Approved by RCN Council November 2014
Financial Regulations
2014
Document control summary
Title
Status
Version No.
Date of this Draft
Author(s)
Approved by
Circulated to
Effective from
Next Review Date
Financial Regulations
Draft
5.0
October 2014
Vanessa Woods
1 January 2015
November 2015
Page 1 of 59
Financial Regulations 2014
Approved by RCN Council November 2014
Contents
1
INTRODUCTION……………………………………………………................
5
1.1
1.2
1.3
1.4
Purpose………………………………………………………………………….
Scope…………………………………………………………………………….
Structure…………………………………………………………………….......
Supporting documents…………………………………………………….......
5
5
5
6
2
ROLES AND RESPONSIBILITIES…………………………………………..
6
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Council, its committees and officers………………………………………….
Chief Executive and Executive Team (collective)………………………......
Executive Team (individual)…………………………………………………...
Director of Finance and Corporate Services and Head of Finance……….
Director of HR and Organisational Development…………………………...
Senior Management Team……………………………………………………
All Staff…………………………………………………………………………..
6
7
7
7
9
9
10
3
FINANCIAL PLANNING………………………………………………………
10
3.1
3.2
3.3
3.4
Financial Strategy………………………………………………………………
Investment Strategy……………………………………………………………
Reserves Policy………………………………………………………………...
Other Strategic Initiatives……………………………………………………...
10
11
12
13
4
BUDGETARY CONTROL AND REPORTING…………………………......
17
4.1
4.2
4.3
4.4
4.5
Preparation of budgets and plans…………………………………………….
Budget monitoring and Forecasts…………………………………………….
Virement…………………………………………………………………………
In year budget changes and use of contingencies………………………….
Key Performance Indicators (KPI’s)………………………………………….
17
19
20
23
23
5
INCOME/COMMERCIAL ACTIVITY/PARTNERSHIPS…………………..
24
5.1
5.2
5.3
5.4
Income generation activity/initiatives..………………………………………..
Subsidiary entities………………………………………………………………
Contractual arrangements (income inc Sponsorship & Grants)…………..
Partnership agreements……………………………………………………….
24
25
28
30
6
INCOME…………………………………………………………………………
30
6.1
6.2
6.3
6.4
General…………………………………………………………………………..
Sponsorship……………………………………………………………………..
Grants and other externally funded projects………………………………...
Bad debts………………………………………………………………………..
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33
34
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Financial Regulations 2014
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7
PROCUREMENT AND CONTACT MANAGEMENT………………………
35
7.1
7.2
Procurement strategy…………………………………………………………..
Contract management (procurement/expenditure)…………………………
35
37
8
PROPERTY, EQUIPMENT AND OTHER ASSETS………………………..
38
8.1
8.2
Fixed/capital assets…………………………………………………………….
Inventories………………………………………………………………………
38
40
9
EXPENDITURE…………………………………………………………………
41
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
Authority to incur expenditure…………………………………………………
Payment to suppliers…………………………………………………………..
Staff expenditure………………………………………………………………..
Payroll……………………………………………………………………………
Staff and Members expenses…………………………………………………
Staff loans……………………………………………………………………….
Appointment of consultants and contractors………………………………...
Special payments………………………………………………………………
Staff pension scheme………………………………………………………….
41
42
42
43
43
44
45
45
46
10
BANKING AND INVESTMENTS……………………………………………..
47
10.1
10.2
10.3
10.4
10.5
Bank accounts…………………………………………………………………..
Treasury and short term deposits…………………………………………….
Investments……………………………………………………………………..
Loans…………………………………………………………………………….
Receipts and cash handling…………………………………………………..
47
48
49
51
51
11
BRANCHES AND OTHER RCN GROUPS…………………………………
52
11.1
11.2
RCN Branches………………………………………………………………….
Other RCN groups……………………………………………………………...
52
52
12
AUDIT AND CONTROL……………………………………………………….
53
12.1
12.2
12.3
12.4
12.5
12.6
12.7
Accounting requirements………………………………………………………
External audit……………………………………………………………………
Internal audit…………………………………………………………………….
Regulatory compliance framework…………………………………………...
Fraud and corruption…………………………………………………………..
Risk………………………………………………………………………………
Gifts and hospitality…………………………………………………………….
53
53
54
54
55
55
56
13
OTHER REQUIREMENTS…………………………………………………….
56
13.1
13.2
13.3
13.4
13.5
Supervisory procedures………………………………………………………..
Insurance………………………………………………………………………...
Taxation………………………………………………………………………….
VAT……………………………………………………………………………….
Project Management……………………………………………………………
56
56
57
58
58
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Financial Regulations 2014
Approved by RCN Council November 2014
Overview

These financial Regulations supersede the old Financial Standing Orders and
were first published in September 2012 and were last reviewed in November
2013. The Financial regulations are reviewed in detail every three years
however an annual review is undertaken to reflect any changes in practice or
statutory requirements. This review is dated November 2014. Amendments
since the last review are relatively insignificant and mostly relate to matters of
clarity and consistency with other guidance documents. A new lower limit of up
to £10,000 has been added to the approval process for new strategic initiatives
(section 3.4) and income / commercial initiatives (section 5.1). A regulatory
compliance management framework document has been developed and a link
to the framework is available at section 12.4 of this document.

RCN Council is responsible for ensuring that the RCN operates within an
effective governance and control framework.

Overarching that framework are a set of formal documents which sets out the
key tasks and responsibilities of the RCN’s governing body (Council) and the
processes and rules to be followed by all those operating for or on behalf of
Council.

The highest level document is the Scheme of Delegation this sets out the
tasks and responsibilities of Council, its Committees, Boards, Branches and
management. The Scheme of Delegation, includes, where appropriate the
financial responsibilities and thresholds of each of the delegated governance
groups.

Underpinning the Scheme of delegation are the Financial Regulations (this
document). This sets out the rules and processes that the RCN must follow in
order to maintain effective controls. The structure follows the Scheme of
Delegation; the emphasis is key principals / controls and accountability.

Underpinning the Financial Regulations are detailed policies and procedures.
It is these documents which set out the detailed rules and processes to be
followed. Links to relevant policies and procedures can be found under “linked
documents” within each section.

All staff should familiarise themselves with the Scheme of Delegation, Financial
Regulations and relevant policies and procedures.
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Financial Regulations 2014
1
INTRODUCTION
1.1
Purpose
Approved by RCN Council November 2014
1.1.1 These Financial Regulations set out the framework within which the RCN
conducts its financial affairs. They cover the full range of the RCN’s financial
functions and processes and describe the financial controls which apply to all
RCN activity.
1.1.2 Their purpose is to provide control over the totality of the RCN’s resources and
provide management with assurance that the resources are being properly
applied for the achievement of the RCN’s strategic plan and business objectives,
taking due account of:
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1.2
financial viability
value for money
controls over the use of members and other funds
safeguarding the RCN’s assets.
Scope
1.2.1 The Financial Regulations apply to all RCN staff, including members of the
Executive Team, managers, budget holders and those with specialist roles in
Finance or other teams. They apply to all of the activities of the RCN, including
those which are externally funded. RCN Foundation and RCN Publishing
Company operate their own set of Financial Regulations.
1.2.2 All members of staff must ensure that they are aware of the RCN’s financial
regulations as far as they relate to their role, including the policies for expenses,
travel and corporate credit cards and the values of purchases for which
quotations and tenders are required. Heads of Departments must ensure that
their staff are aware of the provisions in Financial Regulations affecting their role,
and are kept up to date with any relevant changes.
1.2.3 A member of staff who fails to comply with the Financial Regulations may be
subject to disciplinary action. The Council will be notified of any material breach
through the Audit Committee.
1.3
Structure
1.3.1 The Financial Regulations are organised in [number] parts which cover the
following:
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Roles and Responsibilities
Financial Planning, Budgetary Control and Reporting
Income and Commercial Activity
Procurement and Contract Management
Property, Equipment and other assets
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Financial Regulations 2014
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Approved by RCN Council November 2014
Expenditure (Staff & Non Staff)
Income & Receipts
Banking and Investments
Branches & Other RCN Groups
Audit and Control
Other Requirements, including taxation, insurance, document retention
1.3.2 Each section is structured to show:
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1.4
The key principles/control issues
Main responsibilities / Authorisation charts:
- this focuses on the roles of ET (Executive Team), SMT (Senior
Management Team) and their delegates (including budget holders)
- it does highlight the key roles and responsibilities of Finance, but
much of the detail will be set out in procedure notes
- it does not cover all of the responsibilities of Council and its
committees – these are contained in the Council scheme of
delegation and committee terms of reference - however it does
highlight where things should be referred to Council or one of its
committees
Linked documents – see section 1.4 below
Supporting documents
1.4.1 The Financial Regulations support and underpin the Scheme of Delegation.
1.4.2 These Financial Regulations should be read in conjunction with the more detailed
policies, guidance and procedure notes covering specific areas.
1.4.3 More detailed Financial Procedures to support these Regulations are available
on the RCN Intranet. They will be updated from time to time by the Director of
Finance and Corporate Services.
2
ROLES AND RESPONSIBILITIES
2.1
Council, its committees and officers
2.1.1 The RCN Council is responsible for the overall governance of the RCN and
ensuring that it meets its statutory purposes. It sets the strategic direction of the
organisation and has ultimate responsibility for its long term financial
sustainability.
2.1.2 The general powers of the Council, including its financial powers, are set out in
the Royal Charter.
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Financial Regulations 2014
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2.1.3 The Council is supported in its role by the governance committees, including:
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Governance Support Committee
The Business Committee
The Audit Committee
The Remuneration Committee
LINKED DOCUMENTS
The Scheme of Delegation sets out which of those powers Council delegates to
its Governance Committees and the Executive Team and which are reserved to
itself.
2.2
Chief Executive and Executive Team (collective)
2.2.1 The Chief Executive and General Secretary (referred to throughout this
document as Chief Executive) are responsible for discharging Council’s policies
and for the day to day running of the organisation, including all matters delegated
to the Executive Team within the Scheme of Delegation.
2.2.2 The Executive Team comprises the Chief Executive, the Director of Finance and
Corporate Services and the Directors of each of the RCN’s Directorates and acts
together to support the Chief Executive in their areas of delegated authority.
2.2.3 The Executive Team is jointly responsible for the day to day operation of the RCN
and in particular leading the development of the strategic and operational plans,
recommending the annual budget to the Business Committee and Council,
monitoring the performance of Directorates, and overseeing risk management
arrangements.
2.3
Executive Team (individual)
2.3.1 All Executive Team Directors are individually responsible for the day to day
management of their Directorates. They in turn may delegate authority to the
Senior Management Team (SMT). These delegations will normally be
documented in the relevant job descriptions. Key responsibilities in relation to
Financial Regulations are detailed below under ‘Senior Management team’’.
2.4
Director of Finance and Corporate Services and Head of
Finance
2.4.1 The Director of Finance and Corporate Services has the following key roles
in relation to Financial Regulations:
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proposing the RCN’s Financial Strategy
proposing the RCN’s Investment Strategy
leading the annual operational and financial planning process
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Financial Regulations 2014
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Approved by RCN Council November 2014
reporting on progress against budgets
managing the financial implications of the RCN pension scheme
advising ET and Council on commercial decisions affecting the RCN
advising ET and Council on the financial implications of purchase / sale of
assets including property
ensuring that the RCN maintains satisfactory financial control systems
leading procurement strategy and advising on value for money
presenting the RCN’s annual report and accounts
advising ET and Council on the financial implications of any major
developments
2.4.2 Day-to-day financial administration is delegated to the Head of Finance, who is
responsible for:
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coordinating the annual budget process
compiling monthly management accounts and reviewing on proposed
actions to deal with variances
providing professional advice on all financial matters, including support and
advice to SMT and budget holders through the Business Accounts team
receiving monies and making payments in accordance with authorised
instructions and keeping accurate accounting records of all income and
expenditure
preparing the RCN's annual accounts, and other financial statements
ensuring that the RCN maintains satisfactory financial systems
ensuring that financial procedures provide adequate financial controls
coordinate all tender processes and maintaining a register of tenders
advise on any proposals for income generation
authorising the creation and closure of all bank accounts
managing any loans and short-term investments
ensuring that adequate training and guidance is available to budget holders
and other staff to enable them to fulfil their financial responsibilities.
2.4.3 Where the Finance Departments in Northern Ireland, Scotland and Wales fulfil
some or all of the above functions, they are responsible for ensuring that an
appropriate financial control environment exists in line with the procedures laid
down by the Head of Finance.
2.4.4 Where in this document reference is made to either the Finance Department or
the Business Accounts Team this is taken to include the Board Business
Managers in Northern Ireland, Scotland and Wales who carry out these activities
within their respective country.
2.5
Director of HR and Organisational Development
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Financial Regulations 2014
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2.5.1 The Director of HR and Organisational Development has the following key
roles in relation to Financial Regulations:
 maintaining standard RCN conditions of employment
 issuing guidelines for any changes to the structure of the organisation,
 issuing guidance on the recruitment and appointment of staff and
consultants, re-grading, hiring agency staff and changes in any aspect of
remuneration
 approving all staff appointments and amendments to payroll
 validation of staff budgets
2.5.2
In addition, the Human Resources department will ensure through induction on
appointment that all staff are made aware of the need to comply with the
Financial Regulations.
2.6
Senior Management Team
2.6.1 The Senior Management Team who are normally, but not exclusively, Heads of
Departments are responsible for financial management for the areas or activities
they control. They are responsible for ensuring that the resources controlled by
their teams are used efficiently and effectively and are managed in accordance
with the RCN’s Financial Regulations. In particular they are responsible for:
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preparing and monitoring budgets
ensuring that there are clear lines of responsibility within their department
or team for all financial matters, with adequate segregation of duties and
checks to ensure that the RCN’s financial records are accurate and
complete
ensuring that staff are aware of and comply with Financial Regulations
ensuring that there are adequate arrangements to safeguard all assets in
their control
providing the Head of Finance with such information as is required for the
RCN’s financial planning, management accounting and financial reporting
in a timely manner
implementing approved audit recommendations
2.6.2 Members of the Senior Management Team may delegate day to day
responsibility for some or all of their budgets to members of their team but they
will retain overall responsibility and accountability for performance and
compliance with these Financial Regulations and underpinning policies.
2.7
All staff
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Financial Regulations 2014
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2.7.1 All members of staff have a general responsibility for the security of the RCN’s
property, for avoiding loss and misuse and for economy in the use of resources.
2.7.2 They must ensure that they are aware of the RCN’s Financial Regulations as far
as they relate to their role, including the policies for expenses, travel and
corporate credit cards and the values of purchases for which quotations and
tenders are required.
2.7.3 They should immediately notify the Director of Finance & Corporate Services
whenever any matter arises which involves, or is thought to involve, irregularities
concerning the RCN’s cash, property or other resources. The process to follow
with regard to any suspected fraud or irregularity can be found under section 12.5
of this document.
2.7.4 A member of staff who fails to comply with the Financial Regulations may be
subject to disciplinary action.
3
FINANCIAL PLANNING
3.1
Financial Strategy
KEY PRINCIPLES
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the organisation’s financial strategy is reviewed annually and based on
future projections of income streams and anticipated activity and service
provision
the financial strategy will normally project financial performance based on
agreed assumptions five years into the future
the annual financial strategy identifies the financial assumptions to be used
in the preparation of budgets and operational plans
financial implications of capital programs must be incorporated into the
financial strategy as appropriate
RESPONSIBILITIES
Council approves the RCN’s five year strategic plan, the financial strategy,
annual budget and priorities; and monitor performance against plans. The
Director of Finance and Corporate Services and Executive Team will prepare
the financial strategy and annual budgets and operational plans. The Head of
Finance is responsible for collating and reviewing information and assumptions
used to develop the financial strategy and annual budgets.
Page 10 of 59
Financial Regulations 2014
Approved by RCN Council November 2014
Approve Financial Strategy
Council
Recommend financial strategy
Business Committee
Review & recommend financial strategy
Executive Team
Propose Financial Strategy
Director of Finance & Corporate Services
Analysis / information for Financial Strategy
Head of Finance
3.2
Investment Strategy
KEY PRINCIPLES
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the RCN’s investment strategy is developed to underpin the financial
strategy and ensure cash and other liquid assets of the organisation are
both safeguarded and utilised to achieve its objectives
investment strategy is reviewed regularly in line with the funding needs of
the organisation and the agreed reserves policy (see section 3.3 below)
investment performance against targets will be monitored quarterly,
investment managers working on behalf of the RCN will be accountable to
Council through the Business Committee
Business Committee have set up a small investment sub-group who are
tasked with developing, maintaining and monitoring all aspects of
investment strategy and performance and providing advice and guidance to
the Committee. The investment sub-group report directly to the Business
Committee who retains responsibility for this activity.
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Financial Regulations 2014
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RESPONSIBILITIES
Council will approve the investment strategy. Business Committee will
develop and review the Investment Strategy with advice and assistance from
Approve Investment Strategy
Council
Recommend Investment Strategy
Business Committee
Propose Investment Strategy
Director of Finance & Corporate Services
Analysis / information for Investment Strategy
Head of Finance
3.3
Reserves policy
KEY PRINCIPLES
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the organisation’s reserves policy is reviewed annually as part of the
financial strategy, future reserves are based on the achievement of
projected budgeted results
the reserves policy incorporates known and projected organisational
commitments and liabilities including, but not exclusively the risks around
the RCN Pension Scheme and the provision of indemnity cover to members
action should be taken to rectify any potential deviation from the reserves
level agreed immediately it is identified unless otherwise agreed by Council
RESPONSIBILITIES
Council sets the reserves policy based on recommendation from Business
Committee. The Director of Finance and Corporate Services and Executive
Team are responsible for monitoring reserve levels and identifying potential
financial risks. The Head of Finance is responsible for providing appropriate
information and analysis.
Page 12 of 59
Financial Regulations 2014
Approved by RCN Council November 2014
Approve reserves policy
Council
Recommend reserves policy
Business Committee
Review & recommend policy
Executive Team
Monitor / propose reserve levels
Director of Finance & Corporate Services
Analysis / information
Head of Finance
For the current reserves policy contact the Head of Finance on 0207 647 3515.
3.4
Other Strategic Initiatives
KEY PRINCIPLES
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any new aspect of business, service delivery or other strategic initiative
must be the subject of a business case
all new initiatives must be in line with RCN Strategic objectives and council
priorities
all business cases must be submitted by the relevant director and should
follow normal authorisation routes
anyone developing new activities must work closely with the finance
department to ensure accurate costing and other accounting requirements
are included in the business case as appropriate
any new activity which will involve the purchase, sale or change to
arrangements involving property, computer hardware or software will need
to be agreed by the Estates Development group or Information Strategy
Group as appropriate and should follow guidance set out at section 7.1
below
any initiatives relating to income generation or other commercial activity
should follow guidance set out in section 5 below
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Financial Regulations 2014
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RESPONSIBILITIES
Council has overall responsibility for the development of new activities or
services. Council delegate to Business Committee the approval of new activity
streams under £1,000,000. Executive Team has delegated authority to approve
all new activity streams under £500,000 and to ensure appropriate business
cases are prepared for all new activity. Head of Finance is responsible for
ensuring all new activities are correctly costed and any accounting implications
are included in business cases
New initiatives (revenue or capital) over £1,000,000 (total expenditure)
over duration of the activity
Approve new activity business case
Council
Recommend new activity business case
Business Committee
Review business case £1,000,000
Executive Team
Submit for approval
Relevant Director
Prepare business case for new activity
SMT Lead / Business Accounts / Operational
Planning Adviser
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Financial Regulations 2014
Approved by RCN Council November 2014
New initiatives (revenue or capital) £500,000 to £1,000,000 (total
expenditure) over duration of the activity
Note new activity business case
Council
Approve new activity business case
Business Committee
Review business case £500,000 to £1,000,000
Executive Team
Submit for approval
Relevant Director
Prepare business case for new activity
SMT Lead / Business Accounts / Operational
Planning Adviser
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New initiatives (revenue or capital) £50,000 to £500,000 (total expenditure)
over the duration of the activity
Note new activity business case
Business Committee
Approve business case £50,000 to £500,000
Executive Team
Submit for approval
Relevant Director
Prepare business case for new activity
SMT Lead / Business Accounts / Operational
Planning Adviser
New initiatives (revenue or capital) £10,000 to £50,000 over the duration of
the activity
Approve business case
Director of Finance and Corporate Services
Submit for approval
Relevant Director
Prepare business case for new activity under
£50,000
SMT Lead / Business Accounts / Operational
Planning Adviser
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Financial Regulations 2014
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New initiatives (revenue or capital) under £10,000 over the duration of the
activity
Approve business case
Relevant Director
Prepare summary business case for new activity
under £10,000
Senior Management Team / Business Accounts /
Operational Planning Adviser
LINKED INFORMATION
RCN Strategic Plan
4
BUDGETARY CONTROL AND REPORTING
4.1
Preparation of budgets and plans
KEY PRINCIPLES
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the organisation’s operational plans are based on the strategic plan and
Council’s agreed annual priorities
operational plans are underpinned by realistic budgets, identified measures
of performance and assessments of risk
budgets and operational plans should be prepared in accordance with the
instructions distributed by the Director of Finance and Corporate Services
budgets and plans are based on the assumptions agreed in the financial
strategy
individual department and directorate budgets are consolidated by the
finance department
RESPONSIBILITIES
Council will set out strategic objectives and priorities based on the RCN’s
strategic plan. Council will, on recommendation of Business committee
approve budgets and operational plans based on these objectives. The
Executive Team review and agree the consolidated budget and plan to put
forward to Business Committee. Individual directors are responsible for
ensuring budgets and plans within their directorates achieve RCN Strategic
objectives and are in accordance with approved guidelines. Members of the
Senior Management Team are responsible for the preparation of individual
budgets and plans. Members of the Senior Management Team may delegate
day to day responsibility for part of budgets to members of their team but they
remain accountable for the budget and plan. The Director of Finance and
Corporate Services presents consolidated budgets and operational plans and
ensures they are in line with the RCN’s financial strategy. The Head of
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Finance through the Business Accounts Team is responsible for consolidating
and co-ordinating the process and reviewing information and assumptions used
to develop budgets and plans.
Approve budget & plan
Council
Review & recommend budget and plan
Business Committee
Review and submit consolidated budget & plans
Executive Team
Present consolidated budget & plans
Director of Finance & Corporate Services / Head of
Finance
Prepare budgets and plans
SMT Lead / Business Accounts / Operational
Planning Adviser
LINKED INFORMATION
Council Annual Priorities
Budget and Operational planning instructions – issued annually by the Director
of Finance and Corporate Services
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Financial Regulations 2014
4.2
Approved by RCN Council November 2014
Budget monitoring and forecasts
KEY PRINCIPLES
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departments and directorates are responsible for delivering activity in line
with their approved operational plan and budget
forecasts are prepared quarterly by the finance department
all directors and members of the senior management team are required to
ensure the finance department have the necessary accurate and relevant
information in order to complete accurate forecasts in a timely manner
any actual anticipated variances from budget must be reported to Council
(through Executive team), together with proposals for corrective action in a
timely manner
any variations from approved plans, outside agreed tolerances, must have
appropriate approval
monthly consolidated management accounts are reviewed and discussed
by Executive Team and distributed to Council for noting
monthly management accounts are prepared for all senior management
and other budget holders
regular meetings should take place between senior management team
leads and business accounts to ensure two way flow of information and
effective monitoring of budgets
the operational planning adviser will attend quarterly forecast meetings as
appropriate to ensure alignment with operational plans and budgets
RESPONSIBILITIES
Council has overall responsibility for ensuring overall budget and financial
strategy are achieved and approving any changes to the budget in year. The
Executive Team has devolved authority for managing the budget on a monthly
basis and, through the Director of Finance and Corporate Services reporting
variances and actions to resolve them to Council. Members of the Senior
Management Team are responsible for monitoring their individual budgets and
ensuring variances against budget are identified and resolved. The Senior
Management Team may delegate day to day authority for part or all of budgets
to members of their team but they remain accountable for the budget and plan.
The Head of Finance, through the Business Accounts team, is responsible for
ensuring processes are being followed and for providing accurate and timely
management reports and forecasts.
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Note and action as required
Council
Present forecasts and actions required
Director of finance & Corporate Services
Manage and action reports and forecasts
Executive Team
Review reports & forecast
Director of Finance & Corporate Services / Head of
Finance
Prepare reports & forecasts
SMT Lead / Business Accounts / Operational
Planning Adviser
LINKED INFORMATION
Quarterly forecast procedure
Budget setting guidance
4.3
Virement
KEY PRINCIPLES
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in year budget transfers from one non staff cost heading to another within
the same department / project budget is permitted if approved by the
relevant budget holder
in year budget transfers below £50,000 between departments will be
agreed by the relevant directors in writing
in year budget transfers above £50,000 between departments will be
agreed by the relevant directors and the Director of Finance and Corporate
Services
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all transfers of budget will be reported in the relevant quarterly forecast
report
all in year budget transfers must comply with the detailed virement policy
all in year budget transfers between staff costs and non staff costs must be
approved by Director of HR and Director of Finance and Corporate
Services
in year budget transfers must not result in additional expenditure being
incurred
Business Committee receive a high level summary of under spends which
have been “banked” as reserves.
RESPONSIBILITIES
The Executive Team is responsible for ensuring all in year budget transfers
comply with agreed procedure and do not result in additional costs. The
Director of Finance and Corporate Services is responsible for ensuring
appropriate processes are in place to identify and report in year budget
transfers. The Head of Finance is responsible for ensuring these processes
are maintained effectively.
In-year amendments to non-staff budget and virement over £50,000
Budget transfer noted
Executive Team
Budget transfer approved
Director of Finance & Corporate Services
Budget transfer over £50,000 agreed
Relevant Directors
Initial discussion re non-staff cost virement /
transfer
SMT Lead / Business Accounts
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In-year non-staff cost virement under £50,000
Note budget transfer
Executive Team
Budget transfer under £50,000 agreed
Relevant Directors
Initial discussion re non-staff cost virement /
transfer
SMT lead / Business Accounts
In-year staff cost virement
Approve (over £50,000)/ Note (under £50,000)
budget transfer
Executive Team
Transfer involving staff costs agreed
Director of HR / Director of Finance and Corporate
Services
Initial discussion re staff cost virement / transfer
SMT Lead / Business Accounts
LINKED INFORMATION
RCN Virement policy
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4.4
Approved by RCN Council November 2014
In year budget changes and use of contingencies
KEY PRINCIPLES
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all changes to overall RCN budgeted position must be agreed by Council
Council will only consider changes to the budgeted position which are
accompanied by a clear business reason for the change
Changes to budgeted income targets will be agreed by Council on
recommendation of Business Committee
All transfers between budgets will be subject to the provisions in section 4.3
above
The use of general contingency funds must be approved by the Executive
Team and reported to Business Committee
The use of the Industrial Action Fund must be approved by Council
RESPONSIBILITIES
Council is responsible for any changes to the RCN budgeted position. The
Executive Team are responsible for ensuring the use of contingency funds is
appropriate and reported to Business Committee. The Director of Finance
and Corporate Services is responsible for ensuring appropriate processes are
in place to identify and report any potential change to budgets and use of
contingency. The Head of Finance is responsible for ensuring these
processes are maintained effectively.
LINKED INFORMATION
Use of Contingency Budget
4.5
Key Performance Indicators (KPI’S)
KEY PRINCIPLES
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financial KPI’s will be set, reviewed and monitored by Council
all KPI’s monitor performance against the strategic plan
finance will work with individual KPI owners, as appropriate to ensure the
information provided for financial KPI’s is accurate and timely
individual KPI owners will be required to provide explanations and
corrective action, where appropriate for variances in KPI’s reported
RESPONSIBILITIES
Council is responsible for setting and reviewing all KPI’s. KPI leads are
responsible for providing exception reports and explanations in a timely manner
through the RCN governance structure to Council. The Head of Finance is
responsible for overseeing the provision of financial information to be used
within KPI reporting in an accurate and timely manner.
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5
INCOME / COMMERCIAL ACTIVITY / PARTNERSHIPS
5.1
Income Generation Activity / Initiatives
KEY PRINCIPLES
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Relates to non membership subscription and commercial activity
Income Generation activity must be in line with RCN’s strategic plan
All income generation activity is conducted in line with HMRC and other
statutory regulations and guidance.
Mechanisms are in place and regularly reviewed to ensure income
generated is appropriately utilised
Consistent policies and practice in place for similar types of income
generation across the organisation
Income generation must not compromise the RCN’s overall strategic aims
and objectives and reputation
New income generation and other new commercial activity proposals must
be the subject of a business case and appropriate approval process before
it can go ahead
Changes to current income generation and other commercial activity which
significantly change the risk, investment or accountability of the RCN must
be the subject of a business case and appropriate approval process before
it can go ahead. If in doubt as to whether a business case is required
please contact the Head of Finance.
Business Committee will monitor the performance of all income generation
and commercial activity above agreed levels
The Director of Finance and Corporate Services is responsible for ensuring
all relevant processes are in place
RESPONSIBILITIES
Council is responsible for all income generation activities. Council has
delegated authority to approve and monitor the performance of income
generation and commercial activity to Business Committee. The Director of
Finance and Corporate Services is responsible for ensuring that consistent and
adequate policies and processes are in place.
The Head of Finance is
responsible for ensuring processes are effective and all income generation is
accurately reported and accounted for.
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New income generation / Business Activity over £500,000 (Expected
gross income)
Approve income generation activity over
£500,000
Council
Recommend / approve income generation
Business Committee
Recommend income generation activity
Executive Team
Propose income generation activity
Director of Finance & Corporate Services / ET lead
Analysis / information for income generation
business case
Head of Finance / SMT Lead / Head of MBD
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New Income generation / business activity £250,000 to £500,000 (expected
gross income)
Note new income activity
Council
Approve business case £250,000 to £500,000
Business Committee
Reviewed for consideration
Executive Team
Prepare business case for new activity
Relevant Director / Head of Finance / Head of MBD
New income generation / business activity £10,000 to £250,000 (expected
gross income)
Note business case
Business Committee
Approved business case under £250,000
Executive Team
Prepare business case for new activity
Relevant Director / Head of Finance / Head of MBD
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New income generation / business activity under £10,000 (expected gross
income)
Approve business case
Relevant Director
Prepare summary business case for new activity
under £10,000
Relevant SMT / Head of Finance / Head of MBD
5.2
Subsidiary Entities
KEY PRINCIPLES
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all RCN subsidiary entities have their own board of directors
performance of subsidiaries is reported to Council, through Business
Committee
the decision to create or dissolve an RCN subsidiary will require a business
case which includes cash flows and implications connected to the decision
e.g. TUPE arrangements, other contractual arrangements
new subsidiaries will be considered if it is considered to be efficient from a
business point of view to hold certain activities outside the RCN
all subsidiaries will be accountable to ET, Business Committee and
ultimately Council
all subsidiaries will, as far as is practical follow RCN policies and processes
RESPONSIBILITIES
Council is responsible for creation and closure of all RCN subsidiaries on
recommendation from Business Committee.
The Executive Team are
responsible for developing a business case for the creation or closure of a
subsidiary for Business Committees consideration. The Director of Finance
and Corporate Services is responsible for overseeing the development of any
business case and ensuring all financial implications are considered. The Head
of Finance is responsible for the provision of accurate and informative analysis
and reports to support any business case.
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Approve Open / Closure of subsidiary
Council
Review and recommend business case
Business Committee
Review business case
Executive Team
Approve business case for consideration
Director Finance & Corporate Services
Information & analysis
Head of Finance
5.3
Contractual Arrangements (Income including Sponsorship & Grants)
KEY PRINCIPLES
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relates to all income related contracts including sponsorship contracts and
grant applications
all contracts and applications for funding must follow the appropriate
approval routes as outlined in the scheme of delegation
all income generation contracts should follow the principles and processes
outlined in section 5.1 above
all applications for funding are, for the purposes of this document, treated
as income generation contracts and should follow appropriate approval
routes
dependant on the value of the contract / funding application, a contract /
application lead at either Senior Management Team or Executive Team
level should be identified from the outset
contract / application leads should satisfy themselves of the detail and
terms and conditions of the contract / application to ensure the RCN can
comply with them before a signature is sought
a central register of all income generation contracts and agreed funding
applications will be held within finance which will include the value, period
of agreement, any specific obligations and RCN lead
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Contract / funding application leads must ensure finance are updated of any
changes to the contract or funding details
Contracts / funding applications must be signed in accordance with agreed
authorisation levels as outlined in the chart below.
RESPONSIBILITIES
The Executive team is responsible for ensuring effective management of all
contracts / funding applications in which the RCN is engaged. The Director of
Finance and Corporate Services is responsible for ensuring mechanisms and
appropriate support is in place to facilitate effective contract management
throughout the organisation. Members of the Senior Management Team are
responsible for ensuring that they engage with finance throughout the process
and provide finance with all relevant details in a timely manner. The Head of
Finance is responsible for ensuring a register of income generation contracts /
grant funding applications is in place and effective guidance and support is given
to contract / grant leads. The Director of Governance Support and the Head
of Marketing and Business Development have responsibility to ensure strong
links are in place between the RCN and RCN Foundation as appropriate.
Who can sign contracts / grant applications (value relates to duration of
contract)?
Over £1,000,000 (including VAT)
Chair of Council
£500,000 and £1,000,000 (including VAT)
Chief Executive / General Secretary
£50,000 and £500,000 (including VAT)
Director of Finance and Corporate Services
Under £50,000 (including VAT)
Relevant Director
5.4
Partnership Agreements
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KEY PRINCIPLES
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from time to time it may be appropriate for the RCN to enter into a
partnership or other form of association with other organisations which does
not necessarily have a monetary value attached to it
all such arrangements / associations can present reputational risk to the
RCN
all such arrangements must be included on a central register to be held by
the Finance Team
all such potential arrangements must be formally approved by the
appropriate Executive Team lead in consultation with the Director of
Governance and the Director of Finance and Corporate Services
Business Committee will receive an annual report of all current partnership
agreements and associations and will be notified of any new agreements at
its next meeting
all partnership agreements / associations must be agreed in writing
between the relevant organisations and reviewed annually for
appropriateness
where partnership agreements have a financial implication either on
potential income and / or expenditure then the authorisation provisions set
out in section 5.1 (income) and section 3.4 (expenditure) must be followed.
RESPONSIBILITIES
The Executive team is responsible for ensuring effective management of all
partnership agreements / associations in which the RCN is engaged. The
Director of Finance and Corporate Services and Director of Governance
Support are responsible for ensuring mechanisms and appropriate support is in
place to facilitate effective use of partnership agreements and associations.
Members of the Senior Management Team are responsible for ensuring that
any such arrangements are properly authorised and reported. The Head of
Finance is responsible for ensuring a register of all partnership agreements and
associations is in place and effective guidance and support is given. The
Director of Governance Support and the Head of Marketing and Business
Development have responsibility to ensure strong links are in place between the
RCN and RCN Foundation as appropriate.
6
INCOME
6.1
General
KEY PRINCIPLES
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ensure adequate control of income received for services provided by the
RCN
ensure the correct accounting treatment for all income
ensure income covers all costs of the service where relevant
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ensure correct approval of new income streams or changes to existing
income streams in accordance with income generation guidance at section
5.1 above
where appropriate identify any income received directly from members
(excluding membership subscriptions which is accounted for separately) for
example delegate income paid directly by the member
RESPONSIBILITIES
Members of the Senior Management Team are responsible for ensuring all
income is correctly authorised and coded and finance is fully informed of all
income streams and the nature of their source. The Head of Finance is
responsible for ensuring the appropriate accounting treatment is applied to all
income streams.
6.2
Sponsorship
KEY PRINCIPLES
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external sponsorship must be compatible with the RCN’s ethical policies,
image and existing commercial arrangements.
the acceptance of sponsorship arrangements must be in line with the
RCN’s strategic plan.
new sponsorship funded arrangements must be approved in line with
income generation guidance set out at section 5.1 above.
before agreeing a sponsorship agreement Finance should review the
proposed contract to determine any VAT or potential “tax” implications
copies of all signed sponsorship agreements will need to be sent to the
finance department to ensure correct VAT and Corporation tax treatment.
all contracts should clearly identify invoice amounts and arrangements and
clearly outline arrangements for use of unspent funds at the end of the
contract
all sponsorship arrangements can be identified and use can be reported
RESPONSIBILITIES
Council is ultimately responsible for all sponsorship agreements, however
authority is devolved to Business Committee and Executive Team for
sponsorship agreements below agreed limits. The Head of MBD is
responsible for the day to day management of sponsorship agreements and
ensuring finance is fully informed of all such arrangements. The Head of
Finance is responsible for ensuring the correct accounting treatment of any
sponsorship income in-line with HMRC and other statutory regulations.
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Approval levels
Approve Sponsorship over £500,000
Council
Approve Sponsorship £250,000 to £500,000
Business Committee
Approve sponsorship £50,000 to £250,000
Executive Team
Approve sponsorship under £50,000
Relevant ET Director
Review and advise accounting treatment
Head of Finance
Review and advise for consistency and compliance
Head of MBD
Negotiate draft agreement
SMT Lead
Reporting requirements are in-line with guidance at section 5.1 income
generation
Page 32 of 59
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LINKED INFORMATION
Sponsorship agreement guidance
Sponsorship agreement template
6.3
Grants and other externally funded projects
KEY PRINCIPLES
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external grants and other funding must come from organisations compatible
with the RCN’s ethical policies, image and existing commercial
arrangements.
the acceptance of grant and funding arrangements must be in line with the
RCN’s strategic plan.
new grant funded arrangements must be approved in line with income
generation guidance set out at section 5.1 above.
before agreeing a grant or funding contract, finance should review the
proposed contract to determine any VAT and corporation tax implications
and to ensure any propose reporting requirements are achievable
copies of all signed grant and funding agreements must be sent to the
finance department to ensure correct VAT, Corporation tax and accounting
treatment.
all contracts should clearly identify invoice amounts and arrangements.
all contracts should clearly outline arrangements for use of unspent funds at
the end of the contract
all grant and other funding can be identified and use can be appropriately
reported
RESPONSIBILITIES
Council are ultimately responsible for all grant and other funding agreements,
however authority is devolved to Business Committee and Executive Team
for grant and other funding agreements below agreed limits. The Head of
MBD and the relevant member of the Senior Management Team are
responsible for the day to day management of grant and other funding
agreements and ensuring finance is fully informed of all such arrangements.
The Head of Finance is responsible for ensuring the correct accounting
treatment of any grant or other funding income is in-line with HMRC and other
statutory regulations.
Page 33 of 59
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Approve grant / funding over £500,000
Council
Approve grant / funding £250,000 to £500,000
Business Committee
Approve grant / funding £50,000 to £250,000
Executive Team
Approve grant / funding under £50,000
Executive Lead / Head of MBD
Review and advise accounting treatment
Head of Finance
Investigate and develop grant / funding
application
SMT Lead
Reporting requirements are in-line with guidance at section 5.1 income
generation
6.4
Bad Debts
KEY PRINCIPLES
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
every attempt should be made to ensure the RCN does business with
financially viable organisations when entering into arrangements with new
and existing customers
credit checks should be carried out on all potential customers where the
value of income generated is £50,000 or more regardless or not as to
whether the payment is a lump sum or in instalments
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all potential customers based outside the UK (UK excludes Republic of
Ireland) should be credit checked before contracts are signed
all income should only be recognised once its existence is certain
all or at least 50% of income due should, where possible, be received in
advance of the provision of product or service
ensure that adequate arrangements are in place to deal with bad debts
should they arise
bad debts must be reported and written off in accordance with the scheme
of delegation
all outstanding income must be pursued as soon as it is due
robust credit control procedures must be in place and reviewed annually for
robustness
RESPONSIBILITIES
Council receives a report of all bad debts over £10,000 (per customer). The
Honorary Treasurer / Chair of the Business Committee approves all bad
debts over £10,000 (per customer). The Executive Team can write off bad
debts below £10,000 (per customer). Head of Finance is responsible for
ensuring all income due is received and accounted for correctly and promptly.
The Head of Finance is responsible for ensuring robust credit control
processes are in place. All bad debts above £1,000 (per customer) are reported
to Audit Committee
LINKED INFORMATION
Scheme of Delegation
Bad debt write-off policy
7
PROCUREMENT AND CONTRACT MANAGEMENT
7.1
Procurement Strategy
KEY PRINCIPLES
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the organisation’s procurement strategy is reviewed bi annually and is
based on best practice
all expenditure must be in-line with the RCN’s strategic plan and Council
priorities
the procurement process should be fair, transparent, robust and
accountable
consideration should be given to the RCN’s principles for Socially
responsible procurement
all expenditure over an agreed level should be subject to a tender exercise
a sole supplier procurement process should only be undertaken in
exceptional circumstances and must have prior approval in line with normal
approval routes
all procurement should be based on obtaining the best value for money
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all expenditure can only be committed once the appropriate authorisation to
proceed has been achieved
all expenditure must have an agreed budget, unbudgeted expenditure must
have appropriate approval
RESPONSIBILITIES
Council approves the Procurement strategy on recommendation of Business
Committee. The Executive Team are responsible for ensuring all expenditure
is incurred within budget and is incurred in the achievement of strategic
objectives and Council priorities. The Director of Finance and Corporate
Services and Executive Team will prepare the procurement strategy and review
achievement against the criteria set out within the strategy and underpinning
polices. The Head of Finance is responsible for ensuring processes and
mechanisms are in place to ensure compliance and report exceptions to policy
and provide information regarding the achievement of value for money.
Which procurement process to follow?
Over £50,000 (including VAT)
Competitive tender process
Between £10,000 and £50,000 (including VAT)
Three quotes
Under £10,000 (including VAT)
SMT lead discretion
LINKED INFORMATION
RCN Tender Process and Guidelines
RCN Procurement Strategy
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7.2
Approved by RCN Council November 2014
Contract Management (procurement / expenditure)
KEY PRINCIPLES
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the effective management of all contracts is essential to ensure contracts
provide the benefits and value for money they were procured to deliver
Contracts should normally be for a period of no more than five years before
a new procurement process is undertaken. Any deviation to this should be
formally set out in the relevant approval paperwork which is detailed within
the procurement guidelines.
Requests for extending ongoing contracts beyond the five year period
should be the subject of a business case and approved in line with
procurement guidelines.
dependant on the value of the contract, a contract lead at either Senior
Management Team or Executive Team level should be identified at the
procurement stage
contract leads should satisfy themselves of the detail and terms and
conditions of the contract to ensure they meet the RCN’s requirements
before signature is sought
regular meetings should be held between the RCN contract lead and the
supplier lead to discuss performance, issues, service provision etc
a central contracts register will be held within finance which will include the
value, period of contract, renewal date and RCN contract lead
RCN contract leads must ensure finance are updated of any changes to
contract details
Contracts should be reviewed every three to five years even if they are
operating satisfactorily for all parties
Contracts must be signed in accordance with the agreed authorisation levels
outlined in the chart below.
RESPONSIBILITIES
The Executive team is responsible for ensuring effective management of all
contracts in which the RCN is engaged.
The Director of Finance and
Corporate Services is responsible for ensuring mechanisms and appropriate
support is in place to facilitate effective contract management throughout the
organisation. Members of the Senior Management Team are responsible for
ensuring that they engage with finance during the negotiations and monitoring of
contracts and provide finance with contract details in a timely manner. The Head
of Finance is responsible for ensuring a register of contracts is in place and
effective guidance and support is given to contract leads
Page 37 of 59
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Approved by RCN Council November 2014
Who can sign contracts (value relates to duration of contract)?
Over £1,000,000 (including VAT)
Chair of Council
£500,000 and £1,000,000 (including VAT)
Chief Executive / General Secretary
£50,000 and £500,000 (including VAT)
Director of Finance and Corporate Services
Under £50,000 (including VAT)
Relevant Director
LINKED INFORMATION
Guidance for contract leads
Template to update contract register
8
PROPERTY, EQUIPMENT AND OTHER ASSETS
8.1
Fixed/Capital Assets (property, software, computer hardware
and valuable assets)
KEY PRINCIPLES
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
ensure purchase of assets is in-line with RCN strategic objectives, Council
priorities and the financial strategy
ensure disposal of assets is correctly authorised and in-line with strategic
objectives and the financial strategy
ensure all property related purchases / sale of assets is in line with the
property strategy and approved by the Estates Development Group (EDG)
ensure all Information Systems related purchase / sale of assets is in line
with the Information Systems Strategy and approved by the Information
Strategy Group (ISG)
all capital expenditure must be supported by a relevant business case and
approved in accordance with section 3.4 of this document
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manage risks around supply and supplier failure including fitness for
purpose
identify and correctly account for all fixed assets
ensure appropriate capitalisation policies are adopted and applied
ensure the existence of assets is checked and verified periodically
ensure adequate records are maintained of all RCN property and
equipment
it is the relevant Senior Manager’s responsibility to ensure an inventory is
kept of all such equipment which has been allocated to their department /
team / project
ensure Head of Finance is informed immediately of any loss or damage to
RCN property and equipment
RESPONSIBILITIES
Council has overall responsibility for the approval of all purchases and sale of
assets on recommendation of the Business Committee. Authority is devolved
to the Executive Team for low value assets. The Director of Finance and
Corporate Services is responsible for ensuring all financial implications have
been taken into account before purchase or sale of asset and the Head of
Finance is responsible for ensuring the correct accounting treatment of all
assets. The senior management team member is responsible for the security
and safeguarding of assets.
Page 39 of 59
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Approve Fixed asset purchase / sale
Council
Recommend purchase / sale of asset
Business committee
Review / Approve purchase / sale of asset
Executive Team
Consider and agree purchase / sale of asset
EDG / ISG
Develop business case for purchase / sale of
asset
SMT lead
LINKED INFORMATION
EDG – Terms of reference
ISG – terms of reference
Process for recording and updating fixed asset records
Template for disposal of an asset
8.2
Inventories
KEY PRINCIPLES
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
as well as items deemed to be “fixed assets” many departments and staff
require other assets, equipment or items deemed to have value in order to
carry out their duties
these items include, but are not exclusively, low value lap tops, projectors,
cameras, televisions, corporate credit cards etc
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it is the relevant senior managers responsibility to ensure a inventory is
kept of all such equipment which has been allocated to their department /
team / project
ensure all such items are properly managed and stored in order to
safeguard the RCN’s equipment
ensure Head of Finance is informed immediately if any equipment is lost or
damaged
it is the relevant senior managers responsibility to ensure equipment in the
possession of an individual member of staff is returned immediately if that
member of staff leaves, on maternity leave or on long term sick leave
RESPONSIBILITIES
Senior Management Team members are responsible for maintaining proper
security at all times for all equipment held. The Head of Finance is responsible
for the correct accounting treatment relating to all inventories.
9
EXPENDITURE
9.1
Authority to incur expenditure
KEY PRINCIPLES
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
Commitments are only entered into by those with delegated authority to
incur expenditure
Ensuring that there is authority and budgetary provision
Expenditure is in-line with the RCN’s strategic plan and Council priorities
Value for money must be demonstrated
All unbudgeted items of expenditure must have appropriate approval
RESPONSIBILITIES
Council is ultimately responsible for the commitment of all expenditure. The
Executive Team has delegated authority for budgeted expenditure within agreed
limits. The Head of Finance is responsible for ensuring robust processes and
mechanisms are in place to uphold delegated authority levels.
LINKED INFORMATION
Scheme of Delegation
Project approval routing
RCN Procurement Strategy
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9.2
Approved by RCN Council November 2014
Payment to Suppliers
KEY PRINCIPLES
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


all expenditure incurred is supported by properly authorised documentation
and is in accordance with the approved budget
all new suppliers are set up on the finance system prior to commitment of
expenditure
all invoices are paid promptly and within specified terms
payment should be made by BACs whenever possible
RESPONSIBILITIES
Members of the Senior Management Team are responsible for ensuring all
relevant documentation is properly coded and authorised. The Head of Finance
is responsible for ensuring robust processes procedures are in place to ensure
compliance with polices and prompt and accurate payment of invoices.
9.3
Staff expenditure
KEY PRINCIPLES
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
staff are only appointed to established posts for which there is appropriate
budgetary provision in current and future years
staffing establishments must be in-line with the RCN Strategic Plan and
financial strategy
HR policies and procedures on the recruitment and appointment of staff
should be followed at all times
the use of agency staff must be funded from vacant posts and approved by
HR and finance in advance
fixed term contracts are normally for an agreed period only and must be
fully funded for entire duration of the fixed term period
normal authorisation levels apply
members of the senior management team cannot delegate their staffing
budgets
the director of HR will report establishment levels quarterly to the Executive
Team
the head of finance will monitor staff expenditure against budget and report
any issues to the executive team through the Director of finance and
corporate Services
RESPONSIBILITIES
The Director of HR is responsible for maintaining data on staffing
establishments. Establishments should be reviewed and agreed between the
Director of HR, the senior management lead and the Head of Finance on a
quarterly basis. All changes to agreed establishments must be approved by
the Director of HR and Head of Finance and be in line with agreed strategic
objectives and financial policies.
LINKED INFORMATION
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HR policies
9.4
Payroll
KEY PRINCIPLES
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payments are only made to members of staff with legitimate RCN contracts
of employment and approved conditions, as issued by HR
only approved amendments, notified by HR, are made to payroll data
only appropriate members of the HR department can offer and agree terms
and conditions to any member of staff (includes fixed term, secondee etc)
HR must inform finance of all appointments, dismissals, secondments and
transfers in a timely manner
all payments must comply with PAYE, NIC and and other relevant
regulations and appropriate deductions will be made
RESPONSIBILITIES
The Director of HR is responsible for ensuring all staff related information is
accurate and given to finance in a timely manner. The Head of Finance is
responsible for ensuring all payroll payments are accurate, timely and the
appropriate statutory deductions are made.
9.5
Staff and Member Expenses
KEY PRINCIPLES
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All expenses claimed must be in line with RCN strategic objectives and
Council priorities
all staff must comply with the policy, principle and guidelines set out in the
staff expenses policy
it is each line managers responsibility to ensure all their staff are familiar
with and understand the expenses policy
staff authorising expenses must ensure those expenses comply with RCN
policy
staff authorising members expenses must do so in line with the members
expenses policy and the authorisation framework. A copy of the
authorisation framework can be obtained from the Governance Support
Unit.
any member of staff or RCN member wishing to appeal an expense claim
decision must do so under the relevant appeals process, a copy of which is
available from the Governance Support Unit
any member of staff with a corporate credit card must comply with the
RCN’s corporate credit card policy
agency staff will not normally be expected to incur expenses whilst working
at the RCN. If there is a requirement for an individual agency employee to
do so whilst carrying out RCN work, this must be communicated upfront in
writing to the Finance department by the appropriate SMT lead. Any
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expenses incurred by agency staff must be in accordance with the RCN
expenses policy.
RESPONSIBILITIES
Members of the Senior Management Team are responsible for ensuring all
expenses claimed by staff within their departments / teams comply fully with the
RCN expenses policy.
The Head of Finance is responsible for ensuring
effective processes and mechanisms are in place to ensure compliance.
LINKED INFORMATION
Staff expenses policy
Member expenses policy
Credit card policy
9.6
Staff loans
KEY PRINCIPLES
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All staff can apply for an annual season ticket loan in accordance with the
season ticket policy
All staff can apply for a corporate development loan in accordance with the
corporate develop loan policy
Staff can apply for assistance to purchase a bicycle for work purposes
under the government backed cycle 2 work scheme. More information is
available within the HR section of the intranet.
In exceptional circumstances staff can apply for an advance on salary, this
is approved by both the Director of HR and Organisational development
and Director of Finance and Corporate Services and will be deducted from
the employee’s next salary
RESPONSIBILITIES
The Head of HR and Head of finance must ensure that any loans given comply
with the relevant policy and are repaid in accordance with the terms of the policy
LINKED INFORMATION
Season ticket loan application form
Career development loan scheme application form
Salary advance application form
9.7
Appointment of Consultants or Contractors
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KEY PRINCIPLES
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HR must be consulted before appointment to determine if the
consultant/contractor may have employment status.
the procurement policy applies equally to contracts for the engagement of
consultants who are not employees and their appointments should be
subject to competition
the term consultant / contractor applies equally to other “consultancy” type
agreement including affiliates working in Membership Support Services,
Freelancers in Communications and Peer Reviewers in the Accreditation
team.
RESPONSIBILITIES


9.8
There is a risk that independent or freelance consultants or sole traders
could be deemed by HMRC to be employees. This will depend on the
nature of the work they are undertaking, any previous employment with the
RCN, the degree of independence they have and the commercial risk they
take on. HR must be consulted before any contract is entered into.
Subject to the above paragraph, the procurement policy applies equally to
contracts for the engagement of consultants – depending on the expected
value of the contract, it must be supported by a business case and subject
to competition in the normal way.
Special payments
From time to time it may be appropriate or necessary to make a one-off payment
to a member of staff, member (or their family), or other organisation. Whilst not
exhaustive this could include in certain circumstances contributions to funeral
and / or repatriation expenses, donations to a specific appeal or cause,
contribution to make good a loss incurred by a member or member of staff on
RCN Business.
KEY PRINCIPLES
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Special payments over £10,000 must be agreed by the Honorary Treasurer
/ Chair of the Business Committee.
Special payments under £10,000 can be agreed by the Executive team.
special payments should be relatively low value and represent a
contribution to assist in a time of need not to make good a full loss or cost
recovery
special payments to an organisation (in the form of a donation to a cause or
campaign) must be in-line with the RCN’s charter objectives
finance should be informed of all special payments made
finance will keep a log of all special payments and will present this annually
to the external auditors as part of their annual audit
RESPONSIBILITIES
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Council receives a report of all special payments over £10,000. The Honorary
Treasurer / Chair of Business Committee approves all special payments over
£10,000. The Executive Team can approve special payments under £10,000.
The Head of Finance is responsible for ensuring a log is maintained of all special
payments and reported to Council and the External Auditors as required. Audit
Committee receives a report of all special payments over £1,000.
9.9
Staff Pension Scheme
The RCN Career average (CARE) defined benefit pension scheme was closed
to new entrants on 31st October 2013. From 1st November 2013 a defined
contribution scheme is available to new entrants and those staff not currently in
a pension scheme.
All new staff are automatically enrolled in the lowest
contribution level of the defined contribution scheme under auto enrolment
regulation.
KEY PRINCIPLES
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All staff not in a pension scheme will be required to be auto enrolled into the
defined contribution scheme at regular intervals
SMT leads are required to inform HR immediately the pay or job status of
anyone working for them changes irrespective of whether they are a
member of staff, agency staff, contractor, consultant as this may impact
their auto enrolment status
Governance groups, working in partnership with staff-side representatives,
will oversee the governance arrangements of both CARE and the defined
contribution schemes
The RCN is required to comply with all pension law and to ensure staff
pension schemes are fit for purpose
Ultimately Council are responsible for ensuring the pension schemes are
appropriately funded and financially viable
Finance are responsible for ensuring the correct accounting treatment of
pension scheme costs and assets and liabilities
Finance are responsible for the accurate and timely payment of
contributions to scheme providers
HR are responsible for the accurate and timely provision of employee
information to scheme providers
RESPONSIBILITIES
Council is responsible for ensuring the RCN staff pension schemes are
adequately funded and are fit for purpose. Business Committee review
pension scheme valuations and funding plans and recommend any necessary
action to Council. The Director of Finance and Corporate Services is
responsible for ensuring appropriate investment policies are in place for all
RCN pension schemes and deficit and funding levels are reviewed regularly
and any issues brought to the attention of Business Committee and Council.
The Head of Finance is responsible for ensuring accurate and timely payments
and that any potential implications impacting the financial position of the RCN
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are raised appropriately. The Director of HR is responsible for ensuring that
pension providers receive accurate and timely information.
10
BANKING AND INVESTMENTS
10.1 Bank accounts
KEY PRINCIPLES
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the opening and closing of all bank and building society accounts are
properly approved in accordance with the Scheme of Delegation, this
includes new bank accounts with existing bankers
decisions to change the main bankers will be made by Council and subject
to a formal tender process
appropriate mandates are kept and maintained for all bank accounts
new signatories on all bank accounts are approved by Head of Finance
any deletions of signatories on all bank accounts are actioned immediately
and reported to the Head of Finance
all bank accounts are reconciled monthly as standard, all reconciliations are
reviewed and signed-off as correct
the RCN’s main bank accounts are reviewed regularly during the month to
check for anomalies
suspected fraud on any account is reported immediately to the Head of
Finance
RESPONSIBILITIES
The Head of Finance is responsible for the opening and closing of all bank
accounts and the addition of new signatories. The Head of Finance is
responsible for ensuring robust mechanisms are in place to protect the RCN’s
bank accounts. Instructions to open and close bank accounts shall be
reported to Council and periodically Council shall be notified of all bank and
building society accounts which are currently open in the name of the RCN.
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Approval route for change to main RCN bank accounts
Approve bank account
Council
Propose new / close bank account
Director of Finance and Corporate Services
Investigate the need for new / close bank
account
Head of Finance
LINKED INFORMATION
Scheme of Delegation
Bank Mandates
Direct Debits and Standing Orders
10.2 Treasury and Short Term deposits
KEY PRINCIPLES
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principles similar to that for bank accounts outlined at 10.1 above
management of short-term investments in line with the RCN Investment
strategy and Financial Strategy
arrangements with new deposit takers must be approved in advance by
Council on the advice of the Business Committee
the initial value and term of short-term deposits will be determined by the
Business Committee on recommendation from its investment sub-group
deposits can be rolled over at the end of the fixed-term by the RCN Head of
Finance if given delegated authority to do so
the business committee receives a report from its investment sub-group
which in turn receives and reviews reports outlining the status of all
deposits and rates obtained when deemed necessary
RESPONSIBILITIES
The Business Committee is responsible for the approval and performance of
short-term investments in line with the appropriate strategies. The business
committee’s investment sub-group reviews and monitors the detail of all shortPage 48 of 59
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term investments and informs the business committee of performance as
appropriate. The Head of Finance is responsible for ensuring robust
mechanism’s are in place to ensure short-term investments are managed in line
with the business committee’s instructions.
Approve new deposit arrangement
Council
Recommend new deposit arrangement
Business Committee
Propose new deposit arrangement
RCN Director of Finance & Corporate Services
Case for new deposit arrangement
RCN Head of Finance
LINKED INFORMATION
Scheme of Delegation
10.3 Investments
Since February 2014 the RCN has a a long-term investment portfolio managed
on its behalf by an independent investment manager.
KEY PRINCIPLES
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

to ensure long-term investments are made in accordance with RCN
financial and investment strategies
changes to the fundamental nature of long-term investments must be
agreed by Council on recommendation of the Business Committee on
receipt of advice and recommendations from its investment sub-group
buying or selling long-term investments must be approved by Council on
recommendation of the Business Committee in accordance with the
financial strategy
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Business Committee through its investment sub-group manage the
performance of the investments through investment managers who are
accountable to the Business Committee through its investment sub-group
accurate records and accounting treatment of all investments in line with
audit and HMRC guidelines
RESPONSIBILITIES
Council is responsible for the approval of all long-term investment holdings.
The Business Committee through its investment sub-group is responsible
for monitoring performance of the investments and reporting to Council. The
Head of Finance is responsible for ensuring accurate and appropriate
accounting records are kept and included in the financial statements.
Approve buy / sell investments
RCN Council
Recommend buy / sell investments to Board
Business Committee
Propose buy / sell investments
RCN Director of Finance & Corporate Services
Information / analysis buy / sell investments
RCN Head of Finance
LINKED INFORMATION
Scheme of Delegation
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10.4 Loans
The RCN currently has no loan arrangements in place There are no current
plans to change this position. However general principles which would apply if
this were to change are:KEY PRINCIPLES
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
to ensure approval is obtained by Council before any loan agreement can
be entered into
Council must agree the limit and repayment terms of any loan entered into
any loan agreement must be in full compliance with the financial strategy
RESPONSIBILITIES
The RCN Council is responsible for any loan agreements made in the name of
the RCN. The RCN Head of Finance is responsible for the day to day
management of any loan agreement taken up.
10.5 Receipts and Cash Handling
KEY PRINCIPLES
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to ensure adequate control is maintained over all income at the point of
receipt
cash and cheques received must be passed to RCN finance promptly and
signed for
all cash and cheques must be entered on the register and banked promptly
any cash or cheques remaining in the office over night must be kept in the
safe
any vouchers held by offices must be treated as cash, kept securely and a
log kept of the vouchers distributed
RESPONSIBILITIES
The RCN Head of Finance is responsible for ensuring robust controls are in
place for the handling and banking of cash and other valuables. The Senior
Management Team is responsible for ensuring the safeguarding of cash and
cheques held within their departments and teams.
LINKED INFORMATION
Cash handling policy
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11
Approved by RCN Council November 2014
BRANCHES AND OTHER RCN GROUPS
11.1 RCN Branches
KEY PRINCIPLES


to ensure adequate records are maintained for all RCN Branches
to ensure all RCN Branches follow the requirements of RCN accounting
policy and procedures
RESPONSIBILITIES
Council, through country and regional Boards, is responsible for ensuring all
RCN Branches comply with accounting and other statutory regulations. The
Director of Finance and Corporate Services and Director of Governance
oversee the preparation and updating of guidance and policies relating to RCN
Branches as approved by Council. The Head of Finance is responsible for
providing advice and guidance to RCN Branches on financial matters.
LINKED INFORMATION
Branch finances: funding sources and use of funds
Branch IT security policy
11.2 Other RCN Groups
KEY PRINCIPLES
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

to ensure adequate records are maintained for all RCN Groups
to ensure all RCN Groups follow the requirements of RCN accounting
policy and procedures
the RCN does not hold money on behalf of third party groups or
organisations unless a formal partnership agreement is in place and
approved by the Director of Finance and Corporate Services
RESPONSIBILITIES
Council is responsible for ensuring all RCN Groups comply with accounting
and other statutory regulations. Council must approve any partnership
agreements entered into by the RCN. The Director of Finance and
Corporate Services and Director of Governance oversees the preparation of
any formal partnership agreements. The Head of Finance is responsible for
providing advice and guidance to RCN Groups on financial matters and
ensuring all financial transactions are correctly accounted.
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12
Approved by RCN Council November 2014
AUDIT AND CONTROL
12.1 Accounting Requirements
KEY PRINCIPLES
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From 1st April 2013 the RCN has operated a 31st December account period
year end.
all financial transactions must be processed through the approved finance
system to ensure that proper, auditable records are kept
all accounting records must be accurate and timely
robust control processes must be in place, reviewed and updated regularly
the annual report and accounts must comply with relevant legislation and
regulation, be audited, and formally approved by Council before being
submitted to the AGM
RESPONSIBILITIES
Council must take appropriate measures to satisfy themselves that all
accounting records are accurate and controls are in place. The Director of
Finance and Corporate Services is responsible for overseeing preparation and
maintenance of accurate accounting records and control processes. The Head
of Finance is responsible for the day to day management of accounting records
and controls.
LINKED INFORMATION
Finance year end template guidance notes
Finance year end template
(guidance issued by the Finance Department annually)
Annual Accounts (includes accounting policies)
12.2 External Audit
KEY PRINCIPLES
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Council appoint external auditors in accordance with statutory accounting
guidelines
Audit Committee must agree the audit plan ahead of the external audit
a full set of statutory annual report and accounts prepared under relevant
legislation and regulation must be made available to the auditors on day
one of the agreed audit
as RCN prepares consolidated accounts the audit of all entities within the
RCN group must take place at either the same time or earlier than the main
RCN audit
all accounting records must be made available to auditors as and when
required
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RESPONSIBILITIES
Council approves the annual report and accounts, on recommendation of the
Audit Committee. The Director of Finance and Corporate Services oversees
the annual accounts process to ensure the accounts are accurate and prepared
on time and the Head of Finance is responsible for the day to day management
of the process.
Council on recommendation of the Audit Committee approve the organisation’s
accounting policies as part of the annual accounts process. The Director of
Finance and Corporate Services ensures all accounting policies comply with
relevant accounting and other statutory regulations and are appropriate to the
organisation. The Head of Finance is responsible for ensuring compliance with
those policies.
12.3 Internal Audit
KEY PRINCIPLES
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

Council should satisfy themselves that all control processes are working as
expected.
Council should utilise the services of an internal auditor as required
satisfying themselves controls are fit for purpose and identify any
weaknesses which should be addressed.
an internal auditor can assist the work of the external auditor but must be
independent from the organisation’s external auditor
RESPONSIBILITIES
Audit Committee appoints internal auditors. Audit Committee is responsible
for agreeing audit plans and monitoring and reviewing the work of the internal
auditor. The Director of Finance and Corporate Services is responsible for
ensuring recommendations arising from both internal and external audits are
implemented as appropriate.
12.4 Regulatory Compliance Framework
KEY PRINCIPLES
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


Council should satisfy themselves that all relevant and applicable guidance
and legislation are complied with by setting and reviewing an Regulatory
and Compliance Management Framework
Framework must ensure all RCN’s statutory obligations as a Royal College
and Trade Union are fulfilled effectively and in line with regulatory
requirements
Audit Committee review the review the regulatory compliance framework on
an annual basis
Details of requirements to comply with all relevant legislation and guidance
is documented and owned by an appropriate party within the RCN
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Chief Executive on receipt of annual certificate of compliance from
framework owners provides overall annual certificate of compliance to
Council
RESPONSIBILITIES
Council is responsible for ensuring the RCN complies fully and appropriately
with all its statutory and regulatory responsibilities. Audit Committee reviews
the regulatory compliance framework annually and suggests amendments to
Council as necessary. Executive Team are responsible for ensuring
compliance with their areas of responsibility.
LINKED INFORMATION
The Regulatory Compliance Management Framework
12.5 Fraud and Corruption
Council is responsible for developing and maintaining a fraud policy. Any
Council member, RCN Office holder, member of staff, or RCN member who
suspects fraud should notify immediately the Chief Executive/ General
Secretary, Director of Finance and Corporate Services, Director of Governance,
Chair of Council or contact the organisation’s external audit partner as
appropriate. The RCN does operate a whistle blowing policy which can be
found on the RCN website.
There is no specific bribery policy within the RCN but it is felt that all elements
of the bribery offence are fully covered in our HR and other policies and
procedures.
LINKED INFORMATION
Whistle blowing policy
Anti money Laundering policy
12.6 Risk
Council is responsible for developing and maintaining a risk policy and
register. Council, Audit Committee and Business Committee review the
corporate business risks at each of their meetings, in-line with the risk policy’s
framework for risk management and assurance.
LINKED INFORMATION
Risk register
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12.7 Gifts and hospitality
Council is responsible for developing and maintaining a gift and hospitality
policy. This will be updated annually. All staff, Council Members, RCN Office
holders and other members, undertaking activities / duties on behalf of the RCN
must comply with the RCN gift and hospitality policy.
The Director of Finance and Corporate Services maintains a gift register.
LINKED INFORMATION
Gift and Hospitality policy
13
OTHER REQUIREMENTS
13.1 Supervisory procedures
Council is ultimately responsible for ensuring adequate segregation of duties
and review of work is in place. Satisfactory arrangements for segregation of
duties protect staff members as well as the RCN. Further detail will be given in
the Finance Procedures. The Director of Finance and Corporate Services,
through the Finance Department is responsible for ensuring the finance
procedures are up to date.
Each department shall be responsible, with assistance from the Human
Resources Department, for maintaining up to date job descriptions for its entire
staff.
Each member of the Senior Management Team is responsible for
ensuring adequate segregation of duties and review of subordinates work.
13.2 Insurance
KEY PRINCIPLES

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
Insurance arrangements must be reviewed and approved in line with the
requirements of the Scheme of Delegation
to ensure that the RCN is adequately insured in respect of the risks that are
reasonably foreseen
to ensure the RCN is adequately insured in respect of the acts of Council
and other office holders, RCN staff and others acting on behalf of the RCN
to ensure any changes to normal operations or practice that may affect the
validity of insurance cover are reported promptly and accurately
any change of business or activity may impact insurance arrangements and
must be reported however small
any leisure or similar activities held on RCN premises or arranged by RCN
staff or Office Holders acting in that capacity must be reported
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RESPONSIBILITIES
Council is responsible for satisfying itself that the RCN is adequately insured.
The Executive Team approves the annual renewal of insurance policies. The
Executive Team and members of the Senior Management Team are
responsible for advising the Head of Finance of any changes which may
impact insurance arrangements. The Head of Finance is responsible for the
day to day management of insurance arrangements.
LINKED INFORMATION
Insurance guidance
13.3 Taxation
KEY PRINCIPLES


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


the RCN is not a charity and is therefore liable for corporation tax and must
submit an annual tax return regardless of whether any tax is due
the RCN has been granted “Mutual Trading” status by the HMRC so
income received from members may not be liable to corporation tax
all profits derived from RCN Trading Subsidiaries may be liable to
corporation tax
all income must be properly accounted for and appropriate HMRC rules
applied
where appropriate income received directly from members should be
identified separately from income generated from third parties or non
members
costs of generating non member subscription income must be clearly
identified where possible. Any apportionment of costs must be approved
by the Director of Finance and Corporate Services
RESPONSIBILITIES
Council is ultimately responsible for ensuring the RCN remains fully tax
compliant and any tax due is paid promptly within HMRC guidelines. The
Executive Team and members of the Senior Management Team are
responsible for ensuring the Head of Finance has the necessary information to
apply the correct HMRC rules with regards to taxation. The Director of
Finance and Corporate Services oversees the preparation and submission of
the annual tax return.
For further information please contact the Head of Finance on 0207 647 3515.
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13.4 VAT
KEY PRINCIPLES


the RCN must ensure that VAT is applied correctly to all its income and
expenditure
the RCN must submit quarterly VAT returns to HMRC within agreed
timescales
RESPONSIBILITIES
Council is ultimately responsible for ensuring the RCN remains fully compliant
with HMRC VAT guidelines and any VAT due is paid promptly. The Executive
Team and members of the Senior Management Team are responsible for
ensuring the Head of Finance has the necessary information to apply the
correct HMRC rules with regards to VAT. The Director of Finance and
Corporate Services oversees the preparation and submission of the annual
tax return.
For further information please contact the Senior Financial Accountant on
0207 647 3519.
13.5 Project Management
The RCN recognises that project management is a well-proven, industrystandard way of delivering projects - and that best practice requires a project
management framework that is integrated into our organisation’s culture.
We acknowledge the benefits that project management provides to the
organisation and its members, and the influence it has on the quality and
delivery of services and products.
It is important that our projects, their delivery, timescales, resources, and
budgets are monitored and controlled. Project management provides a clear
process for achieving this.
Project management must also strengthen the bonds between our activities
and our strategic and financial priorities - providing a clear governance,
reporting and accountability framework that states who is responsible, to whom,
for what and by when.
Consequently, those responsible for the delivery of projects will:



Evaluate the skills and tools required to manage both the style and scale
of projects.
Ensure they have access to the necessary knowledge, tools and
techniques to manage projects effectively.
Ensure that the tools and techniques are used together with the
organisation’s wider business processes e.g. financial management, risk
management, business cases, performance measures.
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Ensure that a clear reporting and accountability framework is put into
place at the commencement of a project.
The RCN recognises a range of project management techniques exist and are
evolving; however, the diversity of our activities does not easily lend itself to a
single, consistent method that is appropriate in every instance. Instead, each
project will be judged on its own merit.
The responsible member of the Senior Management Team will identify and
define the model to be used, in agreement with the sponsor (and stakeholders
if appropriate) at the outset of a project.
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