallywheretheamounttobepaidcoversmorethanonebudgethead.Thetreasurershouldrefusetomakeanypaymentifthisauthorityand/orbudgetdetailsarenotforthcomingorifapaymentwouldexceedtheagreedbudget.Inthislattercasethebranchcommitteemaydecidetodelegateauthoritytoofficers(egtreasurer,chair,secretary)totakedecisionsbetweenmeetingstowhomthetreasurerwillreferbeforemakingapayment.
Inaddition,thesecondsignatureonachequemustneverbethesameastheauthorisingsignature.Thisis:
• toensurethatallpaymentsfollowthesameprocessandareproperlyapprovedandpaid
• tosafeguardbranchfunds
• toprotectthebranchtreasurer.
Whenissuingchequepayments(especiallywhenpayingexpenses)weadvisethattheclaimantsignstheirclaimformconfirmingreceiptofpayment.Inthiswayyouwillhavefourindependentsignaturesforeachpayment(theauthoriser’s,thetreasurer’s,oneothersignatory’s,andtheclaimant’s).Thisensuresyouhaveasafeandsecurepaymentprocessaswellasaverygoodaudittrail.
InStartingOutwereferredtothetypeoffilingsystematreasurerwouldwanttokeep.Whicheversystemyoudecideupon,itisalwaysgoodpracticetoupdateallinvoicesandexpensesformswiththechequenumberyouusedtomakethepayment.Itisalsogoodpracticetoenterasmuchdetailasyoucanonthechequebookstubasabackuptoyourrecords.
Ifyouneedtohavepettycashdonotuseittopayinvoicesorexpenses.Whenmakingcashpayments(egforofficeincidentals)youshouldfollowthenormalproceduresonauthority.Ifyoudousepettycashpleaseusetheimprestsystem,thatis,afixedamountisagreed(asafloat)andthisisreplenishedbacktotheagreedfixedamountfollowinganycashexpenditure.
Alwaysmakesureyoureconcilereceipts,spendandremainingbalancebeforereplenishing.Anydiscrepanciesshouldbereportedtothebranchcommittee.
RECEIPTS(CASH&CHEQUES)Thissectiondealswithallcashreceivedandbankedbythebranch.‘Cash’inthiscontextisdefinedasmoneyreceivedintheformofactualcash,postalordersandcheques.All‘cash’mustbebankedintact,keptinasecureplaceifleftovernightandnotusedtotopupanypettycashbalancesorspentelsewhere.Inthiswayallreceiptsandpaymentsshouldpassthroughthebankaccountandwillbesupportedbyandvalidatedagainstauthorisedandsignedvoucherskeptsystematicallyinfiles.
Ifthebranchregularlyreceivescashwerecommendthatyoureviewyourinsurancecover.Wedohaveanationalschemewhichyourbranchcanjoin.Detailscanbefoundatwillis.com/Client_and_Carrier_Tools/.SelectLogin;username:UNIS.BRANCH;Password:mabledon.
Branchesmustnotreceivemoneyinanyformotherthancash,postalordersorcheques(egdirectdebit,creditordebitcard)frommembers.IfamemberwantstopaytheirsubscriptionbycreditordebitcardtheyshouldbereferredtotheIncomeandMembershipProcessingSection(IMPS)whichwillmaketheappropriatearrangementsorjoinonlineathttps://join.unison.org.uk
Werecommendthatthetreasurerissuesasignedreceiptforallcashreceivedandretainsacopyinthebranchfilestogetherwithanyotherassociatedpaperworkinsupportofthereceipt.Youwillneedthistoupdatethecashbookaswellasforauditpurposes.
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CASHBOOKAsyouhavebynownodoubtbecomeaware,accountantshavetheirownlibraryofjargonthatincludes‘cashbook’.Thecashbookisprimarilyusedtokeeparecordofallreceiptsandpaymentsthatpassthroughthebankaccountforafinancialyear(1Januaryto31December).Cashbookandreconciliationsareanintegralpartofourtrainingintheonlinebranchaccountingsystem.
Youkeep(maintain)acashbookforayearatatimeaseachyearyouwillcompleteasetofaccountsfromtheserecords.Acashbookispartofkeepingproperaccountingrecordsasrequiredbylegislation.Moreimportantly,theentriesyoumakewillforthemostpartprovidetheinformationyouneedtoprepareandcompletebankreconciliations,branchaccountsandtheannualfinancialreturn.
RECEIPTSANDPAYMENTFILESWecoveredthetypesoffilesyoucanmaintainaswellasarchivinginChapter1.Youshouldkeeprecordssystematicallyandlogicallyandforafinancialyearatatime.Werecommendthatyoukeepdocumentsinchequenumberorderforpaymentsandinreceiptnumberorderforreceipts.Asthesearereferencedinyourcashbook,youareprovidingagood‘audittrail’foreachrecord,thuskeepingyourauditorshappywhentheycometocheckyourrecords.
BRANCHPREPAIDCARD(ALTO)/CREDITCARDItisessentialforbranches,particularlybranchtreasurers,tomaintainadaytodaycontrolofbranch’sfunds.Yetmanybranchesrequiretheflexibilitythatcomeswiththeuseofcardsforpaymentstothoseorganisationsthatrequireupfrontpaymentsforadvancebookings(eghotelsandtravel).Theuseofcardsifnotmanagedcarefullywilldirectlyconflictwithmanagingandsafeguardingbranchfunds.
ItiswiththeseinmindthatwestronglyrecommendtheuseofUnityTrustBank’sbranchALTOprepaidcard.ThefeaturesofthebranchAltoprepaidcardareasfollows
• Operatesfromoneaccount
• Statementscanbedownloadedforcontrolandreconciliationpurposes.
• Multiplecardscanbeissuedtobudgetholders(includingthetreasurerifapproved).
• Limitstobeagreedforeachcard
• FundsMUSTbetransferredontothecard(usuallybytheTreasurer)beforetheycanbeused.
BranchesapplyingforBranchAltocard(s)mustdosowiththeapprovaloftheirbranchcommitteewhichmustalsoagreethecardholder(s)andthelimitforeachcardheld.
AllexpenditurefromALTOprepaidcardsMUSTbeagreedinadvancebythebranchcommittee.TheTreasurerwillberesponsibleforrecording,reconcilingandreportingonallcardtransactions.Ifthetreasurerisacardholderthentwomembersofthebranchcommittee(otherthantheTreasurer)mustindependentlycheckthetreasurer’stransactionsandtheymustreportindependentlytothebranchcommittee.
TheOnlinebranchaccountingsystemenablestreasurerstorecord,reconcileandreportonprepaidcardtransactions.
IfthebranchcurrentlyhasacreditcardwerecommendswitchingtoanALTOcard.Ifnot,itisessentialthatthebranchmaintainsthestrongestcontrolsovertheuseofthecreditcardtoprotectthesecurityofthebranch’sfunds.ThecreditcardmustONLYbeusedfornecessaryandauthorisedpurchasesandNEVERusedtowithdrawcash.
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Accounting processes, procedures and records 4
ELECTRONIC/ONLINEBANKINGElectronicoronlinebankingisincreasinglyusedbybranchesasaconvenientwaytomanagetheirtransactions.Directdebit,standingorderandBACSdirectcredittransactionsareallsafewaysofmakingpaymentsprovidedappropriatecontrolsareinplace.Thesecontrolsshouldprovideassurancethatdirectpaymentsareonlymadeforexpenditureproperlyauthorisedandincurredbythebranch.
Thebranchmusthaveclearproceduresinplacetomonitor,controlandaccountforitsonlinebankingtransactions.
BANKACCOUNTWehavealreadycoveredopeningandusingyourbankaccountbutrememberthatyourbankwillalsokeeparecordofalltransactionsitclearsthroughyourcurrentaccount.Thisiswhyweinsistthatyouonlyuseyourcurrentaccountforallreceiptsandpayments.
Youshouldcontactyourbankandideallyarrangeforittosendyouastatementeachmonth,althoughyoumaycaretoregisterforonlinebanking.UnityTrustBankoffersthisservice–pleasereadthesection‘Currentaccount’inChapter6fordetails.
Itiscustomarytokeepbankstatementsinnumber.Ifyoufollowtherecommendedproceduresforpaymentsyouandyourauditorsshouldnothaveanyreasontoobtaintheclearedchequesfromyourbankers,particularlyasmostwillchargefortheservice.
BANKRECONCILIATIONMostbrancheswillreceiveastatementeachmonthandwerecommendthatyoucarryoutabankreconciliationeachtimeyoureceiveone.Thisistheprocessofcomparingandmatchingthefiguresinyourcashbooktothoseshownonyourbankstatement;inotherwords,provingtheybalancewithoneanother.Itisperhapsthemostimportantaccountingtaskyoucompleteduringtheyear.
Themostimportantreasonfordoingthisistouncoveranydifferencesbetweenyourrecordsandthebank’s.Foreachthereisasimplesolutionandyoushould,whereverdirected,correctanydifferencesbeforeproceedingfurther.Thereasonswhyyoushoulddealwiththesefirstwillbecomeclearasyouworkthroughthisprocess.
Asmentionedinthebankingandinvestmentchapter,thisprocessisautomatedbytheonlineaccountingsystemforbranchesthatuseUnityTrustinternetbankingservice.
BRANCHACCOUNTS(RULEG3.4.1)ANDANNUALRETURN(RULEG10.1)Theproductionofbothoftheseisautomatedwithintheonlinebranchaccountingsystem.
AUDITFulldetailsontheroleofthebranchauditorsarecoveredintheguideforbranchauditors.Acopyisavailableatunison.org.uk/acrobat/B3012.pdf
Forthetreasureritisimportanttokeepinregulartouchwiththeauditors.Forlargebranchesitmaybeusefultoarrangetohavetheaccountsauditedhalfwaythroughtheyear(June/July)asthiswillundoubtedlyhelpattheyearend.
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Contents4
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Accounting processes, procedures and records
ACCOUNTINGPROCESSES,PROCEDURESANDRECORDS
Branch committe
Branch assessment
Budgetholders
Financialactivity
Expensesclaim
Audit Branch meetings
Cash and cheques Invoice
Cash books
Receipts files
Payment files
Authorisation and approval Payment
Cash to bank
Bank account Bank reconcilliation
Budget
Branch accounts and annual return
ApprovebudgetsNo Yes
Processes and procedures
Budget
Records
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5Branch funding
PleasenotethateachbranchhastocomplywithruleG9.1(tosubmitanannualfinancialreturn)otherwiseitsfundingentitlementissuspendedunderruleD1.3.3.3.
Thefullbranchfundingschemeasagreedatthe2002nationaldelegateconference(NDC)isavailableatwww.unison.org.uk/activists/branchresources.asp
INTRODUCTION
UnderruleH4.1eachbranchisentitledtoreceiveregularpaymentsofamountswhichtheNDCthinksappropriatetoensuretheproperrunningofthebranchandmanagementofitsexpenses.Thisiscommonlyknownasbranchfundingandisthemainsourceofincome(revenue)foryourbranch.
Beforethissystemwasintroducedtheoverallamountoffundingpaidtoallbrancheswouldvaryyearonyearandmadebudgeting,particularlyatnationallevel,extremelydifficult.Thebranchfundingreporttoconferencein2002soughttoregularisetheoverallamountallocatedtoallbrancheswithinafixedallocationof23.5%oftotalannualsubscriptionincome.
Theschemehasprovedextremelysuccessfulinensuringfinancialstabilityatalllevelsoftheunionandeachyearsinceitsintroductionwehavebeenabletofundallbrancheswithintheoverall23.5%allocated.Thisisachievedbyallbranchesreceivingastandardpercentageentitlement(20%)andadditionalpercentageentitlementsshouldthebranchqualifyforthese.Whatshouldnowbecomeunderstandableisthatweundertakeacalculationforeachbranchforeachfinancialyear.
Thesuccessoftheschemeinoperationdoesrelyonaworkingpartnershipbetweenbranches,regionsandourIncomeandMembershipProcessingSection(IMPS)inManchester.Thiswillensurethateachbranchispaidthecorrectamounteachyear.
Thereforethischapternotonlyexplainstheindividualcomponentsofbranchfundingtohelpyouwithyourannualcalculationbutalsosetsouttoimproveyouroverallunderstandingoftheschemesothatyouknowwhattodoshouldproblemshappen.
InChapter2wereferredtotheimportanceofcalculatingplannedrevenuesaspartofthebudgetingprocess.Asalreadymentioned,branchfundingisthemainsourceofyourrevenue(income)soyouwillneedtohaveareasonableunderstandingoftheschemeandhowitappliessoyoucan:
• makeareasonableassessmentonwhatmoneythebranchhastospendinadvanceofreceivingdetailsfromIMPS
• checkallthedetailsprovidedbyIMPSforcompletenessandaccuracy.
DEFINITION
Branchfundingissimplymoneypaidtothebranch;butforyourbranchthedefinitionis‘thepercentageofourmembers’subscriptionspaideachyeartothebranch’.
CALCULATINGYOURPERCENTAGEENTITLEMENT
Readingtheschemefortheveryfirsttimeandthentryingtoapplyittoyourbranchcanbequitedaunting.However,allwearedoingistakingyourbranchinformation,applyingthistothescheme,andthencalculatingyourpercentage.
Thecalculationisbasedonanumberofcomponentssoitisimportanttoexplaintheseandhowtheymayaffectyourbranch’spercentageentitlement.Fulldetailsofeachcomponentandhowtoapplytheseareavailablewww.unison.org.uk/activists/branchresources.asp.Youwillfinditeasierifyouworkthroughthedetailofeachcomponentoneatatime.Remember,ifthereissomethingyoudonotunderstandpleasecontactIMPSinManchesterwhowillbeabletoassistyou.
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Branch funding5
CALCULATINGTHESUBSCRIPTIONSPAIDBYYOURMEMBERS
Asyouwillexpect,weprovideyouwithastatementthatdetailsthesubscriptionspaidbyyourmembersfromallsources.Onlythosesubscriptionspaidbyfull,studentandunemployedmembersareincludedinthissectionasretiredmembers’subscriptionsarepayabletoandretainedbythebranchwithoutdeduction.
PleasenotethatunderruleH2allsubscriptionsaretobesenttoheadoffice(inthiscaseIMPS).Ifforanyreasonyoucollectsubscriptionslocallyyouwillneedto:
• sendpaymentforthesetoIMPSwithasmuchsupportinginformationaspossible(amount,whoitisfor,periodcovered)
• whereverpossiblerearrangeforpaymentstobesenttoIMPSormovemembersontothenationaldirectdebitcollectionsystem.
Yourroleistocheckthestatementisacompleteandaccuraterecordforyourbranchandreaffirmsthattheprocessisapartnership.Thestatementcomeswithcomprehensivenotessothereisnoneedtoexplainthesehere.
Only when you are satisfied that both your entitlement and statement are correct should you settle or agree to be paid your statement balance.
Please note that when you agree your statement it becomes your total annual subscription income we and you use for calculating your low subscription entitlement (if any).
Somebranchesmayhavecontinuingexceptionalneedsforwhichspecialfundingmayberequired.SectionCwithinthebranchfundingschemereferstoabranchmakingarequestandsubmittingthistotheNEC.Thebranchassessmentprocessisusuallythecorrectforumforbranchestoliaiseandworkwiththeirregion,shouldthebranchconsidersuchanapplication.Yourfull-timeofficerwillbeabletoadvisethebranchandtohelpwithitsapplication.
PARTICIPATION
Thereisapenaltyapplicabletoabranch’sentitlementshoulditnotmeettheconferenceattendancecriteriaasdetailedinthebranchfundingscheme.
APPEALSPROCEDURES
BranchesmayappealagainstpenaltiesappliedforfailuretocomplywithG9.1and/orparticipationundertheprovisionsofruleD1.3.3.3andruleH5.Insuchcasesthebranchwillbecontactedbytheregion.
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6Banking, investments and taxation
Inthischapterwewillcoverbanking,investmentsandtaxation,includingthetypeofaccountstobeheldandyourUNISONrulebook,andlegalandstatutoryrequirements.(Taxationwillexcludebranch-employedstaffasthissubjectiscoveredinthepolicyhandbook.)
Somereferencesinthischapterarerepeatedelsewhereinthishandbookbutareincludedheregiventheirrelevancetothetopicsbeingcovered.
CURRENTACCOUNT
Itwouldbeextremelydifficult(ifnotimpossible)tokeepcontroloftransactionsaswellasmanagebranchfinanceswithoutabankcurrentaccount.Oneofthekeyindependentchecksonyourbranchfinancesisthebankreconciliation(coveredinChapter4).Unlesseverythingpassesthroughthebankcurrentaccountthiskeycheckwillnotbalance.
TheonlinebranchaccountingsysteminterfaceswithUnityTrust’sinternetbankingserviceprovidedforourbranches.Thisisdesignedtoautomatethisreconciliationandleaveyoufreetodevoteyourtimetosomeofthetreasurer’sotherduties.Therefore,asyouwillexpect,weencouragealltreasurerstoadoptthesystemandtouseUnityTrustBank.
Inthepastweusedtoadvisebranchestoopendifferentcurrentaccountsforseparatefundsusuallybecause:
• itwaseasiertomanageandaccountfortransactionsifseparatecurrentaccountswereheld
• differentofficerswereappointedtomanageseparateaccounts.
However,recentdevelopmentshavechangedourthinkingas:
• theintroductionoftheonlinebranchaccountingsystemeasilymanagestheaccountingfortransactionsforseparatefunds,somultipleaccountsarenolongernecessary
• banksarenowfarmoreregulatedwhichmakesopening,closingandamendingaccountsmorebureaucratic
• overallmanagement,control,custodyandsecurityofbranchfundsbecomeeasieraswellasreducingrisk
• process,proceduresandauditbecomeeasier.
Tokeepcontrolofthebranchfinancesyoumustensurethatalltransactionspassthroughthecurrentaccount,eg:
• allbillsandexpenses
• chequesandanycash
• branchfunding
• directdebitsandstandingorders.
INVESTMENTS
Ifalltransactionsmustpassthroughthecurrentaccountwhyshouldabranchopenanyotheraccounts?Manybrancheswillalwaysholdmoneywhichissurplustotheirday-to-dayneeds,soitmakessensetoinvestmoneyinaninterest-bearingaccount.
Again,maintainingtheprincipleofkeepingthingssimple,werecommendthatyouholdeitherabankdepositaccountorbuildingsocietyaccount–butnotboth.
Ifyoufindthatyourbranchholdsdifferenttypesofinvestmentaccountswerecommendyouconsolidateallbalancesintooneaccount.Notonlywillthismakeyourjobeasierattheyearend,butthesameissuesdetailedunderthecurrentaccountarerelevanthereaswell.
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Banking, investments and taxation6
Therearethreeabidingprinciplestoconsiderbeforeinvestingbranchfunds:
1. Rate of interest
Howmuchinterestcanweearnonourinvestments?Asinvestmentincomeisasourceofincomementionedinbudgeting,branchesshouldmakeeveryefforttomaximisetheearningpotentialofthemoneytheyhold,whilehavingregardtoaccessibilityandcustodyandsecurity.
2. Accessibility
Beforeinvestingsurplusfundswillyouneedtoconsiderwhetherthebranchwillneedaccesstofundsintheshortterm.Usuallyyouwillsecureahigherrateofinterestifyoutieupfundsoveralongerperiod.However,astreasureryoushouldnotcompromisebranchactivitybyfundsnotbeingavailable.
3. Custody and security
Clearlyplacingallbranchfundson12redinacasinocouldperhapssecureahighrateofreturnbutwouldnotbeverysecureascustodywillpasstotheownersif0comesup!ThisiswhyweencouragebranchestouseUnityTrustorBritanniaforinvestmentsasbothcustodyandsecurityareguaranteedinasmuchastheycanbenowadays.
ALLACCOUNTS
Whenyouhavedecidedwhichaccountsaresuitableforyourbranchmakesureyoureportyourpreferencestothebranchcommitteeforapproval.Atthesametime,agreewhowillbesignatoriestoaccounts–theydonotallhavetobethesame–butyouastreasurermustbeasignatoryonallaccounts.
Werecommendyouregisterthreeorfoursignaturesforeachaccount.Anypaymentorwithdrawalmustalwaysrequiretwosignatures.Allaccountsshouldbeheldinthenameofthebranchfollowedby‘branchUNISON’.
Whenconsideringwhoshouldbeasignatorytakeaccountofhowoftenyouarerequiredtomakepaymentsandmakesureothersignatoriesarenotremotefromyou.
Makesurealldecisionsareminuted.
TAXATION(EXCLUDINGBRANCH-EMPLOYEDSTAFF)
ForbranchestaxmattersinUNISONcouldnotbeanyeasier.
Corporation tax
Ifyourbranchhasanytaxdeductedfromitsinvestmentincomethenallyouneedtodoistocompletetheformincludedwiththeannualfinancialreturn.WewillrecoverthisfromHMRevenue&Customsandrepaythistothebranch.However,givenourrelationshipwithbothUnityTrustandBritannia,theywillpayinterestgrossandsoyouwillnothavetocompleteareturn.
VAT
BranchesareoutsidethescopeofVAT.ThereforetheycannotbeVATregisteredanddonotneedtokeepVATrecordsforreceiptsandpayments.
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7Internal control
INTRODUCTION
Thelastentryintheaccountingcycleintroducesinternalcontrol.Therearenumerousdefinitionsofinternalcontrol,mostofthemdraftedbyprofessionalaccountants’organisations.Internalcontrolunderpinsallofthemainstreamfinancialactivitiesdetailedintheannualaccountingtimelinecycle.
Withinthebranchtheresponsibilityforinternalcontroldoesnotrestsolelywiththetreasurerorthebranchcommittee.Ultimatelyitdoesrestwiththebranchcommitteebutallofficersandstewardswillhavesomeaccountabilityforensuringnationalandbranchrulesandpoliciesandlegislationarecompliedwith.
Finallythisisnotanexhaustivedocumentandeachbranchcanadaptittosuitlocalneeds.
THECONCEPTOFINTERNALCONTROLINUNISON
UNISONbranchesshouldhaveadequateaccountingsystemstodischargetheirresponsibilitiestovariousstakeholders,includingcomplyingwithstatutoryandregulatoryrequirements.Asystematicapproachprovideschecksandbalanceswhichhelptoavertbadfinancialpractices.Avitalresponsibilityofthetreasurerandbranchcommitteeistoensurethataneffectiveinternalcontrolsystemisinplace.
Thisdocumentshouldbecirculatedtoallbranchofficers,includingthebranchauditors.Thebranchcommitteemustensurethatallprovisionsareinplaceandcompliedwith.
Internalcontrolincludesallthepoliciesandproceduresadoptedbythebranchtoachievetheorderlyandefficientconductofunionbusiness.
Internalcontrolsystemsattempttoensurethat:
• thebranchkeepscompleteandaccurateaccountingrecordssothatfinancialtransactionscanberecordedanddisclosedinaninformativemanner
• assetsaresafeguardedonbehalfofthemembers
• errorandfraudarepreventedandarelikelytobedetectediftheyoccur
• information(includingfinancialinformation)canbepreparedanddisclosedinatimelyandinformativemanner
• branchofficersandthebranchcommitteeadheretoUNISON’spoliciesandprocedures
• thebranchanditsofficersadheretostatutoryandotherregulatoryrequirements.
Internalcontrolsneedtoextendbeyondmattersdirectlyrelatedtotheaccountingsystem.
THENATUREOFINTERNALCONTROLSYSTEMS
Toensurethatinternalcontrolsystemsareputinplace,systemanalysisanddesignmustincorporatethefollowingfundamentalconcepts.
Segregation of duties
Thebranchmustorganiseofficers’responsibilitiestoensurethatkeytasksaresegregatedtoreducethepossibilityoferror,fraudorthemanipulationofaccountingorotherrecords.Specificresponsibilitiestoseparatearecustody,authorisationandapproval,recordingandexecutionofaspecifictransaction.Thereforeabranchsecretarycannotholdthepostofbranchtreasurer.
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Physical access controls
Onlyauthorisedbranchofficersshouldhaveaccesstotherecordsandassetsofthebranch.Thebranchcommitteewillneedtoestablishacomprehensiverecordingsystemtomaintainanaudittrailofthelocation,custodyandownershipofassets.Inaddition,accesstoanduseofassetsneedtobecarefullycontrolled.
Authorisation and approval controls
Thebranchcommitteeoranofficerdelegatedwiththisauthorityshouldauthoriseorapprovealltransactions.Thebranchcommitteeshouldestablishprocedureswhichincorporateauthorisationlimitsandhowapprovalistobegiven.
Management control
Thebranchcommitteemustensurethatthecontrolsystemisactuallyoperatedandadheredto.Systemsmustberegularlyreviewedtotestwhethertheyadheretopre-agreedstandards.YoucanaskUNISONInternalAudittocarryoutthisreview.
Supervision and regular reconciliation
Thebranchtreasurerandofficersofthebranchcommitteeneedtobeawarethattheirworkmaybechecked.Thisknowledgeshouldhelptoreducetheriskoferror,falsificationorfraud.Thesystemshouldensureperiodicreconciliationoftheaccounts.
Arithmetical and accounting controls
Systemsshouldbeinplacetoensurethattransactionsareaccuratelyrecorded.Thebranchtreasurerorbranchcommitteemustensurethattheyusetechniquessuchasreconciliations,budgetsandvarianceanalysisandanalyticalreview(appropriateforlargerbranches)totrytoensurerecordsarecompleteandaccurate.
Branch officers
Thequalityofanysystemdependsonthecompetenceandintegrityofthoseresponsibleforoperatingit.Hencethetrainingandexperienceofthebranchofficersarevital.
Inaddition,thebranchcommitteehasanimportantroleindevelopingandcommunicatingethicalandUNISONvaluesandtheimportanceofcontrolissuesthroughoutthebranch.
Soundinternalcontrolsareessentialtoensuretheorderlyandefficientconductofunionbusiness.Theannualbranchauditbybranchauditorscanhelpassessanddevelopinternalcontrols.
A set of controls
Operatingasetofcontrolshelpstoquicklyidentifyweaknesses.Thecontrolsaremeanttobeaworkingdocumentthatshouldbereviewedforeffectivenessandrevisedaccordingly.Branchescanreadilyimplementtheexampleofasetofcontrolspresentedhere.
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7Internal control
BRANCHINTERNALCONTROLPOLICY
1 General
1.1 Branchrecordswillbekeptsothatthebranchcan:
(a)meetitslegalandotherobligations,egTradeUnionandLabourRelations(Consolidation)Act1992,HMRevenue&Customslaw,employmentlawandUNISONrules
(b)enablethebranchcommitteetobeinproperfinancialcontrolofthebranch
(c)enablethebranchtomeettherequirementssetoutbyUNISON.
1.2 Thebranchwillkeepproperbooksofaccounts,whichwillinclude:
(a)acashbookanalysingallthetransactionsinthebranchbankaccount(s)
(b)apettycashbookwithreceipts(whereapplicable)ifcashpaymentsarebeingmade
(c)PAYErecordsofstaffemployedbythebranch(whereapplicable).
1.3 Thefinancialyearwillendonthe31Decembereachyear.
1.4 Thebranchwilldrawupaccountsaftereachfinancialyearby15Marchfollowingtheyearendandpresentthemtothenextannualgeneralmeeting.
1.5 TheAGMwillappointanappropriatelyqualifiedauditorortwolayauditorswhoaremembersofthebranchwhoarenotbranchofficerstoexaminetheaccountsforpresentationtothenextAGM.
1.6 ThebranchwillsubmitanauditedandAGM-approvedannualreturntoheadofficeby15Marcheveryyear.Astatementofincomeandexpenditureandabalancesheetwillalsobesubmittedwiththeannualreturn.
1.7 Nopaymentsshouldbemadeforpoliticalpurposesortopoliticalpartiesfrombranchfunds.
1.8 AllbranchexpenditureshouldbeinlinewithUNISONrules,policy,aimsandvalues.
2 Banking
2.1 ThebranchshouldbankwithUnityTrustBank.Accountswillbeheldinthenameofthebranch.Thefollowingaccountswillbemaintained:
• acurrentaccount
• adepositaccount.
2.2 Thebranchcommitteewillalwaysapproveandminutethebankmandate(thelistofpeoplewhocansignchequesonthebranch’sbehalf).Thebranchwillnominateatleastthreeothersignatoriesinadditiontothetreasurerandwillchangetheseasrequired.Allsignatoriesmustbemembersofthebranchcommittee(ruleG4.1.1).
2.3 Thebranchwillrequirethebanktoprovidestatementseverymonthandthesewillbereconciledwiththecashbookatleasteverymonth.Thetreasurerwillspotcheckthatthisreconciliationhasbeendoneatleasttwiceayear,signingthecashbookaccordingly.
2.5 Apre-signedchequewillnotbeallowed.Twosignatories,oneofwhomshouldbethetreasurer,mustsigneverychequeforpayment.
Surplusfundswillbeinvestedinthedepositaccount.
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3 Receipts (income)
3.1 Allmoniesreceivedwillberecordedpromptlyinthecashanalysisbookandbankedwithoutdelay.
3.2 Subscriptionscollectedlocallywillbepaidtoheadofficeeverymonth.
3.3 Thetreasurerwillmaintainfilesofdocumentationinsupport.
4 Payments (expenditure)
Theaimistoensurethatallexpenditureisforunionbusinessandisproperlyauthorisedandthatthiscanbedemonstrated.Theapprovedbudgetprovidesthechequesignatorieswithauthoritytospenduptothebudgetedexpenditure,notbeyondit.
4.1 Thetreasurerwillberesponsibleforholdingthechequebook(unusedandpartlyusedchequebooks)whichshouldbesecurelykept.
4.2 Blankchequeswillneverbesigned.
4.3 Thepayee’snamewillalwaysbeinsertedonthechequebeforeitissignedandthechequestubwillalwaysbeproperlycompleted.
4.4 Thesecondsignatureonachequemustneverbethesameastheauthorisingsignature.
4.5 Achequemustnotbesignedbythepersontowhomitispayable.
4.6 Thechequesignatorieswillalwayscheckthepaymentdocuments(eginvoices,expenseclaimforms)beforesigningthecheque.Nochequesshouldbesignedwithoutoriginaldocumentation.
5 Payment documentation
5.1 Everypaymentoutofthebranch’sbankaccountswillbeevidencedbyanoriginalinvoice(neveragainstasupplier’sstatementorfinaldemand).Thatoriginalinvoicewillberetainedandfiled.Thechequesignatorywillensurethatthepaymentdocumentisreferencedwith:
• thechequenumber
• thedatethechequewasdrawn
• theamountofthecheque
• whosignedthecheque.
5.2 Theonlyexceptionstochequesnotbeingsupportedbyanoriginalinvoicewouldbeforsuchitemsasadvancedbookingfeesforacourse,depositforavenue,ordepositforhotelaccommodation.Inthecaseofhonorariapayments,affiliationsanddonations,acopyoftherelevantbranchandAGMminutesshouldbefiledtosupportthepayment.Inthesecasesaphotocopyofthechequewillbekept.
5.3 Wages and salaries:therewillbeacleartrailtoshowtheauthorityandreasonforeverypayment.AllemployeeswillbepaidwithinthePAYEregulations.Afileforwagesandsalarieswillbekept.
5.4 PaymentforcasualwageswillalsobesubjecttoPAYEregulations.Cashinhandwillnotbepaidforcasualwork.
5.5 Thebranchcommitteewillauthoriseallemployeeappointmentsanddepartures,minutingthedatesandsalarylevel.Thebranchcommitteewillalsoauthoriseallchangesinhoursandvariablepaymentssuchasovertime.
5.6 Petty cash:wherethisbecomesanecessityitwillalwaysbemaintainedontheimprestsystem,wherebythetreasurerisentrustedwithafloatasagreedbythebranchcommittee.Whenthatismoreorlessexpended,achequewillbedrawnforsufficientfundstobringupthefloattothe
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agreedsum.Thechequewillbesupportedbyacompletesetofexpenditurevouchers,totallingtherequiredamount,analysedasrequired.
5.7 Expenses and allowances:thebranchwill,ifasked,reimburseexpenditurepaidforpersonallybyofficers,providingthat:
• faresareevidencedbytickets
• otherexpenditureisevidencedbyoriginalreceipts
• carmileageisbasedonHMRCandUNISONscales
• theofficerwasauthorisedtomakethatexpenditure.
5.8 Nochequesignatorywillsignforthepaymentofexpensestothemselves.
5.9 Allbranchrecordswillbekeptforsixyears.
6 Branch prepaid card (ALTO)/credit card/e-payments
6.1 Branch card prepaid card (ALTO)/credit card: paymentcardscanprovideconveniencebutitisimportantthatpropercontrolsareinplacetoensuretheircorrectuseandtoprotectthesecurityofthebranchfunds.
• Thecardmustalwaysbekeptinaphysicallysecurelocation.
• Thebranchcommitteemustapproveinadvanceanyamounttobespentbyuseofacreditorprepaidcard.
• Onlynecessaryandauthorisedpurchasesmustbemadeandshouldonlybeusedforpurchasesforwhichchequesareimpractical,egonlinehotelbookings,railticketpurchases,etc.
• Authoritylevelsforplacingordersandapprovingpaymentsmustbeestablishedwhichareclearandpreferablydocumentedinthebranchrules.
• Thereshouldbeprocedurestoensureinvoicesreceivedarecheckedagainstordersandconfirmthereceiptofthegoodsorservicesordered.
• Thebranchmustsetaclearpolicyfortheuseofcards.
• Thebranchneedstocommunicatethepolicyfortheuseofcardsclearly,inwriting,toofficersusingthem.
• Thebranchmustensurethatthecardsarecancelledanddestroyediftheindividualceasestobeabranchofficeroriftheauthorisationofthecard’suseiswithdrawn.
• Thebranchmustensurethatcardexpenditureissupportedbyavoucherand/orinvoiceandrecordedandanalysedinaccountingrecords.Areceiptmustbekeptforabsolutelyeverything.Wherepurchasesaremadeonline,thebookingconfirmationmustbeprintedoutandretained.
• Themonthlycreditcardandprepaidcardstatementsmustbereviewedbyatleasttwobranchcommitteemembers(includingthetreasurer)andinitialledasevidenceofthatreview.Thestatementmustbecollatedwithsupportingvouchersandinvoicesprovidedtotheusersofthecard.
• Theremustbeperiodicreviewsofcardusetoensureconsistencyofusewithsetpolicies.
• Thecreditcardmustnotbeusedtowithdrawcash.
6.2 Electronic/online payments:Thebranchmustensurethatdirectdebit,standingordersandBACSdirectcreditareonlyusedforexpenditureproperlyauthorisedandincurred.Thebranchmustestablishacomprehensiveonlinebankingpolicythatthatclearlydescribeswhatonlinebankingactivitiesthebranchwillengagein,andwhichbranchofficerwillhavetheauthoritytoprocessonlinebankingtransactions.
• Allelectronicpaymentsmustbeauthorisedbythebranchcommitteebeforethey
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areprocessed.
• Thebranchmustensurethatonlyspecificallyauthorisedbranchofficersareabletosetuparrangementstomakepaymentsbydirectdebit,standingorderandBACS.
• Adetailedapprovalprocessthatmustbecompletedinorderfortheauthorisedbranchofficertoprocessanonlinebankingtransaction.
• Thebranchmustadoptthedualortripleauthorisationsystemtocompleteanyelectronictransactions.Withthissystemoneusersubmitsatransactionandoneortwoadditionaluserswillthenauthoriseitfroma‘pendingtransactionscreen’.
• Aftereachelectronic/onlinetransactionaprintoutmustbetakenshowingdetailsofthetransactionsandfiledaspartoftheaccountingrecords.Allprintoutsofstatementsmustberetainedaspartoftheaccountingrecords.
• Thestatementtogetherwiththeindividualtransactionprintoutmustbereconciledwiththemonthlybankstatementbysomeoneindependentoftheprocesstoverifythatalltransactionswereproperlyapprovedandappropriate.
• Theelectronicpaymentsmustbemonitoredsothatthebranchcanensurethatthearrangementiscancelledwhenthebranchstopsusingthegoodsandservicesbeingsupplied.
7 Budgeting and financial planning
7.1 Thebranchcommitteewillensurethatthebranchmeetsallitsfinancialobligations.
7.2 Priortothestartofeachfinancialyear,thebranchwillproduceabudgetwhichtakesintoaccountalllikelyexpenditureandincomeforthefollowingyear.InthiswaythebranchcommitteecanensurethatallrelevantareasofactivityareprovidedforinlinewithUNISONrules,policy,aimsandobjectives.
7.3 Theprocedureswillbeasfollows:
• thetreasurerwillprepareabudgetafterconsultingotherbranchofficerswherenecessary;
• thetreasurerwillsubmitthebudgettothebranchcommitteeforapproval.Allnormalexpenditurewithinthisbudgetisthereforeautomaticallyapproved
• thebudgetwillbesubmittedaspartofthebranch’sdevelopmentandorganisationplanandwillbesufficienttofund:
• recruitment
• developmentandtrainingofstewards,workplacerepresentativesandbranchofficers
• negotiationandrepresentation
• ensuringthatallmembersknowaboutissuesthataffectthemandareabletoparticipateinUNISON’sdemocraticprocesses
• ensuringthatmembershaveaccesstoUNISON’sservices
• campaigningonUNISONobjectivesandpriorities.
7.4 Onceagreed,abudgetcanbeamendedbythebranchcommittee,afterthefullreasonsforamendmenthavebeensubmitted.Thebranchcommitteewilldebateitemsinexcessofthebudgetandifitapprovesthemwillhaveamendedthebudget.
7.5 Thetreasurerwillcompareactualexpenditurethroughouttheyear(everymonth)withthebudgetandreportoverspendingtothebranchcommitteesothatappropriateactioncanbetaken.
8 Other undertakings
8.1 Thebranchwillnotacceptliabilityforanyfinancialcommitmentunlessproperlyauthorised.Thebranchcommitteemustauthoriseandminuteanyordersorundertakingswhichare,
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primafacie,likelytoexceed£500.Inexceptionalcircumstancesthechaircanapprovesuchundertakingsandprovidefulldetailstothenextmeetingofthebranchcommittee.
8.2 Thebranchcommitteewillensurethatthebranchhasadequateinsurancecover.
8.3 Thebranchwillnotmakeloanstomembers.
8.4 Substantiveamountswillnotbepaidforlocalwelfarewithoutsufficientgrounds.AllrequestsforlocalwelfarewillbereferredtoUNISONWelfare.
8.5 ThebranchwillcomplywithUNISON’shonorariapolicyandsubmithonorariapaymentsdetailsfollowingapprovalbytheannualgeneralmeeting.
8.6 Thebranchwilladheretogoodfinancialpracticeatalltimes,eg:whenrelevantitwillsetupandmaintainafixedassetregisterstatingthedateofpurchase,cost,serialnumbersandnormallocation.Additionally,thebranchwillmaintainapropertyrecordofitemsofsignificantvalue,withanappropriaterecordoftheiruse.
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ProducedbyUNISONCommunications.PublishedandprintedbyUNISON,1MabledonPlace,LondonWC1H9AJwww.unison.org.ukCU/MAY2011/19960