Internal Financial Controls

1.1Introduction

1.1 Financial records will be kept so that Adopt NI can:

a) Meet its legal and other obligations e.g. Charities Acts, Inland Revenue, Customs & Excise, Companies Act, Common Law;

b) Enable the Committee to have control of Adopt NI’s finances;

c) Enable Adopt NI to meet contractual obligations and requirements of funders.

1.2 Adopt NI will keep proper books of accounts, which will include:

a. A cashbook or appropriate computerised system analysing all the transaction in Adopt NI’s bank account(s);

b. A petty cash book if cash purchases are made;

c. Inland Revenue deduction cards (P11) for employed staff.

1.3 Accounts will be drawn up within six months of each financial year-end and presented at the next Annual General Meeting.

1.4 Before the start of each financial year, the Committee will approve a budgeted Income and Expenditure Account for the following year.

1.5 A paper comparing actual income and expenditure with the budget will be presented to the Management Committee quarterly.

1.6 The AGM will appoint an appropriately qualified auditor to audit the accounts for presentation to the next AGM.

2 Bank

2.1 Adopt NI bank with The Northern Bank Plc at its Lisburn Road Branch where the accounts will be in the name of Adopt NI. The following accounts will be maintained - the No 1 Account (Current), No 2 Account (Conference) and No 3 Account (Fundraising).

2.2 The Bank Mandate (list of people who can sign cheques on Adopt NI’s behalf) will always be approved and minuted by the Management Committee, as well as any changes to it.

2.3 Adopt NI may operate online banking at the approval of the Management Committee. This decision must be minuted.

Patrons: Lady Elizabeth Bloomfield First Floor, Imperial Buildings, 72 High Street, Belfast, BT1 2BE & Sean Rafferty T: 028 9031 9500 E: [email protected] W: www.adoptni.com Company No: NI 50259 Supported by: DHSSPSNI and NIHSCB Charity No: XR16047 2.4 Adopt NI will require the bank to provide statements every month for the current account and quarterly for all other accounts and these will be reconciled with the cash book on a monthly basis. The Treasurer will spot check that this reconciliation has been done at least twice a year, and sign the cashbook.

2.5 Adopt NI will not use any other banks or financial institutions or use overdraft facilities or invest speculatively unless authorised, approved and minuted by the Management Committee.

3 Receipts (Income)

3.1 The aim is to demonstrate that Adopt NI has received all the income to which it is entitled and that it is all reasonably evidenced.

3.2 All monies received will be recorded promptly in the Cash Analysis Book or appropriate computerised system and banked immediately (note this includes sundry receipts such as payment for telephone calls, photocopying etc). Adopt NI will maintain files of documentation i.e. letters from funders to back this up.

4 Payments (expenditure)

4.1 The aim is to ensure that all expenditure is on Adopt NI’s business and is properly authorised and that this can be demonstrated. The latest approved budget provides the cheque signatories with the authority to spend up to the budgeted expenditure, not beyond it.

Cheques: 4.2 A person or persons nominated by the Management Committee will be responsible for holding the cheque book (unused and partly used cheque books), which should be kept under lock and key.

4.3 Blank cheques will NEVER be signed.

4.4 Different people should be responsible for each of the following activities; ordering goods and services, processing and checking invoices, raising cheque requisitions, signing cheques and authorising payments. Where staffing resources make it impracticable the highest degree possible of segregation of duties should be maintained.

4.5 In exceptional cases cheques may be signed where the payee is written in but the amount is left blank, provided that the cheque is crossed “NOT TO EXCEED £500”.

4.6 No cheques will be signed without the original documentation (see below).

Online banking/eBanking: 4.7 A person or persons nominated by the Management Committee will be responsible for operating the eBanking service to transfer monies between accounts and make payments online; this decision should be minuted. The Bank Agreement (stating the nominated user, the terms and conditions and the user e-safekey agreement) should be signed by the Chairperson and another member of the Management Committee and kept in the No 1 Bank Account file.

4.8 Different people should be responsible for each of the following activities; ordering goods and services, processing and checking invoices, raising cheque requisitions and making online payments. Where staffing resources make it impracticable the highest degree possible of segregation of duties should be maintained.

4.7 No online payments will be made without the original documentation (see below).

4.8 Money will only be spent to meet conditions and requirements of funders within the objectives of the constitution.

4.9 The Chairperson and/or the Treasurer with (in either case) one other committee member may approve expenditure of not more than £2000 or an overspend on a particular budget heading of not more than 5% so long as this approval is written down, signed by both people approving it and reported to and minuted at the next Management Committee meeting and the next full Trustee meeting.

5 Payment and Documentation

5.1 Every payment out of Adopt NI’s bank accounts will be supported by an original invoice (never against a supplier’s statement or final demand). The original will be filed and kept for seven years. The person who signs the cheque or makes the online payment should ensure that the issue of the cheque or online payment is recorded by, for example, ensuring that the following is written on the invoice or cheque requisition slip: cheque number, date cheque drawn or online payment actioned, amount of cheque or online payment, who signed the cheque or who actioned the online payment and/or who approved the payment.

5.2 The only exception to a cheque or online payment not being supported by an original invoice would be for such items as advance booking fees for a future course, etc. Here a cheque requisition form or notice of online payment will be used. Clear records should be kept as well as copies of backup documentation.

5.3 Petty cash will always be maintained on the imprest system whereby the regional manager is entrusted with a float of £50 as agreed by the Management Committee. When that is more or less expended, a cheque will be drawn for an amount sufficient to bring up the float to the agreed sum, the cheque being supported by a complete set of expenditure vouchers and where possible, receipts totalling the amount spent. The expenditure will be analysed in the petty cash book.

5.5 All staff appointments must be made with the authority of the Management Committee, minuting the dates and salary level. Similarly, all changes in hours and other payments such as overtime etc will be authorised by the Management Committee.

5.6 Staff may be reimbursed for expenditure actually incurred in the course of their employment, providing: a) Fares are evidenced by tickets; b) Original receipts evidence other expenditure; c) Car mileage is based on NI Civil Service rates or alternatively organisational rates, where these exist.

5.7 Wages and Salaries - There will be a clear trail to show the authority and reason for every payment. Each payment will be recorded by, for example, having a cheque requisition slip / notice of online payment showing who has authorised the payment and what it is for, i.e. salary, temporary work, Inland Revenue, etc. All employees will be paid within the PAYE National Insurance rules.

6 Payroll Policy

6.1 Payroll Processor - A person nominated by the Management Committee will process the payroll for the organisation and the nomination of that person will be minuted at a committee meeting.

6.2 Job Description & Contract of Employment - Each employee will receive a job description and contract of employment. The contract of employment will be provided no later than 2 months after the taking up post.

6.3 Equality - In line with the Equal Pay Act 1970, as amended by the Equal Pay (Amendment) Regulations (NI) 1984, Adopt NI will ensure the provision of equal pay and conditions to all workers, men and women, who are engaged in:  the same or like work;  work of equal value;  work rated as equivalent in the same employment.

The Equal Pay Regulations do not apply in the following cases:  where Adopt NI can show that the variation in pay is genuinely due to a material factor other than gender, eg location.  where the terms of employment afford special treatment to a woman in connection with pregnancy or childbirth, such as maternity leave.

6.4 Salary Structure - Adopt NI’s salary structure will be based on the following values:

Fairness Adopt NI’s process for determining remuneration organization-wide should be fair to staff of all levels and grades, as well as to other stakeholders including users, trustees and funders. It should be universally viewed as an equitable means of determining rewards based on relevant factors, which are non- discriminatory on grounds of gender, race, disability, age etc. By no means should the pay of any single post be or seem to be excessive in relation to that of others. In cases where it is necessary to pay premium rates in order to attract the caliber of individual needed for a job, such as qualified IT professionals, differentials should be based on valid and, where possible, quantifiable data such as industry survey data. Openness Adopt NI’s process for determining remuneration must be an open one. Adopt NI should be prepared to demonstrate that they have nothing to hide and that the process of determining reward levels is open to informed debate. Objectivity Adopt NI’s process of determining remuneration should be objective. To this end, Adopt NI should, using a job evaluation scheme, establish objective criteria that enable comparisons to be made between jobs within the organization and with those in comparable organizations. Pay-related decisions should be consistent and made to a common standard. Responsibility Adopt NI’s process for determining remuneration must be legally responsible, taking into account basic statutory requirements for fairness, non- discrimination, and the minimum wage. The process should also be socially responsible incorporating core values into their salary structures, values that reflect Adopt NI’s beliefs in equity and social justice, for instance. Effectiveness Adopt NI’s process for determining remuneration should allow the organization to attract the caliber of people required to deliver the objectives and advance the mission. Adopt NI needs trained professionals in order to carry out its work – and it must be prepared to pay them fairly and competitively. Operating salary structure Adopt NI will operate a salary structure based on the National Joint Council (NJC) Scale. All Adopt NI’s employees will receive an annual pay review which should take into consideration and reflect, any increase in the cost of living, changes in employee’s duties/responsibilities/hours or pattern of work. Changes to employee’s duties etc should be reflected in their job description, and contract of employment (if necessary).

6.5 Pay slips/Itemised Statements - In accordance to Article 40 of the Employment Relations (NI) Order 1996, Adopt NI will provide all employees with a pay slip/itemised statement of pay detailing:  gross earnings  net pay  amount of any deductions  how the wage/salary is calculated Adopt NI will ensure employees receive their payslip prior to receiving their monthly salary.

6.6 Deductions from/Additions to pay - Adopt NI may only make deductions from an employee's wages where:  it is required or authorized under a statutory provision  it is authorized under a provision in the employee’s contract  it has been agreed in writing by the employee  there is a court order, eg attachment of earnings National Insurance - Adopt NI will: • provide the appropriate National Insurance (NI) payments on a monthly or quarterly basis to the Collector of Taxes in respect of both employer and employees • make all such payments to the Inland Revenue within fourteen days of the end of the income tax month or quarter (or other pattern of frequency agreed with the Collector of Taxes) and incorporate with the monthly Pay As You Earn Income Tax (PAYE) return • note the deductions for NI and PAYE separately on an employee’s payslip • calculate contributions with reference to the contributions table available from local Social Security offices or by using up-to-date payroll software • note all such payments made on an employee’s behalf on a Form P11 (manual/computerised). Deductions for NI contributions must appear separately on employee pay slips/itemised statements. Pay as you Earn - Adopt NI will collect and account for each employee’s income tax by deducting the required amount from an employee’s gross pay and giving it to the Inland Revenue as Schedule E tax. The amount deducted must appear separately on employee pay statements.

Tax Credits – according to The Tax Credits (Payment by Employers) Regulations 1999 Adopt NI will cover the arrangements for tax credits to be paid directly to an employee by Adopt NI.

6.7 Payroll Calculations - The payroll processor will calculate the salaries using either the manual method or computerised payroll software such as that supplied by the Inland Revenue. All payroll calculations will be manually recorded on a P11 or using computerised payroll software. The Treasurer will check payroll calculations at the beginning of each financial year and check payments on a bi-monthly basis.

6.8 Record Keeping - Adopt NI will keep the following records regarding pay and remuneration:  P11 - deductions working sheet – a rolling month-by-month record of an employee’s PAYE and NI contributions, including details of payments such as sick or maternity pay  P14 - end of year return – a triplicate annual declaration of an employee’s PAYE,  NI contributions and other details of total payments made to employee, total net tax, employer’s name and address and employee’s name, NI number and tax code (P60)  P15 - coding claim form – issued to employees who do not provide a P45, this form enables the Inland Revenue to establish their correct tax code  P38(S )- employment of students – allows organizations which employ students for vacation work to avoid deducting PAYE or NI contributions from their wages unless they earn above the lower earnings limit  P45 - details of employee leaving, triplicate form completed by the organization for each employee who leaves their employment, stating the earnings and deductions since the beginning of the current tax year to the date of leaving  P46 - PAYE codes – employees must fill in this form if they fail to produce a P45  P47 - application to refund tax – to be completed by employees who are eligible for a tax refund exceeding £100. Refund will be made on a P48 form  P50 - tax payment – to be completed by employees who leave but do not go directly to another job. Employers are only responsible for issuing this form  P85 - employees leaving the country – issued to employees who are leaving the UK for any reason so that they may reclaim, or be relieved of, income tax payments  P160 - retirement on pension to be submitted to Inland Revenue by the employer within fourteen days of an employee retiring on a pension paid by the employer or on behalf of a superannuation fund or scheme.

6.9 Payment of Employees - Employees should be paid monthly on the last Friday of the month either by cheque or by bank transfer.

7 Payroll Procedures

7.1 All staff appointments must be made with the authority of the Management Committee, minuting the dates and the salary level. Similarly, all changes in hours and other payments such as overtime etc will be authorised by the Management Committee.

7.2 A personnel file will be opened for each employee detailing their: name, address and telephone number; start/leave date; job title (indication part/full- time and permanent or temporary); hours & pattern of work; starting salary; National Insurance number; information on P45/completion of P46); method of payment of salary; bank details.

7.3 The payroll processor will operate the Inland Revenue’s software to calculate the payroll.

7.4 The Treasurer will check payroll calculations at the beginning of each financial year and will check salary payments on a bi-monthly basis (at committee meetings).

7.5 To facilitate the PAYE System, Adopt NI will obtain employees’ tax code from either:  P45 certificate or  submitting a P46 to the local office of the Inland Revenue.

7.6 Where a tax code is temporarily unavailable, Adopt NI may use an emergency tax code operated on a month-one basis. Where this contribution rate turns out to be too high, the employee should be remunerated for the overpayment by applying for a refund on a P47 form.

7.7 Employees will be paid monthly, on the last Friday of the month, and will receive a payslip prior to the salary cheque/online payment reaching the employee’s bank account. 8 Cheque Signatures

8.1 Each cheque will be signed by at least two people.

8.2 A cheque must not be signed by the person to whom it is payable.

9 Other Undertakings

9.1 Adopt NI does not accept liability for any financial commitment unless properly authorised. Any orders placed or undertakings given, the financial consequences of which are prima facia, likely to exceed a total of £200 must be authorised by the Treasurer and minuted. (This covers such items as the new service contracts, office equipment, purchase and hire of any item.)

9.2 All fund raising and grant applications undertaken on behalf of the organisation will be done in the name of the organisation with the prior approval of the Management Committee or in the event of something urgent arising, with the approval of the chairperson, who will provide full details to the next meeting of the Management Committee.

10 Confidentiality

10.1 Financial circumstances of employees will be respected at all times subject to current legislation.

10.2 Committee members, volunteers and employees will not disclose confidential information and are required to exercise discretion at all times in respect of sensitive information to which they have access. Conflicts of interest must be declared to the regional manager or Management Committee immediately.

11 Other Rules

11.1 At the AGM every year, the Trustees will consider the level of reserves that is prudent for the charity to have. Consideration will be given to redundancy liabilities, lease agreements, and any other significant factors that should be taken into account were the charity to close.

11.2 Adopt NI will adhere to good practice in relation to finance at all times e.g. where relevant, it will set up and maintain a fixed asset register, stating the date of purchase, cost, serial numbers and normal location of the asset(s). If it holds stocks of goods, e.g. books etc, of significant value, it will maintain proper records.