Main Duties of the Treasurer or Finance Sub-Committee

Main Duties of the Treasurer or Finance Sub-Committee

Whatever the size of the organisation, charities are expected to ensure that their financial systems:

• enable accountability and transparency
• produce an effective audit trail
• include a segregation of duties

The financial duties undertaken by people in the organisation should reflect levels of authority and responsibility within an organisation. As well as identifying which tasks need to be performed for financial good practice, the committee should identify who will undertake the tasks so that:

• no one person can perform so many tasks that they can manipulate the system e.g. order goods, approve and make payment and record the transaction
• at least one cheque signatory should inspect the invoice before approving payment
• all tasks are properly completed e.g. the segregation of duties should clearly identify who is responsible for each task.

Where staff resources are not sufficient to provide for an adequate segragation of duties, many groups have found an acceptable alternative to be that the committee performs some of these tasks themselves, perhaps as part of the function of the finance sub-committee.

Remember that your auditor or independant examiner can provide useful financial advice to the committee about your systems and procedures as well as producing year end accounts.

It is never acceptable for the management committee to assume that employees are managing the organisation's finances properly. Where this happens, the management committee are failing in their duty to safeguard the interests of the organisation and are also placing staff in a vulnerable position.

Financial Responsibilities

The financial duties undertaken by people in the organisation should reflect levels of authority and responsibility within an organisation.

Management Committee

• Ensures funds are used in accordance with the governing document (e.g. constitution) and management committee decisions
• Ensures the use of funds complies with conditions set by funding bodies
• Ensures relevant staff and management committee members know enough about financial administration, book-keeping and the accounts to be able to do their work properly and make decisions for which they are responsible.

Finance Director or Auditor/independant examiner or Treasurer

• Advises on fraud prevention measures
• Presents the end-of-year financial report (draft annual accounts) to the management committee
• Presents the auidited accounts to the Annual General Meeting.
• Ensures that members at the AGM have a basic understanding of the annual accounts and the budget for the current year.

Financial Sub Group

• Advises on financial policy issues, for example, what expenses can be claimed and the procedures for claiming them, financial implications of new activities, or the organisation's policy on charging for its services.
• Makes financial decisions, as uthorised on behalf of the management committee between meetings, and reporting such decisions to the Committee.
• Liases with the bank, the organisation's auditors or other financial institutions on behalf of the organisation.
• Prepares the accounts for audit, and discusses them with the auditor as required.
• Decides on security measures to ensure cash or cheques are not misused.

Financial Planning and Budgeting

The Finance Sub Group advises on areas of financial planning, including:

• preparing budgets for ongoing work and special projects, in consultation with the appropriate staff and funders;
  
  
• presenting budgets to the Management Committee for approval;
  
  
• ensuring accurate records of actual income and expenditure are maintained, as compared to budgeted income and expenditure, and adjusting financial forecasts as appropriate;
  
  
• in case of cashflow problems (not having enough money to pay bills when they are due), deciding priorities for paying and negotiating for late payment if necessary.

Financial Reporting

The Finance Sub Group ensures that the Management Committee has enough information to make its decisions. This means:

• reporting, in writing, to the Management Committee on the organisation’s financial position;
  
  
• preparing and presenting financial reports and accounts when required;
  
  
• ensuring that the organisation is adequately insured and that the policies are regularly reviewed to ensure that the cover is still adequate and the premiums competitive.
  
• maintain an appropriate system for calculation,payment and the recording of salaries including tax and National Insurance.
  
• ensuring that the organisation makes pension provision for staff in line with legal requirements and value for money.
  
• managing the selection of auditors, reviewing their services to the organisation and recommending their appointment to the AGM.
  
• ensuring the auditor is providing an adequate level of advice to the organisation which is agreed and set out in Auditors management letter.
  
• ensuring that the end of year accounts prepared by the auditor complies with the Charity Commission's Statement of Recommended Practice (SORP).

Banking, Book-keeping and Record-keeping

Although the Finance Sub Group may not do the actual tasks involved in getting money into and out of the bank or writing up the books, they are responsible for:

• advising on the process for choosing which banks or other financial institutions the organisation should use and what type of bank accounts it should have (note that every decision to open, close or change a bank or other account must be approved by the Management Committee);
  
  
• serving as a signatory for the organisation’s bank accounts (all changes of signatory must be approved by the Management Committee);
  
  
• ensuring there are proper systems for receiving and paying out cash and cheques;
  
  
• setting up appropriate book-keeping and petty cash systems, and ensuring related documentation is kept;
  
  
• ensuring membership subscriptions are collected and proper membership records are kept;
  
  
• ensuring other monies due to the organisation are collected, that guidelines exist for action to be taken in cases of non-payment, and such action is taken if required;
  
  
• ensuring receipts are issued, if required for money received by the organisation;
  
  
• ensuring all income (including cash) is paid into the bank;
  
  
• ensuring all bills are paid;
  
  
• ensuring everyone handling money for the organisation keeps proper records and documentation.
  
  
  

Control of Fixed Assets and Stock

The Finance Sub Group ensures the organisation maintains proper control of its fixed assets (major equipment, vehicles, buildings and other property owned by the organisation), its materials or supplies (goods which get used up in running the organisation) and its stock (goods such as publications waiting to be distributed or sold). This responsibility includes:

• ensuring the organisation keeps proper records of materials and supplies used in its work;
  
  
• establishing systems for stock control and re-orders;
  
  
• ensuring the organisation keeps proper records of its equipment and vehicles, including date of purchase, supplier, value, model and serial number;
  
  
• ensuring the organisation keeps proper financial records relating to property (buildings and land) it owns or rents;
  
  
• ensuring the organisation has all necessary insurances and keeps them up-to-date.

LINKS:

Introduction to management committees
Role of individual management committee members
Role of sub-committees
Management committee/staff relations
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