Financial procedures and controls are essential to any organisation, whether it is a commercial undertaking or a not-for-profit. They safeguard the organisation from accidental loss or from fraud, they facilitate the development of clear policies and procedures, and they help its members to understand their responsibilities in the day-to-day running of the organisation.
A financial procedures manual brings all these together in one document. It helps to establish financial controls within the organisation that ensure accuracy, timeliness, and completeness of financial data.
The Scout Group Charter sets out that:
- The Scout Group shall be registered with the Charities Regulator and shall register with Scouting Ireland annually to renew the Scout Group Charter.
- The Scout Group Council shall file its annual report and accounts (where necessary) with the Charities Regulator in the form required and shall also file an annual report, in an agreed format, with Scouting Ireland which will incorporate the accounts of the Scout Group for the financial period that the annual report relates to.
- The Scout Group Council shall observe all policies and procedures of Scouting Ireland, insofar as they affect the management and the operation of the Scout Group.
The Group Treasurer is responsible for the maintenance of the bank accounts as well as income and expenditure accounts. In addition, the Group Leader with the Group Council has responsibility for the day-to-day running and management of the Scout Group.
The following guidelines appear to be worth considering.
Financial Records
In addition to maintaining a book of accounts, it is advisable that all Scout Groups maintain a summary document that states the following:
- The start and end dates for the Scout Groups financial year
- A listing of all bank accounts / credit union accounts and other accounts held by the Scout Group
- A record of the current mandates for each of the Scout Group accounts
Bank Mandates
Bank Mandates should be retained for all bank accounts. The bank mandates should show; cheque signatories for each account, financial limits for each cheque signatory, authorised officers for transferring funds between accounts/forms of investments and financial limits. Authorisation levels should be reviewed annually.
Bank Reconciliation
Bank reconciliation should ideally be prepared for each bank account at the end of each month by the Group Treasurer. Copies of the bank reconciliation should be printed and reviewed by the Group Leader. After review, the Group Leader should sign the reconciliation and return it to the Group Treasurer for filing.
Receipts
Upon receipt of funds, a banking deposit slip should be created detailing the amount received and whom the funds were received from. All amounts received should be banked intact. Payment of expenses should not be made from funds received. Any remittance advices or other documents accompanying the receipt should be retained and filed.
Authorising and Reviewing Expenditure invoices
Upon receipt of invoices, the Group Treasurer should review the invoice, match with a purchase order (if applicable), investigate any discrepancies and check that it is authorised for payment in accordance with the Scout Group budget and on authority of Group Council.
Payments
All payments made by cheque must be signed and authorised as per the bank mandate. Blank cheques should never be signed. The signing limits on the bank mandate should be reviewed at least annually.
Direct Debits and Standing Orders
Group Council should approve any direct debit or standing orders. Invoices paid by direct debit or standing orders should be reviewed and authorised annually.
Expenses
Members of the Scout Group should be required to complete an expenses claim form for all items for which they require to be reimbursed – ideally expenses should be agreed with the Group Leader or Group Treasurer in advance.
Purchase Orders / Tendering Procedures
For the supply of goods or services with a value of greater than €250* but less than €5,000* it is worth having a process in place that details the quotes obtained and that the spend has been authorised by Group Council. It may be worthwhile to put a purchase order system in place to keep track of these expenses and to ensure that the amount that has been invoiced to the Scout Group is the correct amount as agreed.
Any purchases of €5,000* or more (in total) with a single supplier should be submitted to tender. Specifications for the purchase should be drawn up and approved by Group Council. Where possible a minimum of three written quotes should be obtained. Members with a financial interest in the tendering process should not be involved in the evaluation process.
Each quote should be reviewed and graded using the following criteria:
- Value for money
- Quality of goods/service provided
- Reputation of supplier
- Delivery or completion date
- Maintenance, repair or support facilities
All documentation generated as part of the tender process should be retained.
* Sums marked with an asterisk are indicative only, each Scout Group Council should decide on limit which is appropriate to their circumstances.
Budgets and Forecasts
Budgeting for your Scout Group has become essential in order to ensure that you have adequate funds for necessary expenditure, including the upkeep or rental of Scout Den / meeting place, training of youth and adult members, the purchase of equipment, and the purchase of programme materials.
It is advisable to prepare a detailed budget for each year of operation. This budget should be signed off by Group Council. Reviews should take place at least quarterly and the outcomes should be reported to Group Council.