Establishing financial policies for your group

The Charity Commission requires all charities, including scout groups, to have formal financial policies, which have been agreed by the group trustees (group executive committee).

There should be a policy for:

1. expenses

2. reserves

3. investment

4. risk

For many scout groups these are likely to exist already and to have been previously agreed by the group executive committee. If no policies currently exist, then it is a good idea to draw one-up. You can easily do this using our templates which are available in the members area of our website southlondondscouts.org.uk and get them agreed by your group executive committee.

You may choose to include additional information, where relevant, about:

• the group’s principal sources of funds (including any fundraising);

• investment policy and objectives

A financial policy is not a legal document. It is an agreed set of principles and guidelines for the operation and use of your group funds. A policy expresses how your group goes about its work and how it conducts its finances. All policies include procedures which are the steps for carrying out the policy.

Good policies express a fair and sensible way of dealing with issues. While they can be changed, no organisation should change its policies too often as they are intended to guide the work of your group for a reasonable length of time. Once a policy becomes group practice, and has been approved by the group executive committee, it is binding on everyone in the group.

A good financial policy:

• Is fair

• Meets legal requirements

• Is comprehensive (covers all likely situations)

• Is realistic and can be implemented

• Is affordable.

If your group is small, you will probably work fairly informally and there some areas of our model policy may well be inappropriate. Even so, it’s a good idea to have some rules, however few, so that everyone is clear about how to look after your group’s money.

If your group is larger, then you will probably need more detailed procedures. You can use our model policy as basic guidelines to draw up rules which are appropriate and useful for your group.

As well as helping your group to function better, financial rules show funders and other bodies that your group is looking after its money well.

Your Group Executive Committee will need to decide details such as:

• the sort of financial records you will keep – account book, section petty cash book etc

• your bank or building society accounts, and the signatories

• how you will deal with section cash and the amount of the float they hold

• the maximum amount which can be paid out in cash

• whether there are certain small items which committee members may buy without going to a meeting for approval; and if so, up to what amount of money?

• the financial year (for example, if your accounts will run from 1st April to 31st March, or from 1st January to 31st December, or on a different cycle)

• how often the treasurer will report to the group executive committee, and whether the committee requires verbal or written reports

Once your group executive committee has agreed the rules, remember to give a copy to everyone who joins the committee.

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Charity Commission Guidance: 

• Internal financial controls for charities: checklist

• Internal financial controls for charities (CC8)

Take a look at...