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headings and recording the date of the transaction, the name of the payee, a general description of the payment, cheque or bank payment reference number, invoice number and the amount of the transaction. All expenditure should be supported by invoices or other explanatory documents and should be cross referenced to the accounting system. Similarly, cross referenced information should be retained to support all income including, for example, annual letters from the Department of Work and Pensions or the Teachers’ Pensions Agency setting out pension payments for the year ahead.
Similarly, where cash oats are used, there should be records of the cash expended from them.
Bank records should be reconciled back to bank statements on a monthly basis, whereas cash records should be reconciled at least monthly to the actual
cash held.
DO WE REALLY NEED TO OPERATE A FULL
SYSTEM OF FINANCIAL AND INTERNAL CONTROL?
All charities need to operate nancial and internal control systems comprising those policies and procedures that support the ef cient and effective operation of the charity. The system should enable the charity to respond to any signi cant risk including operations, nance and compliance to name a few.
The resources that charity trustees are asked to steward are not their individual personal assets, they are the assets of their institutes. They have been accumulated by current and past generations to enable the institute to discharge its apostolate. The function of the trustees of a religious institute charity is
one of stewardship, and by that stewardship they will enable their institute to carry on its mission not just today but also into the future. Within that role the charity’s trustees have a duty to utilise whatever facilities are available to them to ensure that those resources are protected or even enhanced, not for their own sake but for the use to which they will ultimately be put.
Financial and internal controls are essential means of protecting the institute’s assets as they are resources but, equally important, they are there to protect individuals – both members and employees. Controls protect them from the risk of making errors but also from the accusation of fraud.
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