UNISON

BRANCH FINANCES HANDBOOK

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

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

Foreword

4

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

Contents

6

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

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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.

Managing your budget 2

16

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

3 Financial reporting

17

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.

Financial reporting 3

18

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

4 Accounting processes, procedures and records

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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.

Accounting processes, procedures and records 4

20

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.

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.

26

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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7Internal control

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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Internal control7

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.

ProducedbyUNISONCommunications.PublishedandprintedbyUNISON,1MabledonPlace,LondonWC1H9AJwww.unison.org.ukCU/MAY2011/19960