Financial Regulations

BARNSBURY HOUSING ASSOCIATION
FINANCIAL REGULATIONS

SECTION 1 - INTRODUCTION
1	The purpose of these Financial Regulations is to set out the principal policies and procedures to be followed by all staff and Board members when dealing with the financial affairs of the Association.
2	It is the responsibility of the Chief Executive to ensure that all staff act in accordance with these regulations. It is the responsibility of the Chairman to ensure that Board members are aware of these regulations and observe them. The Chief Executive may delegate such tasks as may appear appropriate from time to time except where an individual is specifically named in these regulations.
3	Each member of staff will be advised of the existence of these regulations and a copy will be held in the office. A copy of these regulations will be made available to each Board member. These regulations have been approved by the Board of Management (“Board”) and will be regularly reviewed by them. The absence of such a formal review will not cause these regulations to lapse.

All orders must show either the agreed price or, in cases where this is not practicable, the estimated price. In the event that the subsequent invoice does not accord with the agreed price or exceeds an estimate by more than 10%, the reason for this should be identified and noted on the order before payment is made.

All orders must be listed in the Order Log Book stating the number of the official order form (appendix 1), the date, the supplier and the estimated cost. Orders placed by phone should be confirmed by fax the same day.

Orders of up to £1,000 (including VAT) may be signed by any member of staff, within delegated authorities agreed by the Chief Executive.

Official orders of more than £1,000 (including VAT) must be approved by the Chief Executive.

SECTION 5 - TENDER AND QUOTATION PROCEDURES

General Policy
The Association will follow good practice in selective tendering including reference to published guidance by the Housing Corporation where appropriate.

Placing of Orders or Contracts
The procedures to be followed in respect of the placing of orders or contracts will depend on the anticipated amount of the order or contract, as follows:

a)	Below £4,000* - the relevant authorised staff have discretion to decide whether competitive quotations are obtained.
b)	Up to £10,000* - at least three competitive quotations will normally be obtained and a record of quotations be kept.
	Exceptions to seeking competitive quotations must be approved by the Board. This exception may be on a general basis (e.g. all computer equipment provided by a specific supplier) or for a specific order.
c)	Above £10,000* - the Association's full tendering procedures (see below) must be followed.
*	All figures to include anticipated VAT at current rates

Tender Procedures
All tenderers are to be provided with two standard Barnsbury Housing Association issue tender envelopes in which to return their tender. The inner envelope should have the name of the project and the tenderer identified and with the signatures of two Board members. The outer envelope should have two stickers - one “DO NOT OPEN” – TENDER FOR “PROJECT NAME” and the second with Barnsbury Housing Association's full address. The person inviting tenders is responsible for ensuring that the tenderers:-

a)	Have the correct documentation with which to submit tenders.
b)	Receive invitations to tender, which are clear and unequivocal in their instructions.
c)	Are fully aware of the Association's tender procedures and Barnsbury Housing Association's tender rules which are set out below in appendix 1 to this section.

SECTION 5 - TENDER AND QUOTATION PROCEDURE
APPENDIX 1 to section 5

Where tender invitations have been dispatched to tenderers, the person inviting tenders is to notify the Association's Chief Executive officer within 48 hours, advising of the following matters:-

a)	Title of project/work tendered.
b)	Last date and time for tenders to be received.
c)	Preferred date, time and location for tender opening.
d)	Expected tender amount.
e)	List of organisations invited to submit tenders.
f)	The name of the member of the Association's staff and the name of any consultant who will be attending the tender opening.
g)	A contact for the Chief Executive for the period of the tender process.

The Chief Executive will:

a)	Arrange for personnel (see para 7 below) to be present at the preferred tender opening date/time, liaising with the person inviting tenders as necessary.
b)	Enter the same details identified above on the front of a large envelope, which will be used to hold all tenders received for the project/work.

Telephone or postal queries from tenderers during the tender period are to be referred to the person inviting the tender. File notes of any such conversations are to be made.

Receipt of tenders.

a)	All tenders received by reception staff at Barnsbury Housing Association's office are to be date stamped on the outer envelope by the reception staff, who will append their initials and the exact time that the tender was received. The envelope must be left sealed.
b)	Tenders which are not presented to reception staff strictly in the usual manner, should be date stamped as above and then referred to the Chief Executive for advice.
c)	Tenders returned in the normal way will be date stamped and kept in the safe.
d)	Tenderers who have not responded by the day before the closing date, or earlier, may be chased either directly or via consultants.
e)	Any tenders received beyond the time for receipt of tenders are to be date stamped via reception staff in the usual way and passed to the Chief Executive. The Chief Executive is to clearly identify and record the late receipt of the tender and ensure that the person inviting the tenders is aware of the fact prior to tender opening.

Tender opening.

a)	Prior to tender opening, the person inviting tenders will write up the tender book, recording the estimated price of the work being tendered (where possible), so that tender details can be quickly inserted at the meeting.
b)	When the tender opening panel have assembled, the consultant, if present, is to be asked to briefly describe the scheme.
c)	Tender envelopes are opened under the direction of the Chief Executive (or senior person present) taking care to ensure that the inner signed envelope has not been tampered with in any way. The name of each tenderer and the tender amounts are to be read out and the tender results are to be recorded in the tender book
d)	Each form of tender is to be checked by another member of the panel, stamped and initialed by all those present.
e)	Any additional notes on the form of tender, discrepancies, incomplete tenders or any other unusual matter is to be identified and recorded in the tender book.
f)	Any remarks about each tender may also be recorded.
g)	Any late tenders received may only be opened at the discretion of the senior personnel present.
h)	All present at the tender opening are to sign the tender book and a red line should be ruled under the concluding remark in the tender book.

The person seeking the tenders is to :-

a)	Take with him/her all the tender documentation received. Details should be photocopied, and the photocopied details given to the consultant. The original form of tender should be filed on the project file.
b)	Photocopy the relevant page from the tender book for the project file.

Personnel to be present :-

a)	In all cases when a tender is opened there should be at least three personnel present, to be made up of the Chief Executive, or a member of the Board or the Finance Officer plus two other members of staff .
b)	In addition, it may be considered appropriate to invite consultants.

Acceptance of tenders

a)	After the opening of the tenders, the consultant(s) should be asked to prepare a report on the tender, together with a recommendation
b)	Following receipt of the consultants' report, the Chief Executive should provide a report to the Board, with a recommendation for the Board's formal approval.
c)	The Association will normally accept the lowest overall price (inclusive of any VAT). Any proposal to accept other than the lowest tender must be approved explicitly by the Board.
d)	After a tender has been accepted each of the unsuccessful tenderers should be written to and thanked for taking part. They should also be informed of the prices submitted by all tenderers (but not their names), including the price of the successful tender.

Other points to note:-

a)	The tender books must be kept under lock and key.
b)	Only tenders received in Barnsbury Housing Association's special tender envelopes will normally be considered.
c)	Identifying the name of the tenderer on the outer envelope is an infringement of Barnsbury Housing Association's tender rules.
d)	Only tenders received using the form of tender provided will normally be considered.
e)	Any additional comments added to the form of tender (apart from the details requested) may invalidate a tender.
f)	Any additional documentation sent with the form of tender may invalidate the tender.
g)	Only tenders received at the reception at Barnsbury's office by the date and time identified will normally be considered.

SECTION 6 – PAYMENTS

Apart from petty cash expenditure, the normal method of payment of money due from the Association will be by cheque drawn from the Association's bank account.

The member of staff responsible for issuing an order will also be responsible for ensuring that the examining, verifying and certifying of the related invoice is carried out prior to payment. The members of staff authorised to approve payments are the same as those authorised to issue orders.

The approval of an account for payment will be evidenced by the relevant member of staff signing the account. The signing of an invoice/account for payment means that:-

a)	The goods have been duly received, examined and approved in accordance with the specification, that the goods are satisfactory, and that the prices are in accordance with the contract or order.
b)	The work done or services rendered have been satisfactorily carried out, that where applicable the materials used were of the requisite standard, and that the charges were correct.
c)	The account is arithmetically correct.
d)	No other account or invoice has been paid in respect of that element of the goods received or work done.
e)	The relevant expenditure has been properly incurred on behalf of the Association.

When the invoice is received, and has been approved for payment, the order will be endorsed to that effect and will be filed in the paid orders file.

Directions will be specified on all orders that invoices should be sent to the Association's offices. Invoices must not be made out by employees of the Association on behalf of suppliers.

All statements should be sent direct by suppliers to the Association's office, where they should be checked by the Finance Officer and filed for future reference.

Subject to agreed terms, it is the Association's policy to make payments to suppliers on the 25th of the month following the month of supply. The date on the invoice should be the date the goods were supplied or the service rendered. In the event of predating of invoices by suppliers, the correct date of receipt should be recorded on the invoice by the person approving it, and the error should be brought to the notice of the supplier.

The principal exceptions to the above payment terms are as follows:-

a)	Capital works. These will be paid by the contractual date, which will be either 14 or 21 days after the issue date of the certificate, unless otherwise stated.
b)	Utilities (gas, telephone, electricity) These will be paid by the contractual date, which will be either 14 or 21 days after the issue date of the certificate, unless otherwise stated.
c)	Business rates and water rates. These will be paid by the due date or by the last date for which discounts can be claimed.
d)	Government demands, taxes etc., These must be paid by the due date.
e)	Standing orders & direct debits These will have been approved at the time set up by a person with appropriate authority.
f)	Others Any other exception that may be agreed from time to time by the Chief Executive.

It is the responsibility of the Association's Finance Officer to ensure that the regulations in connection with the construction industry's deduction scheme are complied with.

SECTION 7 - PETTY CASH

The purpose of having petty cash in the office is to enable the Association to meet minor payments that cannot reasonably be made by cheque, either because the sum involved is too small or because the supplier will not allow credit. Petty cash is relatively burdensome administratively, involving as it does trips to and from the bank. Cash is also risky to hold in any quantity.

Use of petty cash should therefore be kept to a minimum.The following procedure should be followed:-

The petty cash should be kept in a locked tin at all times and should be under the sole control of the member of staff designated by the Chief Executive, the Petty Cashier.

When the office is closed, the petty cash should be kept in the safe.

The petty cash should be kept on an imprest system, that is to say, the amount paid out on any cheque topping up petty cash should be equal to the expenditure incurred since the last top up, thus returning the float to the prearranged level. It follows from this system that the sum of the cash in the float plus the vouchers for payment should always equal the agreed level of the float.

The level of the float is to be £200. It can be varied at any time on the authority of the Chief Executive. The variation must be subsequently reported to the Board .

Each time cash is drawn from the float, a petty cash slip (of the type widely available from commercial stationers) should be completed showing the detail of the expenditure incurred and the amount. Wherever possible, a receipt of some sort should be attached. The slip should be signed by the member of staff issuing the cash as well as by the member of staff receiving it. Since Barnsbury Housing Association is a small organisation, this may be one and the same person, in which case, he/she should sign in both places.

A petty cash book should be maintained in duplicate using a standard duplicate book. Whenever a payment is made from the float, the date, the details of the payment, the amount paid and the amount of the float remaining should be entered into the petty cash book.

No member of staff other than the Petty Cashier should have access to the petty cash float.

If it should be necessary to draw funds on account, for instance to go to a supplier, a slip should be prepared as in 5 above, but should be marked “Advance”. When the member of staff returns, he/she should be asked to account for the cash taken and the original slip removed.

When the float is to be replenished, the cash remaining should be counted and compared to the petty cash book by two staff. The book should be signed by the staff concerned, as evidence that this check has been carried out. The float should be replenished by drawing a cheque in accordance with the usual procedures (as set out in section 2 of this manual). In the event of a discrepancy of more than £5 arising, a Board member should be informed.

The float should be checked by the Internal Auditor at least once each quarter.

SECTION 8 - SALARIES & WAGES

Payment of all salaries and wages will be made by the Finance Officer who will be responsible for maintaining appropriate BHA and statutory records.

All amendments to basic weekly or monthly pay and any other significant changes to financial terms and conditions must be authorised by the Board of Management. The authorisation must be evidenced in writing, and recorded on form “Wages 3”, a signed copy of which should be passed to the Finance Officer.

Staff remunerated on a monthly basis will be paid by cheque three working days before the end of the month. Staff remunerated on a weekly basis will be paid in cash each Friday. A salary slip showing gross salary and all deductions must accompany each payment.

All appointments of employees and all payments to employees must be made in accordance with the Association's current conditions of service.

All wages shall be paid through the payroll system, with tax and national insurance deducted as required by law, regardless of how small the amount is or how short the period of employment. Under no circumstances should any wages be paid from petty cash.

SECTION 9 - EXPENSES

Expenses claims must be submitted on a regular basis, but no more frequently than monthly. All claims by employees for payment of car mileage, travelling expenses, subsistence allowances or any other incidental expenses shall be submitted to the Chief Executive. Certification of a claim by an employee will be taken to mean that all journeys are authorised and that the expenses were properly incurred on the business of the Association.

All expenses must be authorised by the Chief Executive, apart from his own expenses, which must be authorised by an officer of the Association (Chair, or other such delegated Board member).

All expenses paid to Board members must be authorised by the Chief Executive, and checked quarterly by the Internal Auditor.

Under no circumstances may anyone authorise their own expenses.

Where a member of staff expects to incur significant expenses in the course of the Association's business, the Chief Executive may issue an advance upon request. In such cases the member of staff concerned must account for the expenditure and claim or repay any balance at the earliest opportunity.

SECTION 10 – BANKING

The Association maintains its bank accounts at:-

1.1

The Royal Bank of Scotland Plc.
City Office
PO Box 41260/62
Threadneedle Street
London
EC2R 8LA
Sort Code 15-10-00

The following bank accounts are to be maintained. Any addition to this list must be approved by the Board of Management:-

a	Weekly rent receipts	10524396
b	Monthly rent receipts	10524418
c	Quarterly rent receipts	10524426
d	Housing benefit receipts	10524434
e	Sheds receipts	10524442
f	Fixed Term Bid Deposit Account	91188239
g	Call Account	91022713
h	Main Account	10524140

The rent receipt accounts are used for the receipt of all rents, using the appropriate account according to the rent cycle of the tenant..

The main account is used for all payments, except repayments of overpaid rent which are paid from the relevant rent account.

On the last working day of each month, the balances from all rent accounts are to be transferred automatically to the Association's main bank account.

The main bank account is also used for all receipts (other than the receipts of rent).

Cheques drawn on the main account for sums up to £5,000 require one signature. The Chief Executive and any mandated Board member are eligible to sign. In exceptional circumstances, and the unavoidable absence of the Chief Executive, the Finance Officer may sign.

Cheques of more than £5,000 drawn on the Main Account must have two signatures, one of whom must be a Board member. In addition, all cheques for refunds of rent must also have two signatures. A copy of the current bank mandate is attached (appendix1 to this section).

It is the responsibility of the Finance Officer to ensure that funds held in the Association's main account are kept to a minimum, by transferring all unnecessary funds to the bid deposit account. It is also the responsibility of the Finance Officer, in consultation with the Chief Executive, to ensure that other investment institutions are used as appropriate as detailed in the next section.

All bank standing orders or direct debit mandates must be signed in accordance with the above instructions, but for the purpose of deciding the value of a standing order or a direct debit, the annual amount payable should be used.

It is the responsibility of the Finance Officer to ensure that all bank accounts are reconciled at intervals of not more than one month.

SECTION 11 - INVESTMENTS

All investments of money under the Association's control must be made in the name of the Association or in the name of a nominee approved by the Board of Management.

All securities which are the property of the Association, or held in its name or in the name of its nominees, must be held in the custody of the Association's bankers, solicitors or such other custodian as may be approved by the Board of Management, except where they are held as security by lenders.

Surplus funds may be invested with any of the following, or with any subsidiaries of the following whose obligations are guaranteed by the parent:-

3.1	Barclays Bank Plc.
3.2	Lloyds TSB Bank Plc.
3.3	HSBC Plc.
3.4	National Westminster Bank Plc.
3.5	Abbey National Plc.
3.6	Halifax Bank Plc.
3.7	Royal Bank of Scotland Plc.

SECTION 12 - BORROWING

All borrowing must be effected in the name of the Association and must be authorised in advance by the Board of Management. Any security given to lenders must be fully approved by the Board.

SECTION 13 - INSURANCE

The Chief Executive is responsible for ensuring that the Association is adequately insured.

The Chief Executive will ensure that all risks are underwritten by a well-established and reputable insurance office.

The Chief Executive will ensure that all the properties of the Association are insured against the usual risks that would be required by a prudent lender securing their funds on the properties concerned, and that the sum is adequate to cover rebuilding costs.

Insurance will also be maintained against the following risks:-

4.0	Buildings insurance	Sum insured £22,873,013 (index linked RICS)
a	Public liability	£5,000,000 any one claim
b	Employer's liability	£10,000,000 any one claim
c	Board Members liability (currently dealt with as part of the NHF subscription) with a top up from Farr Insurance brokers.	£1,000,000 £1,000,000
d	Fidelity guarantee	£500.000
e	Contents at 60 Morland Mews	£37,500 (£12.500 computers)
f	Cash	£1,000 (in safe overnight)
g	Death in service for employees	3 times annual salary
h	Legal expenses (employment matters)	£50,000

(the above amounts reflect 2001/2 cover – see appendix 1 to this section)

It is the responsibility of the Chief Executive to review the Association's insurances annually in consultation with a representative of the Association's brokers, currently St Olaf Insurance Brokers Limited. He will ensure that a schedule of insurance is prepared and provided by the broker.

Once per annum, the Chief Executive will prepare a report for the Board of Management setting out the current position in relation to the Association's insurance's. In addition the Chief Executive will ensure that a summary of cover is appended to these procedures.

Once every 3 years, the Chief Executive will put these insurances out to tender.

SECTION 14 - ACCOUNTING RECORDS & AUDIT

The Chief Executive will ensure that accounting records of all of the transactions entered into by the Association are maintained.

The Chief Executive and anyone acting on his authority will have the right to access any information held in any part of the Association's records for the purposes of ensuring that the Association's funds have been properly accounted for.

The Association's financial year shall be from the first of April to the thirty first of March. The Chief Executive will ensure that accounts are prepared and audited in time to be approved by the Board of Management prior to the Annual General Meeting. After the Annual General Meeting, the Chief Executive will ensure that they are filed with the Housing Corporation and with the Registrar of Friendly Societies, and with other organisations where the Association has agreed to provide copies of the accounts. by the thirtieth of September each year,

The Association's accounts will be audited by a firm of registered auditors, approved in accordance with the Association's Rules.

Day to day responsibility for the Association's accounting records will rest with the Finance Officer. The Finance Officer will be assisted by the Association's Internal Auditor in the preparation of annual accounts and in the preparation of management accounts, and any other tasks from time to time agreed by the Board of Management.

The financial records of the association will be subjected to a quarterly internal audit with an internal audit report presented to the Board together with the quarterly management accounts (see Appendix 1 to this Section).

SECTION 14 - ACCOUNTING RECORDS & AUDIT
APPENDIX 1: INTERNAL AUDIT - QUARTERLY CHECKS

The internal audit programme is designed to ensure that the financial procedures, including internal checks, of the Association are applied by the staff and committee in the financial management of the Association.

To this end the following quarterly checks are carried out:

PURCHASES

A selection of purchase invoices are examined checked to ensure:

a	purchases and supplies are in accordance with appropriate purchase orders and are checked and approved for payment in accordance with established procedures.
b	tenders have been requested in appropriate cases and subsequent invoices and payments are in accordance with accepted tenders.
c	purchases and supplies are appropriate to the Association, and appear reasonable.

BANK ACCOUNTS
All accounts are checked to ensure that reconciliations are made and balances agreed on a monthly basis. Treasury management is reviewed periodically in conjunction with the cash flow requirements.

SALARIES
Salaries paid are checked to ensure they accord with approved rates of pay as detailed in employee records.

PETTY CASH
Petty cash is checked on a random basis to agree the cash balance and to ensure that expenditure is supported by appropriate vouchers.

RENTAL INCOME
The internal audit includes verification of rental income.