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► SCHEDULE H - FINANCE PROCEDURES & RESERVES POLICY

SCHEDULE H - FINANCE PROCEDURES & RESERVES POLICY

1.1    Management

(a)    Funds of Swansea Metropolitan University Students’ Union may be expended solely in furtherance of the objectives of the Students’ Union (as laid down in the Students’ Union Constitution) having in view its charitable purpose and the provisions of the Education Act 1994 Part II.

(b)    The Students’ Union shall plan and conduct its affairs so as to ensure that its total income is at least sufficient, taking one year with another, to meet its total expenditure and that its financial solvency is maintained.

(c)    Students’ Union Officers, members of staff, Standing Committees, Student-Run Services, Associated Bodies, Clubs and Societies, and other bodies financed wholly or in part by grant from the Students’ Union shall be subject to the financial controls as set out in these Regulations.

(d)    The Trustee Board shall be responsible for maintaining a sound system of internal financial management and control.

(e)    Subject to any direction by Referenda or Council and subject to the provisions of the Code of Practice, the Trustee Board shall have the power to borrow or raise or secure the payment of money for the purposes of or in connection with the business of the Students’ Union in such manner as the Trustee Board shall see fit without any restriction and in the same manner as an individual may manage their own affairs.

(f)    Subject to any direction by Referenda or Council funds may be invested in a bank, in other interest bearing accounts, in stocks and shares, or in such manner as the Trustee Board shall see fit without any restriction and in the same manner as an individual may manage their own affairs.

(g)    The Trustee Board shall prepare budgets for the entire activities incorporated in the audited accounts at least six weeks before the commencement of the financial year and shall obtain the approval of Outgoing Council and Incoming Council to such budgets.

(h)    The Trustee Board shall provide to Council termly reports of income and expenditure against budget and make such adjustments as are necessary.

(i)    Full financial reports and budgets shall be made available to any full member of the Students’ Union upon request.

(j)    Procedures and practices governing grant allocation beyond those stipulated by the Code of Practice shall be changed only with the prior consent of the Trustee Board.

2    Accounts

(a)    Swansea Metropolitan University Students’ Union’s financial year shall end on 31st July.

(b)    The accounts of the Students’ Union shall be audited annually and within three months of the end of the Students’ Union’s financial year.  They shall be presented for approval at the Annual General Meeting following the financial year end.

(c)    The accounts shall be prepared in accordance with generally accepted accounting principles and be audited by a firm of registered auditors appointed by the Trustee Board at the meeting at which accounts are laid before it.

(d)    The audited accounts shall be made available to any full member of the Students’ Union upon request.

3    Affiliations

(a)    The audited accounts shall include details of all bodies to whom the Students’ Union is affiliated or to whom it has made donations and the sums involved.

(b)    Council shall annually review the list of affiliations at Outgoing Council.

(c)    Council shall ratify all donations prior to payment.

4  Income

(a)    The income of the Swansea Metropolitan University Students’ Union shall consist of grants, subscriptions and donations as well as the revenue from the services provided by the Students’ Union.

5    Associated Bodies, Student-Run Services and Clubs and Societies

(a)    Financial Regulations:
        1.    There shall be a Treasurer, who shall not be in the final year of their course, who shall keep records of all transactions, prepare a statement at the end of the financial year, and be responsible for the observance of all other financial provisions.
      2.    All monies shall be held in accounts at the Students’ Union Treasury and will not earn interest.  Withdrawals may be made only with the authority of the Student Activities Officer or one of the relevant Sabbatical Officers.
      3.    An Associated Body, Student-Run Service, Club or Society may apply to the Students’ Union for grants in accordance with guidelines the Trustee Board shall publish. 
      4.      (i)    Clubs will be allocated a Fundraising Account which will be held for them with the Students’ Union's Bank for the purpose of holding self raised funds. 
         (ii)    The signatories shall be the same as for other Students’ Union accounts and monies withdrawn with the usual authorisation by special arrangement with the Bank.
      5.    Grants from the Students’ Union shall be accounted for separately from other funds.  Expenditure from Students’ Union grant accounts shall be subject ultimately to the approval of the Trustee Board and to the regulations applying generally to the expenditure of Students’ Union funds.  Balances on grant accounts at the end of an accounting period shall revert to Students’ Union general funds.
      6.    Expenditure from non Students’ Union grant accounts (Fundraising Accounts) shall be subject to the approval of the Committee.  Balances on these accounts at the end of an accounting period shall be carried forward to the next period.
      7.    All funds shall be accounted for in an annual financial statement presented by the Treasurer to the Trustee Board.  This statement shall be signed by the Student Activities Officer or one of the relevant Sabbatical Officers, who shall act as auditor.

(b)    Equipment Regulations
      1.    Any goods purchased wholly from a grant provided by the Students’ Union shall belong absolutely to Swansea Metropolitan University Students’ Union.
      2.    Any goods purchased partly from a grant provided by the Students’ Union shall be held in shared ownership with the interest of the Students’ Union being in the same proportion as that in which the purchase money was provided by the Students’ Union.
      3.    The Committee shall have responsibility for goods purchased as described above and shall maintain and preserve them in good repair and condition, fair wear and tear excepted, and shall not deal with them in any way detrimental to the Students’ Union's ownership.
      4.    The Committee shall maintain an up-to-date inventory of such assets on which shall be recorded additions and alterations.  Upon taking up office the Committee shall receive and signify they take responsibility for the inventory and the assets.

6    Financial Controls

(a)    Banking
Funds not required in cash or for investment shall be held at a reputable bank such as Trustee Board shall see fit.

(b)    Authority
        (i)    All drawings on Students’ Union accounts shall require two signatures which should be:-
     (ii)    One of Students’ Union Staff with signatory responsibility, and
     (iii)    One other Sabbatical Officer;
      (iv)    All cheques presented for signature should be accompanied by the appropriate backing documentation.

(c)    Payments
      (i)    Individuals who may authorise payment against Purchase Invoices or Expense Claims shall be as follows:-
          1.    Clubs and Societies:
                   (i)    Either Club/Society Treasurer or Club/Society President or Captain
          2.    Budget:
          (i)    Head of Budget
          3.    Other:
          (i)    Signature of one duly authorised person responsible for that area;           
(d)    Cash
       (i)    All cash shall be receipted without deduction;
       (ii)    A cash float for incidental expenses shall be issued only upon the specific request of an authorised signatory who shall not be the holder of the float;
     (iii)    All petty cash floats shall be maintained upon the imprest system;
      (iv)    No cash payment shall be made without obtaining a proper receipt;
        (v)    No cash payment shall be made in excess of £50, unless specifically approved in advance by an authorised signatory.

(e)    Purchase Orders
      (i)    All orders should be made on official Swansea Metropolitan University Students’ Union order forms.  Orders should be costed, ideally with accurate prices but at least with estimates.  Orders should be signed by the person making the order and by an authorised signatory, as follows:

    Non-A.U. Orders –
      (i)    Either of the Students’ Union staff members with signatory authority;

    A.U. Orders –
      (i)    The Student Activities Officer or one of the Sabbatical Officers, and
      (ii)    Either of the Students’ Union staff members with signatory authority;
   
(f)    Capital Assets and Leases
      (i)    The Trustee Board shall approve the purchase of any item, which shall be considered to be a capital asset, and which shall remain on the balance sheet beyond the current financial year-end;
     (ii)    The Trustee Board shall determine the policy on the rate of depreciation for different classes of capital assets;
    (iii)    The Trustee Board shall approve the acquisition of any asset by way of a leasing agreement over a period of longer than twelve months.

7    RESERVES POLICY

1.1  The purpose of the policy
The proactive management of Reserves and setting of a policy in relation to Reserves is required by the Charities Commission who give the following guidance;

“The Charity Commission is advising all charities to have a reserves policy. This is to help charities secure their viability beyond the immediate future and provide reliable services over the longer term.”

The policy further serves as a prudent approach to ensuring the organisation is able to meet its financial commitments and ensure continuation of services where appropriate.  Examples of situations where reserves are useful,

I.    Meet contractual liabilities should the organisation have to close.      This includes redundancy pay, amounts due to creditors and commitments under leases.

II.    To provide working capital/cash flow when funding is paid in arrears

III.    From time to time funding has certain restrictions which means that by law it must be held in a restricted reserves until it is spent in line with the funding agreement.  The Union currently receives £0 restricted funding.

1.2 Level of Reserves

Operating Reserve
The level of Operating Reserves needed by SMUSU at any one time shall be determined by the costs associated with the situations above and shall be calculated as 3 month’s overheads plus the costs associated with dissolution, determined each year by the Trustee Board.

Project Reserve
In addition to the Operating Reserve the Trustee Board authorises the maintaining of a ‘Project Reserve’ to allow new student led projects to be funded initially to assess sustainability. 

No new project shall be funded from the Project Reserve for more than one year, after this time the Project either becomes funded from ongoing income or is dissolved. 

The Project Reserve shall be no more than 5% of the previous year’s total income.  A process for the distribution and management of this fund shall be agreed by the Trustee Board.

Total Reserve
The total Reserve held by the Union shall be the Operating Reserve plus the Project Reserve.

1.3 Bringing existing Reserves in line with this Policy

The accumulated fund (less fixed assets) of the Union will be determined upon the completion of the 2007/08 audit of accounts.  It is envisaged that this fund will show slightly more funds than the required Reserve.  This being the case the extra funds shall be added to the Project Reserve account for distribution to new projects throughout the year.