Financial Controls and Anti-Money Laundering Policy

 1.  Financial Controls

1.1.         Financial Records and Accounts 

1.1.1    Financial records must be kept so that:

·        The organisation meets its legal and other statutory obligations, such as Charity Acts, His Majesty’s Revenue & Customs, and common law.

·        The trustees have proper financial control of the organisation.

·        The organisation meets the contractual obligations and requirements of funders.

1.1.2    The books of accounts must include:

·        A cashbook (spreadsheet) analysing all the transactions appearing on the bank accounts

·        A petty cash book if cash payments are being made.

1.1.3    Accounts must be drawn up at the end of each financial year within 3 months of the financial year end, presented to the next Annual General Meeting, and submitted to the Charity Commission by October of the following year.

1.1.4    Prior to the start of each financial year, the trustees will approve a budgeted income and expenditure account for the following year.

1.1.5    A report comparing actual income and expenditure with the budget should be presented to the trustees every three months or whenever meetings take place.

1.1.6    The AGM will appoint an appropriately qualified auditor/ independent examiner to audit or examine the accounts before presentation to the next AGM.

1.2.         Banking 

1.2.1.  The Charity will bank with Lloyds Bank plc and accounts will be held in the name of Odyssians. The following accounts will be maintained:

·        General Account

·        32-day notice account (reserves) 

1.2.2.  The bank mandate will consist of a list of a minimum of 4 Trustees or other Officials of the Charity who can sign cheques and authorise online transactions on the organisation’s behalf. The list of authorised signatories will always be approved and minuted by the trustees as will any changes to it.

1.2.3.  All transactions will be authorised by any two of the authorised signatories, either electronically or by cheque. A cheque must not be signed by the person to whom it is payable.

1.2.4.  The charity will require the bank to provide access to online banking to the Treasurer, Chair and two other Trustees for the purpose of scrutinising the transactions on the bank accounts and performing transactions duly authorised by the Board of Trustees. The statements will be reconciled with the cash book at least every three months and the treasurer will spot-check that this reconciliation has been done at least twice a year.

1.2.5.  The Charity will also use PayPal to receive payments for applications to attend our annual camp and other events. The Treasurer will ensure that the PayPal credit balances are moved to the General Account with Lloyds at least once every calendar month, subject to holding with PayPal a minimum balance to be agreed by the Trustees.

1.2.6.  The Charity will not use other financial institutions save Lloyds Bank plc and PayPal, nor use overdraft facilities or subscribe to lending facilities without the agreement of the Board of Trustees.

1.3.         Income 

1.3.1.  All monies received will be recorded promptly in the cash analysis book and banked without delay (this includes sundry receipts such as payment for telephone calls, photocopying etc.). The Charity will maintain files of documentation to back this up.

1.3.2.  All donations and grants shall be scrutinised in accordance with the Anti Money Laundering Policy below.

1.4.         Expenditure 

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

1.4.2.   The Treasurer will be responsible for holding the cheque books (including unused and partly used cheque books) which should be kept under lock and key.

1.4.3.  Blank cheques will NEVER be signed.

1.4.4.  The relevant payee's name will always be inserted on the cheque before signature and the cheque stub will always be properly completed.

1.4.5.  No cheques should be signed without original documentation (see below).

1.4.6.  All electronic payments will require two-level authortisation.

1.4.7.  The authorised signatories will check the bank details using the bank’s “account details matching service,” and if necessary, contact the payee to confirm their bank details before approving payments.

1.5.         Payment documentation 

1.5.1.  Every payment out of the Charity's bank accounts will be evidenced by an original invoice (never against a supplier's statement or final demand). That original invoice will be retained by the Charity and filed. The Treasurer should ensure that invoices are reconciled and referenced with:

·        Cheque number / electronic payment number

·        Date cheque drawn / date of transfer

·        Amount of payment

1.5.2.  The only exceptions to payments not being supported by an original invoice are Items such as advanced booking fees for a future course, deposit for a venue, etc. Here a payment requisition form will be used.

1.5.3.  Petty cash will always be maintained on the imprest system whereby the Administration Worker is entrusted with a float as agreed by the trustees. When that is more or less expended, a cheque will be drawn for sufficient funds to bring up the float to the agreed sum, the cheque being supported by a complete set of expenditure vouchers, totalling the required amount, analysed as required.

1.5.4.  Expenses / allowances. Odyssians will, if asked, reimburse expenditure paid for personally by Trustees and volunteers providing:

·        Fares are evidenced by tickets.

·        Other expenditure is evidenced by original receipts.

·        Car mileage is based on local authority scales.

1.5.5.  No signatory should authorise the payment of expenses to themselves.

1.6.         Other rules

1.6.1.  The Charity does not accept liability for any financial commitment unless properly authorised. Any orders placed or undertakings given which are likely to cost the Charity in excess of £50 must be authorised and minuted by the trustees.

1.6.2.  In exceptional circumstances such undertakings can be made with the Chair's approval who will then provide full details to the next meeting of the trustees. (This covers such items as the new service contracts, office equipment, purchase, and hire).

1.6.3.  All fundraising and grant applications undertaken on behalf of the organisation will be done in the name of the Charity with the prior approval of the trustees or in urgent situations the approval of the Chairperson who will provide full details to the next trustee's meeting.

1.6.4.  The Charity will adhere to good practice in relation to its finances at all times, e.g. when relevant it will set up and maintain a fixed asset register stating the date of purchase, cost, serial numbers, and normal location of assets. Additionally, the Charity will maintain a property record of items of significant value, with an appropriate record of their use.

2.  Money Laundering

2.1.    Definition

2.1.1.  By definition, money laundering is the practice of cleaning up money that has, for some reason, been obtained illegally. Often there is a complex trail involved so that the practice cannot be easily identified or traced.

2.1.2.  Money laundering can occur in many ways. It may happen by dispersing money through many different bank accounts (to hide its origins) but can occur when the charity is used unwittingly as a “trading partner.” This could be directed at the charity or through an organisation where we have a close relationship, such as a funder.

2.2.    Procedures

2.2.1.  The Treasurer acts as the money laundering reporting officer (MLRO) to receive disclosures from anyone involved in the charity of any suspected money laundering activities. The Chair will act as a temporary MLRO if the MLRO is not available.

2.2.2.  The MLRO will be responsible for conducting the charity’s anti-money laundering procedures.

2.2.3.  The MLRO will ensure that proper records are maintained on all the relevant activities and steps taken to deal with them.

2.3.    Due diligence

2.3.1.  The charity should conduct procedures that help to identify donors or other providers of income before entering into a relationship or transaction with them.

2.3.2.  The charity should, where applicable:

·        Identify the donor and verify their identity,

·        Take adequate measures where some donors need or want their privacy,

·        Accept that in some cases, the identity of the donor may not be easy to verify, in which case other measures need to be developed,

·        Continuously monitor the situation, and,

·        Maintain proper records of all checks made.

2.4.    Policy on disclosure

2.4.1.  If anyone knows, suspects, or has reasonable grounds for thinking or suspecting that a person is engaged in money laundering or terrorist financing, they must report such matters to the MLRO immediately. Disclosure should be made on a standard form available from the MLRO which requires:

·        Details of the people involved

·        Type of transaction

·        The relevant dates

·        Why there is a suspicion

·        When and how activity is undertaken

·        Likely amounts

2.4.2.  The MLRO will acknowledge receipt of the disclosure within an agreed response period.

2.4.3.  The MLRO will consider the report and any other information available.

2.4.4.  Once the MLRO has evaluated the disclosure or other information, they will determine if:

·        There are reasonable grounds for suspecting money laundering and the steps to be taken, or

·        There is actual money laundering or terrorist financing, and

·        Whether they need to report the matter to the National Crime Agency (NCA) https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/money-laundering-and-illicit-finance/suspicious-activity-reports.

2.4.5.  All disclosure reports referred to by the MLRO and reports made by them to the NCA will be retained for a minimum of 5 years.

If you have any questions regarding this policy, please use our Contact Us form.

[This policy was last reviewed and updates August 2024]