Guide to completing the year end Branch
return
2015
Contents:
Page:
Guidance for Treasurers
1)
2)
3)
4)
5)
6)
7)
8)
9)
Introduction
When do I need to submit my annual return?
Which form do I need to fill in?
Who checks my annual return before submission?
General principles
Completing the Receipts and Payments Form
Completing the Branch Accounts Form
RBL Branch authority to disclose information Form
Branch Treasurer Checklist
2
2
2
3
4
8
14
30
32
Guidance for Auditors and Independent Examiners
10) The Royal British Legion – audit requirements and criteria
11) Terms of Reference for Audit or Independent Examination
12) Independent examination – Planning Checklist
13) Independent examination – Documentation Checklist
14) Independent examination – Work Programme
1
33
35
40
41
42
1. Introduction
This guide is designed to help Branches complete their annual return.
The Royal British Legion has a legal obligation to produce annual, audited accounts
which include the results, assets and liabilities of all Branches, Counties, trusts and
companies within The Royal British Legion Group. Branches play an important role in
ensuring the accounts are accurate and complete and that the Legion’s auditors have all
the information they need to complete their audit.
The form your branch needs to complete will depend on the value of its assets, the level
of income for the year and whether or not the Branch has a property. The relevant
criteria are set out in Section 4 below.
Please take the time to read this Guide so that you are clear on the information we need
from your Branch. Should you have any queries, please contact the branch accounting
team at branchaccounts@britishlegion.org.uk or to speak to the Branch & Trust
Accountant telephone 0203 057 7039.
2. When do I need to submit my annual return?
Your return must be submitted by 30 September 2015 at the latest. This is the date
stipulated in the Royal Charter. The Membership Council will be informed of non-returns
and action will be taken against those Branches which fail to submit annual returns for
two consecutive financial years.
If you are unable to complete your branch return or believe you may struggle to meet the
30 September deadline you must notify your Membership Support Officer as soon as
possible.
The Legion’s Annual Accounts can only be completed once we receive your return.
Once the form has been signed by the Branch Committee and the Auditor/Independent
Examiner, it should be immediately submitted to your County or District Secretary; you
do not need to wait for the Branch Annual General Meeting to approve the return.
To reduce cost, Branch Treasurers should submit the original form to their Membership
Support Officer, along with copies of the bank statement/s required and disclosure
form. Membership Support Officers will then forward the documents to Head Office. The
Branch Treasurer should make a copy of the annual return and file it, together with the
original bank statements. The auditor or Independent Examiner will keep a copy of the
return for their records.
3. Which form do I need to fill in?
As in prior years, your Branch will need to fill in either a Branch Accounts Form (BA) or
Receipts and Payments Form (R&P).The table below sets out both the reporting
2
requirements (i.e. which form you need to use) and the audit requirements (whether your
Branch requires an audit or independent examination).
Recei pts & Pa yments Form
(R&P)
Bra nch Accounts Form (BA)
Profes s i ona l Independent Exa mi ner (I.E.) Externa l Audi tor
(Auditor)
Forms
Property
Property/Asset Value
Income & Expenditure
R&P
Yes
No
Property/Asset Value
Income & Expenditure
P
P
P
+ £200,000
- £200,000
P
+£30,000
- £30,000
P
Examination/Review
P
I.E.
+ £200,000
- £200,000
+£250,000
-£250,000
BA
Auditor
P
P
P
P
For Branches completing the Receipts and Payments form, please refer to sections 6
& 7 of this guidance document
For Branches completing the Branch Accounts form, please refer to section sections 6
& 8 of this guidance document
Copies of both forms are available in an Excel spreadsheet format from your local
County/District Secretary or from the Finance Department at Head Office – email
BranchAccounts@britishlegion.org.uk
4. Who checks my annual return before submission?
Your annual return will require either an audit or an independent examination by an
Independent Examiner, according to the criteria set out in Section 4 above.
We continue to promote the services of those trained on the Legion Independent
Examiners’ Course to carry out Independent Examinations. Your Membership Support
Officer will have contact details of Independent Examiners in your area. Using Legion
trained Independent Examiners (IE) saves the Legion both time and money. Our own
3
studies have shown Legion trained independent examiners to be a more reliable and
effective way of reviewing branch annual returns.
If you are using a firm of accountants, you must be clear whether you are asking them to
carry out an ‘audit’ or an ‘Independent Examination’. You should clearly specify this in
the letter of engagement. For larger, more complex Branches – where a full audit is
required – the Auditor must issue an ‘Audit Report’ confirming that a full audit was
conducted and also complete the ‘Report of the Independent Examiner’. Smaller
Branches using an accountant to carry out an Independent Examination should ask
them to complete the ‘Report of the Independent Examiner’ included within this Guide. If
you are unsure whether or not you should be employing the services of an auditor
please contact your Membership Support Officer.
The Independent Examiner/Auditor will be required to tick the box on the first page of the
report, confirming that he/she checked all bank account reconciliations performed by the
Branch Treasurer with the bank statements. He/she should sign the return and print their
name, address and contact telephone number.
5. General Principles
The general principles set out below are applicable to both the Branch Accounts and
Receipts and Payments Forms.
5.1.
Branch Certificate and procedure for submission
Please ensure that the Branch Certificate on Page 1 is completed and signed by
the Branch Officers. This certificate confirms that the Branch Committee is aware
that the Branch returns are their responsibility and that the return is accurate and
complete.
It is the responsibility of the Branch Officers to arrange for the accounts to be
examined in accordance with the Terms of Reference issued by the Board of
Trustees.
The procedure for preparing and submitting the Branch Return is as follows:

Branch officers sign the Branch Certificate first to confirm that the accounts
prepared under their stewardship are correctly prepared and include all funds
held by the Branch

The Branch Certificate is then signed by the Independent Examiner (or if
subject to audit, the Auditor issues their audit report) to confirm their
independent opinion on the accounts

The accounts are then submitted to the Membership Support Officer by 30
September, prior to AGM adoption
4

After the accounts have been adopted at the Branch AGM the Branch
Secretary will confirm this by signing the front sheet of the Branch copy of the
return and adding the AGM date
If the branch has used LOMAS to generate their Branch Return the above procedure is
still relevant. LOMAS is a way of creating the Branch Return electronically but it does not
detract from the examination and submission process outlined above.
5.2.
Bank statements
Branches are required to submit a copy of the bank statement for each bank
account held by the branch which shows the balance on the account at 30
June 2013. You do not need to photocopy all bank statements for the period
since the last return.
You should also complete an ‘Authority to Disclose’ form for each bank account
held by the Branch. This is a requirement of the Legion’s auditors (see page 24).
5.3.
Charity Commission Accounting Requirements
As a registered charity regulated by the Charity Commission, the Legion is
required to comply with Charities Act 2011 and the Charities (Accounts and
Reports) Regulations 2008. These regulations stipulate, among other things, that:

Charities must analyse their income, expenditure, assets and liabilities
between restricted and unrestricted funds.
Restricted funds are those where the donor has specified how the funds must
be used by the Branch. Unrestricted funds are those raised to support all or
any of the Legion’s charitable activities. Any restricted funds should be
separately listed on pages 6 and 7 of the Branch Accounts with an
explanation of the restriction in place over their use. These pages can also
be used to record funds which are not restricted in nature but are being
recorded separately by the Branch for other reasons.

Charities must analyse their expenditure between:
o
o
o
expenditure in support of the Legion’s charitable activities
expenditure on fundraising and publicity
expenditure on administration
Treasurers must consider the purpose of the expenditure rather than the
nature of it when deciding where to include it on the form.
For example, the printing of a brochure for a fundraising event is a
fundraising cost, while the printing of letterheads for the office should be
included in administration. Both are printing costs but appear under different
headings on the form.
5
We also need Branches to provide the following information about their
branch, where applicable (please use the continuation sheet in the annual
return)
 Operating leases (e.g. leases for photocopiers, premises etc): List each
lease, its annual cost and expiry date
 ‘Related Party’ transactions: List any payments in the year (other than
reimbursement of expenses) to Branch Officers, or parties connected to
Branch Officers (such as family). For example, if a Branch Officer’s son
provided decorating services to the Branch, please list the person’s name,
relationship to the Branch and amount paid
 Significant transactions after 30 June 2014: Any unusual or large
transactions occurring between 30 June 2014 and the date your accounts are
signed should be listed on the Continuation Sheet
 Significant gifts in kind: You should record any gifts of property or shares
received by the Branch in the period 1 July 2014 to 30 June 2015. This is not
intended to include donated raffle prizes or donations of goods for fundraising
purposes (such as jumble)
 You must complete the membership statistics on page 2
5.4.
Basis of preparation
The accounts are to be prepared on a Receipts and Payments basis – which
means on the basis of income actually received and payments actually made
during the period. Where a Branch is preparing Income and Expenditure Accounts
on an accruals basis to meet local requirements, they must adjust the balance
sheet and receipts and payments to remove accruals and prepayments for the
purpose of this return.
5.5.
Honoraria
Under employment legislation, charities are not permitted to pay round sum
allowances (‘honoraria’) to volunteers. Guidelines issued by the past National
Chairman specifically prohibit payments to volunteers other than for actual
expenses incurred. This includes Legion Independent Examiners, who may not
charge a fee or receive an honorarium.
5.6.
Payment of Grants
Grants to other ex-Service charities may only be made with the prior
authorisation of the Operations Directorate at Head Office. Branches should
contact the External Grants Officer in the Operation Directorate to obtain such
authorisation.
5.7.
Transactions between Branches and other parts of the Legion:
6
All transactions between the Branch and other parts of the Legion must be shown
separately on the annual return. This includes transactions with other Branches,
County, Care Homes, Break Centers, the National Memorial Arboretum (NMA) or
the Poppy Appeal. The name of the party to which payments were made or from
which any sums were received must be specified in the report. This information is
very important for the completion of the Legion’s Annual Accounts to ensure
that income and expenditure is not double counted.
5.8.
Sub-Branches:
If your Branch became a sub-Branch during the period 1 July 2014 to 30 June
2015:
a.
If you are still holding funds at 30 June 2015, you must complete an
annual return, reporting all relevant income, expenditure and bank
balances for the sub-Branch.
b.
If you have followed the procedure in the Management Handbook and
transferred all bank balances and records to the parent Branch, you
should either:
i) submit a final account showing receipts and payments up to the date
of becoming a sub-Branch, and show the transfer of funds to the
parent Branch or;
ii) make a statement to the effect that all transactions from 1 July 2014
have been recorded in the books of the parent Branch, stating the
name of the parent Branch.
No accounts will be required in the future; we only need the above information for
the year in which the Branch becomes a sub-Branch.
5.9.
Currency Denomination
If your accounts are not submitted in sterling, you should clearly state this on the
form.
7
6. Completing the Receipts & Payments Form
Page 2 – Receipts and Payments Summary
Membership Statistics
You must provide these statistics to enable Membership to check their Membership fee
records and update their database. Please complete as follows:
A. Number of Members who pay by Direct Debit
B. Branch Subscription fee (the amount per member retained by the Branch,
excluding the Membership fee)
C. Number of life members in the Branch (As awarded by the National Chairman)
D. Number of cash payers who pay the current Membership fee agreed at Annual
Conference in cash to the Branch
E. Number of members excused from payment of Membership fees (other than life
members) in accordance with GR45/46
F. Number of youth members
G. Total number of all Branch members (A+C+D+E+F)
1. Bank and Cash Balances
Cash in Hand: All cash physically held by the Branch (at the dates shown), such as
petty cash and any cash yet to be banked.
Accounts Held: List details (bank/institution name, sort code, account number) for
all bank accounts held by the Branch, including Welfare Accounts and the Branch
Funds Initiative (BFI) where applicable, showing clearly opening balances at the
beginning of the current financial period (1 July 2014) and closing balances at the
period end (30 June 2015). Each closing balance should be evidenced by a copy of a
bank statement.
2. Total Cash Held
This is the total of cash held by the Branch, including cash in hand, in Branch bank
accounts and in the BFI.
3. Total Increase/(decrease) in cash
This is the difference between Total Cash at the beginning and end of the period. An
increase in cash should be a positive figure and a decrease in cash a negative
figure.
4. Other Assets
List the value of all other assets held by the Branch, including the value of the
Branch Standard and stock items. The value of amounts held in Trust funds will be
completed by Head Office. This is because these assets will be included in the
Legion’s accounts at their 30 June 2015 value.
8
5. Subscriptions Collected
Gross Subscriptions Collected: This should be the total of all receipts from
subscriptions including the DD payers’ branch subscriptions received from Head
Office
Membership Fees paid out: This records the payments made to Head Office.
6. Poppy Appeal Events
This should record income and expenditure related to fundraising events run in the
name of the Poppy Appeal. Money collected as part of the main Poppy Appeal
should be banked directly into the Head Office bank account and should not be
recorded here (unless banked in the Branch bank account in error).
a) Poppy Appeal Events Receipts – Enter money collected for the Poppy Appeal
through Branch events, which has been banked directly into the Branch bank
account, including cash collections
b) Poppy Appeal Expenses - Enter expenses incurred running the PA event and
the payment of the ‘profit’ made on the event to the Poppy Appeal.
7. Fundraising Events
a) Fundraising Receipts – Enter the total receipts from general Branch fundraising
events
b) Fundraising Expenses – Enter the total expenses incurred in respect of general
Branch fundraising events.
8. Monetary Gifts and Donations/ Legacies Received
9
Enter the total monetary gifts and donations received in the year where not
already included above, including donations, refunds, unidentified income etc.
Under Charity accounting regulations, the Legion must show separately in its
accounts the amount raised from legacies. Please include any legacies received
into Branch bank accounts at 9b. This figure should exclude legacies held in trust
at Head Office.
Any legacy received at the branch should be disclosed to Head Office.
9. Interest Received/Paid
Enter the total interest received from funds held in bank and building society
accounts, Branch Funds Initiative (BFI), deposit accounts and any other
deposits. If interest was paid during the year, please enter the relevant amount in
the Payments column.
Income from Investments
Enter the total income received from investments held locally. This includes the
interest on National Savings Certificates and Bonds, Treasury Stock, COIF
investment units, dividends etc. This does not include investments held in the
Branch Funds Initiative (BFI) or in trust funds at Head Office.
10. Welfare Income/Expenditure
This section should be completed by all Branches undertaking welfare activities
whether they operate a separate Welfare bank account or not. Record all income
received towards Welfare Funds in the ‘Receipts’ column, and any welfare
expenditure made in the period in the ‘Payments’ column.
11. Branch Ceremonial Events
Enter expenditure on items such as parades, church services, Standard bearers’
expenses, band costs for ceremonial events etc.
12. Management and Administration Costs
Include here all costs incurred in running the Branch such as meetings & travel
expenses, conference fares paid or AGM expenses, printing, stationery, postage,
telephone, repairs and maintenance of equipment, insurance and bank charges.
Refunds for conference fares should be included here (reducing expenditure)
Where Branches hire rooms for Branch meetings or rent an office for Branch
administration, those costs should also be included here. Enter the total of rent
paid, plus rates, insurance, cleaning or repairs, where applicable.
Please note any audit fees paid should be shown on line 13b
10
13. Purchases
Enter the cost of purchasing stock items such as badges, wreaths etc.
Please note that to comply with HMRC rules, Branches should not be
involved in trading activities
Furniture & Equipment – Enter the cost of purchasing office furniture and
equipment. Include the purchase of Standards in this line.
14. Other income
Use this line for receipts that do not fall into any of the above categories e.g.
proceeds from sale of equipment.
15. Other payments
These lines are to be used to record payments made to other parts of the Legion
(e.g. Counties, Care Homes etc). Please include details of the recipient and a brief
description. This does not include payments to Royal British Legion Clubs (for
room hire etc.) which are independent entities from the charity.
Where necessary split the total Other Payments on page 3.
11
16. Total Receipts/Payments
Add up all the receipts in the Receipts column and all the payments in the Payments
column.
17. Net increase/decrease in funds in the year
Deduct the total payments from the total receipts. The amount must be the same as
box 3 – Total increase/decrease in cash. If payments exceed receipts, show this as a
negative figure, or in brackets.
18. Welfare analysis
State the number of cases that were supported during the period and the total
amount spent for all cases.
Page 3 – Additional Information
Please include here any assets held by the Branch but not included on page 2, or
any other information that might help us understand the transactions made by the
Branch.
12
Please include here details of any significant transactions that took place after 30
June 2014, for example, purchase of a property, disposal of investments, entering
into a new contract or receipt of a major donation or legacy. Any information entered
here should also be brought to the attention of your Auditor or Independent
Examiner.
This section of the form should also be used to provide explanations where any of
the following are applicable:






Gross subscriptions collected are less than subscriptions paid out
Branch Poppy Appeal receipts are greater than amounts paid out
Fundraising receipts are less than payments
Interest has been paid during the year
Income from investments/deposits is disproportionately low (or high)
compared to the size of the asset
The ‘Other payments’ total is disproportionately high compared to the income
of the Branch
13
7. Completing the Branch Accounts Form
(numbering in this paragraph appears as per BA form).
Page 2 – GENERAL ACCOUNT – Receipts & Payments Summary
Membership Statistics
You must provide these statistics to enable Membership to check their Membership fee
records and update their database. Please complete as follows:
A. Number of Members who pay by Direct Debit
B. Branch Subscription fee (the amount per member retained by the Branch,
excluding the Membership fee)
C. Number of life members in the Branch (As awarded by the National Chairman)
D. Number of cash payers who pay the current Membership fee agreed at Annual
Conference in cash to the Branch
E. Number of members excused from payment of Membership fees (other than life
members)
F. Number of youth members
G. Total number of all Branch members (A+C+D+E+F)
Receipts
1. Subscriptions
Gross Subscriptions Collected: This should include all money actually received
from all sources in respect of subscriptions including the DD payers’ branch
subscriptions received from Head Office– taken directly from the receipts side of
the cash book. Do not include monies paid to Head Office from members direct.
Membership Fees paid out: This records the payments actually made to Head
Office.
Subscriptions retained by the Branch: This is the difference between the two
If there are a significant number of members excused from paying Membership
fees under Charter Regulations 45 and 46, this could be a negative figure. If
Branch members are excused from paying Membership fees for any other
reason, the Branch subscription fees paid by the other members must cover this
cost.
Note: Branches and clubs must separately collect their own subscriptions. The
Club must not collect and hold the Branch subscriptions.
1. Gross Subscriptions Collected
Less: Membership Fees paid out
Subscriptions Retained by the Branch
14
2. Branch Poppy Appeal Events
This section relates to fundraising events held by the Branch under the name of
the Poppy Appeal. Please note that money collected as part of the main Poppy
Appeal should be banked directly into the Head Office bank account and should
not be recorded here. If money for the main Appeal has been banked into the
Branch bank account in error, please include it in this section.
a) Events Receipts – Enter any money collected for the Poppy Appeal through
Branch events, which has been banked directly into the Branch bank account.
This will include cash collections.
b) Events Expenses – Enter any expenses incurred in raising funds for the Poppy
Appeal. These may be deducted from the money paid over to Head Office.
c) Paid over to Poppy Appeal
Please note that all money collected for the Poppy Appeal, after deducting any
expenses incurred, should be paid over to Head Office. The sum of 2a), 2b) and
2c) should be nil.
2. Branch Poppy Appeal Events
Events Receipts
Less: Events Expenses
Less: Paid over to Poppy Appeal
Appeal Receipts Retained (should be nil)
3. Branch Fundraising Events
a) Fundraising Receipts – Enter the total receipts from general Branch fundraising
events
b) Fundraising Expenses – Enter the total expenses incurred in respect of general
Branch fundraising events.
c) Net Total – this is the result of a) less b) above.
3. Branch Fundraising Events
Fundraising Receipts
Less: Fundraising Expenses
Net Fundraising income
4. Monetary Gifts & Donations
Enter the total monetary gifts and donations received in the year. Collections of
money other than for the Poppy Appeal should be included here.
5. Legacies Received
Under Charity accounting regulations, the Legion must show separately in its
accounts the amount raised from legacies. Please include any legacies received
into Branch bank accounts at 5. This figure should exclude legacies held in trust
by Head Office.
Any legacy received at the branch must be disclosed to Head Office.
15
6. Interest Received on General Fund Accounts
Enter the total interest received directly from funds held on General Accounts.
This will include interest from bank and building society accounts, Branch Funds
Initiative (BFI), COIF deposit accounts etc.
Income from Investments
Enter the total income received from investments held locally. This includes the
interest on National Savings Certificates and Bonds, Treasury Stock, COIF
investment units and dividends etc. However, this does not include trust
accounts held at Head Office or amounts held in the BFI.
6. Interest Received on General Fund Accounts
Income from Investments
7. Other Income
Badges & Wreaths
Enter total receipts from stock items. Please note that to comply with HMRC
rules, Branches should not be involved in trading activities. Items of low
intrinsic commercial value can be given in return for a suggested donation.
Branches should consult the Finance Department for further advice in this area.
Proceeds from Sale of Investments
Enter the proceeds from the sale of investments held locally. This does not
include transfers between bank and building society accounts or closure of
accounts etc. Such transactions should be included under ‘other’ although are not
of course expenses themselves.
Other (specify)
Enter details of other receipts that do not fall into any of the above categories.
Examples may include proceeds from sale of equipment, trust income received
from Head Office, or transfers from other bank accounts. Please provide brief
details of any amounts recorded in this category.
This section is also used for general fund receipts from other Legion
formations.
16
8. Total Receipts
Add items 1 to 7 above for the current and previous years and enter as item 8.
Payments
9. Welfare Expenditure
This section should be completed by Branches that do not operate a separate
Welfare bank account. Enter the total Welfare Expenditure from Box 28 on page
3 of the form. This figure should also equal Box 30 on page 3 (Surplus/deficit on
Welfare Account) at Box 30 on page 3. (If the Branch operates a separate
Welfare bank account, this section should only be used to show the
transfer of funds from the General to the Welfare Account)
9. Welfare Expenditure (analysis on page 3 )
10. Branch Ceremonial Events
Enter expenditure on parades, church services, Standard bearers’ expenses,
band costs etc.
10. Branch Ceremonial Events
11. Management & Administration
a) Conferences, Meetings & Travel: Enter delegates’ expenses, conference fares
paid, AGM expenses etc. If the Branch received a conference fares refund, this
should be netted off here (reducing expenditure).
b) Audit Costs: Include here any payments made in respect of audit/independent
examination of the Branch accounts.
c) Branch Accommodation Costs: This section should be completed by Branches
that hire rooms for Branch meetings or rent an office for Branch administration.
Enter the total of rent paid, plus rates, insurance, cleaning and repairs where
applicable.
d) Other Costs: Enter the total of all other administration costs, such as printing,
stationery, postage, telephone, repairs and maintenance of equipment, contents
insurance or bank charges.
17
11. Management & Administration
Conferences, Meetings & Travel
Audit
Branch Accommodation Costs
Other Costs
Total Management & Administration Costs
12. Purchases
Badges & Wreaths – Enter total cost of purchasing stock items.
Furniture & Equipment – Enter total cost of purchasing office furniture &
equipment and standards.
Purchase of Investments – Enter purchase of investments held locally e.g.
purchase of new units held in COIF accounts. This does not include transfers
between bank and building society accounts, or opening new accounts, which
should be included under ‘Other Payments’ below. Any purchase of shares must
be pre-authorised by the Deputy Director General.
12. Purchases
Stock of Badges, Wreaths etc
Furniture & Equipment
Purchase of Investments (refer to Branch Guide)
13. Other Payments
These lines are to be used for payments to other sections of the Legion e.g.
Poppy Appeal, Care Homes etc. Payments to other Legion Formations should be
separately identified under ‘other’.
13b. Other (specify)
Enter any other payments that do not fall into the categories above.. Please note
that donations, other than donations to other parts of the Legion, should be listed
in the Welfare Account at section 25 on page 3 of the form. Donations to external
organisations are not allowed unless express permission has been obtained from
the Deputy Director General and the Operations Director.
Where necessary split the total Other Payments on page 5.
18
14. Total Payments
Add items 9 to 13 and enter the total here.
14. Total Payments ( add 9 to 13 )
£
15. Surplus/ (Deficit) on Property Transactions
All transactions relating to Branch property, with the exception of costs included
in Branch Accommodation Costs should be recorded on page 3 of the form in the
Property Transactions column. Enter the total from 38 on page 3 of the form here.
16. Surplus/(Deficit) on General Account
Enter the sum of total receipts minus total payments, plus (or minus) the surplus
(or deficit) on property transactions, i.e. Item 8 minus item 14, plus (or minus)
item 15.
17. Balance at 1 July
Enter the balance carried forward from last year on your General Account
receipts and payments summary. This balance should also agree to the cash
book balance on the General Account as at last year end. Please note that this
balance should include all funds held for use on the General Account, such as
funds held in current accounts and deposit accounts. This figure should also be
the same as the Closing balance (Item 18) for the Prior year in the next column.
18. Closing Balance at 30 June
Enter the sum of item16 plus item 17.
15. Surplus/(Deficit) on Property Transactions
16. Surplus/(Deficit) on General Account
£
17. Opening Balance at 1 October
18. Closing Balance at 30 June
£
Page 3 – WELFARE ACCOUNT – Receipts & Payments Summary
(This section should be completed when there is no separate bank account for Welfare
purposes)
19
Receipts
19. Branch Fundraising Events
a) Fundraising Receipts: Enter the total receipts from Branch fundraising events
for Welfare purposes.
b) Fundraising Expenses: Enter the total expenses incurred in respect of Branch
fundraising events for Welfare purposes.
Net Funds Raised – This is calculated as a) minus b) above. If negative show in
brackets.
Receipts
19. Fundraising Receipts
Fundraising Expenses
Net Funds Raised
20. Monetary Gifts and Donations
Enter the total monetary gifts and donations received in the year for Welfare
purposes. The amount raised from Legacies should be shown separately in box
20a.
20. Monetary Gifts & Donations
20a. Legacy Income
21. Interest Received on Welfare Account
Enter the total interest received from funds held on Welfare Accounts. This will
include interest from bank and building society accounts or COIF deposit
accounts.
Income from Investments
Enter total income received from investments held locally for Welfare purposes.
This includes interest on National Savings Certificates and Bonds, Treasury
Stock, COIF investment units and dividends. However, this does not include
investments held under Branch Initiative Funds (BFI) and trust at Head Office.
21. Interest Received on Welfare A/c's
Income From Investments
22. Other Income
From General Account
Enter any transfers in the year from the General Account to the Welfare Account.
Other (specify)
20
Enter details of other receipts that do not fall into any of the categories above.
Typical examples may be trust income received from Head Office or transfers
from other bank accounts.
22. Other Income
Transfer From General Account
Payments
24. Direct Welfare Payments
Please analyse payments in respect of grants for welfare cases according to the
categories shown. Also please provide statistics on the numbers of cases.
25. Donations Paid
List all donations paid in the year, continuing on a separate sheet if necessary.
Please note that donations should only be made in accordance with Article 3 of
the Royal Charter. If the Branch makes donations that do not comply with the
Charter, then the Branch Committee will be held personally responsible for the
money.
26. Other Charitable Payments
Enter details of other Welfare payments that do not fall into any of the categories
above.
26. Other Charitable Payments
27. Charitable Support Costs
Administration Expenses
21
Enter administration expenses specifically incurred in carrying out Welfare work.
Welfare Expenses
Enter travel expenses reimbursed to caseworkers or Branch Welfare
Representatives in carrying out Welfare work.
27. Charitable Support Costs
Administration Expenses
Welfare Expenses
28. Total Payments
Add items 24 to 27 and enter total here
29. Welfare Committee Expenses Refunded
Enter any refunds received from Head Office for Welfare Committee costs.
29. Welfare Committee Expenses Refunded
30. Surplus/ (Deficit) on Welfare Account
Enter total receipts minus total payments, plus refunds –i.e. Item 23 minus item
28 plus item 29. NOTE: this total is to be shown at item 9 on page 2
31. Balance at 1 July
Enter the balance brought forward from last year on the Welfare Account receipts
and payments summary. This balance should also agree to the cash book
balance on the Welfare Account as at last year end. Please note that this balance
will include all funds held for use on the Welfare Account, so funds held in current
accounts and deposit accounts.
32. Balance at 30 June – Enter the sum of item 30 plus item 31.
31. Opening Balance at 1 October
32. Closing Balance at 30 June
£
Page 3 – PROPERTY TRANSACTIONS
Please complete this section of the form if the Branch:
a) Occupies a property owned by local trustees;
b) Occupies a property owned by the Legion as corporate trustee; or
c) Rents a property, which is sub-let, or could be sub-let, to a tenant.
22
Receipts
33. Rents Received
Enter the total rents received in respect of properties, separating rents received
from Royal British Legion Clubs, other tenants and sub-lettings.
Receipts
33. Rents Received from RBL Club
Other Rents Received
34. Other Receipts
Give details of any other receipts connected with the property. Typical examples
may be service charges or money received from a tenant for their share of
property insurance, rates, repairs and improvements. The Commercial
Directorate administers the sale of Legion properties in the UK. Receipts received
from the sale of overseas property should be included here where such proceeds
have been banked directly into local Branch accounts.
34. Other Receipts
35. Total Receipts
Add the totals of items 33 and 34 above
35. Total Receipts ( add 33 to 34 )
£
Payments
36. Property Costs
Please analyse property costs between the categories shown.
23
Payments
36. Property Costs
Rent Paid
Rates
Property Insurance
Utilities
Property Repairs & Maintenance
Property Improvements by Branch
Cleaning & Caretakers
Legal & Professional Fees
Other (specify)
37. Total Payments – Enter the total of all amounts listed under item 36.
37. Total Payments
£
38. Surplus/Deficit Transferred to General Account or separate Property Account
Enter the sum of total receipts minus total payments, so Item 35 minus item 37.
NOTE: this total is to be shown at item 15 on page 2 of this form.
38. Transfer to/from General Account
Transfer to/from separate Property Fund
£
£
39. Details of Branch Freehold/Leasehold Property
Cost Price/Improvements to 30 June. Enter the original purchase price of the
property (where known) plus the cost of any improvements made to the property
for the period up to 30 June (this figure may have to be estimated). Please note
that if the property is bequeathed to the Legion then the cost of the property is
taken as the market value of the property at the date that it is acquired.
Market Value on a ‘Vacant Possession’ basis. This value will be provided by the
staff from the Commercial Department as at 30 June 2015 – please leave it
blank.
24
Page 4 – SUMMARY OF BRANCH ASSETS AND LIABILITIES at 30 June
40. Bank and Cash Balances
Please give details of cash in hand together with all funds held by financial
institutions. Record the name of the institution, the sort code and the account
number. The cash book balances should be entered into the form and all
balances must be reconciled to the bank statements. The reconciliations must be
available for the auditors or Independent Examiner to review. Please indicate
whether the funds relate to the General Account, the Welfare Account, or Other
Funds by recording the amounts under the relevant heading on the form.
Please Note:
The total funds recorded on the General Account should agree to item 18 on
page 2 of the form.
25
The total funds recorded on the Welfare Account should agree to item 32 on
page 3 of the form.
The total funds recorded under Other Funds should agree to balance of any
additional funds recorded on pages 6 or 7.
Please remember to include copies of 30 June 2015 bank statements,
Investment reports (if applicable) and Agreement to disclose Information
forms with the Branch Accounts sent to the County/District office.
41. Freehold and Leasehold Property
The estimated market value for all freehold and leasehold property will be
provided by the Commercial Department as at 30 June 2015. Please leave this
box blank.
42. Investments
Enter details of investments held, including the cost price and the market value at
30 June. If any investments are held specifically on behalf of the Welfare Account
then please note this on the form. Also indicate whether the investments are held
locally or by Head Office.
26
Please attach statement/s to support each investment reported in this
section
43. Debtors (money owed to Branch)
Please give details of all money owed to the Branch, separately identifying any
monies owed to the Branch by other parts of the Legion.
44. DEBTORS (money owed to Branch)
By RBL
Rents due from RBL Clubs
Rents due from other Tenants
Other debtors (please list)
Total Debtors
£
44. Creditors (money owed by Branch)
Please give details of all money owed by the Branch, separately identifying any
money owed by the Branch to other parts f the Legion and any mortgage
outstanding on properties.
45. CREDITORS (money owed by Branch)
To RBL
Mortgage Outstanding
Other creditors (please list)
Total Creditors
£
45. Total Net Branch Value
Enter the sum of item 40 + item 41 + item 42 + item 43 - item 44 = item 44.
Page 5 – OTHER INFORMATION
27
Please include details of any significant transactions that have taken place since
30 June 2014, and before the submission of the accounts to County and Head
Office.
Such transactions may include the disposal of Investments or the receipt of a
major donation or legacy. Any information entered here should also be brought to
the attention of your Auditor or Independent Examiner.
Page 6 and 7 – OTHER FUNDS
Branches may keep funds in a separate account because of a restriction imposed
by the donor. Other funds may be kept separate for administrative convenience
e.g. funds being raised for the purchase of a new Standard. Branches should
provide sufficient detail as to the reason for holding funds separately to ensure
that Head Office correctly identifies restricted funds.
It should be noted that because there is a need or desire to separate funds
does not mean multiple bank accounts should be used. You may have
different funds but ultimately these can be held within the one bank
account.
Complete the following details for each fund held separately other than in the
General and Welfare Accounts. This may include building funds, or memorial
funds.
Receipts
List all receipts for the period under the same general headings as used in the
General Account.
Payments
List all payments made in the year grouped under Fundraising Costs, Direct
Charitable Payments and Administration expenses.
Balance at 30 June
Enter the sum of total receipts, minus total payments, plus the balance on the
fund at 1 July. Please note that the balance should agree to the figures recorded
at item 40 on page 4 of the form, under Other Funds.
** Donations or grants to other non-Legion charities are not permitted without
pre-authorisation from the Deputy Director General and Director Operations.
28
29
8. RBL Branch Authority to Disclose Information Form
Legion Branches hold a considerable amount of cash at their local banks. Although
the bank statements and funds balances are checked during the independent
examination/local audit, the Legion’s external auditors (this year changed to Deloitte
LLP) also require independent confirmation from all banks and building societies of
the balances on Legion Branch bank accounts at 30 June 2015.
Two blank Authority to Disclose Information forms are included with this pack, and a
copy is on page 24 of this guide. Deloitte have requested that each Branch fill in the
form (please photocopy the form if more than two are needed for different banks)
and copies of the form are submitted with the Branch return. This will enable the
Legion’s auditors to obtain information directly from the bank.
Please note that these forms are required to be completed each year for each
bank account held.
Please ensure you have completed the following information:
a) Bank name and address
b) The form must be dated
c) Write the full name of your Branch
d) The Account Name, Sort Code and Account Number must be supplied for each
account held at the bank
e) The form must be signed by 2 signatories in accordance with the bank
mandate
Example on the following page:
[Bank’s Name]
[Bank’s Address]
<Update reference number (use branch number)
<Insert Date>
Insert Branch Name
< Remember:
30
< Send a separate form
< for EACH Account
31
9. Branch Treasurer Checklist
General Checklist
 The period end, Branch Name, County/District, Address, Contact and Branch Code
are entered correctly
 The Branch Certificate is dated and signed by all 4 Branch Officers
 The Report of the Independent Examiner (IE) section has been completed in full and
signed by the Independent Examiner/Auditor (where a full audit has been
performed, an auditor’s report should also be attached)
 Membership statistics have been completed in full
 Bank/Building Society Name, Sort Code and Account Number has been provided for
each account listed
Overall checks:
□ Arithmetic/addition is correct
□ Opening balance for current period equals previous year closing balance
□ A bank statement has been included that supports the closing balance on each
account
□ The total net receipts and payments matches the movement in total bank
balances for the year
□ Statements/current valuations have been provided for investments (if applicable)
□ Property and rental income/expense details have been provided (if applicable)
□ An “Authority to Disclose Information” form has been completed in full and a copy
included for every account held by the branch
Additional Information Checks
An adequate explanation has been provided for any of the following which are
applicable:
 Gross subscriptions collected are less than subscriptions paid out
 Branch Poppy Appeal receipts are greater than amounts paid out
 Fundraising receipts are less than payments
 Branch entertainment events receipts are less than payments
 Interest has been paid during the year
 Income from investments/deposits is disproportionately low (or high) compared to
the size of the asset
 Material “Other Payments” total – additional detail supplied
32
The following sections are for Auditors and Independent Examiners only
10. The Royal British Legion Audit Requirements and Criteria
Branches of the Legion are not independent charities as they are all constituted
under the same Charter and Registered Charity Number. Where a Branch’s
income is below the level to require an audit under the Charities Act 2011, an
independent examination, or in some cases a full Audit, is still required to:
a) comply with Regulation 72 of the Royal Charter;
b) comply with the internal control procedures of the Legion; and
c) provide comfort to the external auditors of the Legion who will give an audit
opinion on the Consolidated Financial Statements, incorporating all Branches,
and other Legion formations.
Audit Criteria
The Board of Trustees has set the following criteria with which to determine the
level of audit or examination required for a Branch’s accounts:
a) A branch must appoint a Chartered or Certified Accountant to audit the Branch
Accounts if either :
 in the preceding financial period of account its receipts and payments in
aggregate exceeded £250,000 *, or
 at the end of the year the total value of its assets, including the estimated
current market value of property, exceeded £200,000*.
* check exceptions below in paragraph C
Note: The Chartered/Certified Accountant engaged does not need to be a
registered auditor as defined by the Companies Act.
b) A Branch which does not reach the above levels may instead arrange an
independent examination of its accounts by either :
 a qualified accountant being a member of good standing of one of the six
chartered bodies comprising the CCAB, and who is not an officer or
committee member of the Branch, or
 an individual trained on the Legion’s Independent Examiners course who is
independent and not a member of the Branch, or
 an individual who is not a member of the Branch, and has a suitable
background in finance. The Charity Commission website says: “an
independent examiner must obviously be competent for the task that he or
she is to do and they must be familiar with accounting methods, but need not
be a practicing accountant. We have in mind … people such as bank or
building society managers, local authority treasurers or retired accountants.
33
They would all be suitable as independent examiners.” Preference should be
given to qualified accountants where this is possible.
c) When calculating the threshold level for determining whether the Branch requires
an Audit or Independent Examination the following, which will be audited centrally,
may be excluded from the value of income, expenditure or assets:
 Membership Fees payable to Head Office
 Value of Property which is owned by The Royal British Legion as corporate
trustee
 The value of any funds held at Head Office on behalf of the Branch.
 Poppy appeal receipts and payments (only Non-UK Branches may be
excluded)
d) The accounts of Groups need not be examined unless the Group officers wish for
an examination to be carried out. Group accounts which have not been subject to
an independent examination will be reviewed by the County Treasurer.
34
11. Terms of Reference for Audit or Independent Examination
a. Audit
a) An accountant appointed to audit the accounts of the Branch should complete an
audit in accordance with Auditing Standards issued by the Auditing Practices
Board. The auditor will issue an Audit Report to the Branch Committee in the
format prescribed by their professional standards which will be attached to the
accounts. This report must state that an audit has been carried out and must
include an audit opinion. Comments to the effect that they have only prepared
the accounts are not allowed.
b) Where a professional firm agrees with the Branch Committee that the Branch is
below the audit threshold given above, the firm should complete and sign the
‘Report of the Independent Examiner’.
c) The Royal British Legion gratefully acknowledges the contribution of the
accounting profession in carrying out Branch audit assignments at nominal or
less than normal commercial fee levels. Naturally we wish to foster this approach
and should any accountant wish to discuss these terms of reference, they should
contact Branch & Trust Accountant on 020 3465 9159
b. Independent Examination - Qualified Accountants (CCAB)
a) A Qualified Accountant must be used to carry out an Independent Examination
where the income of the Branch exceeds £250,000. Qualified Accountants
appointed to carry out an independent examination of Branch accounts should
follow the guidelines of the Charities Commission contained in their leaflet CC63a
Independent Examination of Charity Accounts 2007 (available free of charge from
the Charities Commission or on their website).
b) Directions 7, 8, 9, and 10 are not applicable, as Branch accounts are prepared on
a Receipts and Payments basis. The examination is still required however when
income is less than £10,000. Any report under Section 12 should be sent to the
Board of Trustees of the Legion, not the Charity Commission.
c) A Letter of Engagement defining the respective responsibilities of Trustee and
Examiner should be provided by the accountant and signed by both parties. The
examiner should sign the Report of the Independent Examiner on page one of
the return form.
c. Independent Examination - Examiners with Other Qualifications.
Examiners without formal accountancy training may be used to carry out an
Independent Examination where the income of the Branch is below £30,000. The
Charity Commissioners leaflet CC63a referred to above provides the best guide
35
to performing an independent examination of a charity. However, examiners
without a formal accounting training may feel that they prefer to follow the more
specific programme set out below.
a) Responsibilities:
It is the responsibility of the Branch officers to maintain books and records and to
prepare the accounts. It is the duty of the examiner to review these records and
express an opinion on them.
The accountant may help prepare the accounts as well as conduct the
examination. However the Branch officers remain responsible for the content of
these accounts.
The Independent Examiner should issue a Letter of Engagement to the Branch
Officers confirming the respective responsibilities.
b) Audit Threshold
Check that the level of income and expenditure and the value of assets falls
below the level which would determine that a full Audit was necessary under
Section 5 of this guide, and that they are therefore able to proceed with an
independent examination.
c) Understanding the Branch and the Legion
The examiner should obtain an understanding of the Legion’s constitution,
Branch organisation, Branch accounting systems, the size and complexity of the
Branch and the nature of its Receipts and Payments and Assets & Liabilities. In
particular, the examiner should be familiar with:




Branch Finances per the Management Handbook chapter 4.1.10
Minutes of Branch Meetings.
Forms and Guidance for Branch Accounts.
This guidance on Independent Examination
d) Accounting Records
The examiner should review the accounting records and be satisfied that they are
adequate for the size and complexity of the Branch.





there should be an up to date cash book (or Branch Account Book) all Branch
accounts, funds and deposits should be recorded in the books
all entries should be supported with invoices, receipts or vouchers which
support the entries
vouchers should be approved by an officer of the Branch independent of the
Treasurer
cash book should be ruled off and reconciled to the bank account on a regular
basis - at least at the annual accounting date
there should be adequate procedures with respect to the management of the
bank account e.g. cheques to require two signatures, bank statements
36

checked to books of account, bank reconciliation reviewed by a Branch
Officer independent of the Treasurer
larger Branches may maintain double entry in a ledger rather than an
analysed cashbook.
e) Detailed checking and comparison with accounting records
Detailed checks should be conducted to confirm that:










cash books are totaled, balanced and reconciled to balances on bank
statements
bank statements are available to support the year end balances for all bank
accounts
bank balances in the Branch’s cash book agree with the balances on page 4
of the Branch Accounts form,
there are no transfers recorded in the cash book to or from bank accounts
which are not part of the Branch Accounts
amounts are correctly extracted from the books and are appropriately
recorded in the General Account, Welfare Account, Property Account or Other
Fund Accounts and the Balance Sheet sections of the Branch Account Forms
amounts are correctly recorded in the various sections of the form and that in
particular expenditure is correctly analysed between fundraising, charitable
activities and administration
Branch social activities are shown separately from fundraising and are selffinancing
No honorarium or staff costs have been incurred. Any such payments
discovered by the examiner should be reported in the report
transactions with other Legion formations are separately identified
donations are separately listed, are within the objects of the charity and any
donations to other non-Legion charities are pre-authorised by the Deputy
Director General and Director Operations.
f) The Examiner should confirm that all sections total correctly and that the net
Receipts/Payments total for the year matches the movement on bank accounts
total.
g) The Examiner should make reasonable enquiries to determine that all funds and
all assets and liabilities of the Branch are recorded in the accounts.
h) The Examiner should confirm that the reason stated for designating or restricting
separated funds is accurate.
d. Analytical Procedures
Carry out a Review as follows:
a) ensure that the figures for prior years are correctly extracted from the prior year’s
accounts and recorded on the form
37
b) obtain adequate explanation of any unusual movements on any item between the
current and prior year’s figures
c) ensure that any changes in the level of bank balances, investments and property
assets are accounted for in the Receipts and Payments Accounts or Fund
statements
d) confirm that all expenditure is consistent with the charitable objects of the Legion
e) review third party documents, vouchers and minutes of the Branch and ensure
that the accounts are consistent with the activities described and any unusual
events mentioned.
f) where possible, verify that all Branch assets are included and that the Branch has
proper title to the assets.
Note: Property held under Corporate Trusteeship and funds on deposit at Head
Office
e. Disclosures
The examiner should check for completeness and adherence to instructions. In
particular the examiner should ensure that the following matters are included on the
form if there is any evidence that there are matters to disclose:
 That the Branch Certificate is completed on page 1 and signed by the Branch
Officers, and the Treasurer in particular.
 Any charges on assets, any mortgages or loans are listed.
 Any unusual or large transactions after the year end are listed.
 Any operating leases with commitments beyond the year end are listed.
 Any transactions with Branch Officers or parties connected to Branch Officers
are listed (other than normal travelling expenses which are independently
authorised).
 Any substantial gifts are listed.
 The property section is complete, where applicable, and that all tenants and
all properties are separately identified.
f.
Evidence of Examiner’s Work
The examiner should keep a record of the work undertaken with schedules of any
relevant information extracted and explanations obtained from the Branch
Officers which have been used to support the Examiner’s opinion of the accounts.
The examiner should retain one copy of the final accounts after signature.
g. Examiner’s Report
On completion of the examination the examiner will:
a) Discuss the results with the Branch Officers to allow them to correct any errors
and amend procedures for the future
b) Sign the Report of the Independent Examiner. The Independent Examiner should
state whether or not there are any matters to be brought to the attention of the
Board of Trustees. Examples may include:

items of expenditure outside the objects of the Charity
38

the fact that information has not been provided by the Treasurer upon
reasonable request

proper records have not been kept

significant differences between the accounts and the supporting
records

not all entries were supported with invoices, receipts or vouchers

not all vouchers were approved by an officer of the Branch
independent of the Treasurer

Branch social activities are not shown separately from fundraising and
they are not self-financing or operated at a deficit
If the Examiner believes that one or more of the Officers of the Branch have been
responsible for deliberate or reckless misconduct they should report directly (and
in confidence) to either the National Chairman or the Deputy Director General of
the Legion at 199 Borough High Street, London SE1 1AA.
Examples would include:
a)
Deliberate abuse
misappropriation.
of
b)
Serious breach of legislative requirement such as material
application of funds clearly outside the objects of the Legion
c)
Serious neglect of the duties of Branch Officers to effectively
manage the Branch.
39
Legion
assets
including
theft
or
12. Independent Examination – Planning Checklist
This is an example of the checklist that an Independent Examiner should consider while
carrying out an assignment.
1. I am not aware of any reason why I should not accept/continue with this appointment
Consider:
–
am I independent?
–
do I have the ability and practical experience for a Branch of this complexity?
–
has my appointment been approved by the Branch?
–
is the Branch aware of my responsibilities – possibly by signing and returning a
letter of engagement?
2. The financial statements or accounting records confirm that the Branch’s gross
income, total expenditure and total assets meet the criteria for Independent Examination
3. I am not aware of any specific requirements for an audit to be carried out, for
example, in any special trusts associated with the Branch or as a condition of any grants
made to the Branch, that prevent me carrying out an independent examination
4. For my first examination of this Branch, I have obtained background information on
the Branch, how it is organised, the extent of its activities, and the nature of its income,
expenditure, assets, liabilities and funds. I have read the relevant sections of the Royal
Charter and Branches’ duties and responsibilities.
For subsequent years, I have checked and updated any details from the previous year.
5. I have described in brief on a separate sheet the accounting records maintained by
the Branch, which I have examined, and the key financial controls operated.
Name of independent examiner:
Date:
40
13. Independent Examination – Documentation Checklist
Checklist of documentation required to conduct an Independent Examination
 Ledger/Account Book/ Cash Book/ Computer print out
 Bank statements (1 July – 30 June) for all accounts
 Bank reconciliations for the period (prepared at least quarterly)
 Membership statements/Membership register for the period
 Details of membership fees
 Full list of stock held (badges, wreaths etc)
 Branch Accounts/Receipts and Payments Forms already signed by Branch Officers
 Minutes of Branch meetings for the period under examination
 Branch Accounts/Receipts and Payments Forms for previous year
 Investment statements (if applicable)
 Building society pass book (complete to 30 June – if applicable)
 Paying-in books
 Cheque books + copy of bank mandate
 Receipts and Payments Vouchers
 BFI statements
 Register of assets held by the Branch
 Property file, including tenancy agreements, copy of trust deed etc
 Signed copy of ‘Authority to Disclose Information Forms’ for each bank account held
by the Branch
41
14. Independent Examination – Work Programme
The Branch needs to ensure that all records are up-to-date and properly filed. This will
help maintain adequate control, accuracy and also save on audit/examination fees.
If any of the answers to these questions is ‘no’, full details of problems encountered and
how they have been resolved should be included on a separate sheet,
1.
2.
3.
4.
5.
Financial statements
Agree figures in the Branch Return to the Branch’s main accounting records
(e.g. cash book).
Obtain other information like bank statements to confirm balances, Minutes
of Committee meetings, The Royal Charter, List of committee members, a
copy of the latest bank mandate, property deeds, property lease details,
membership information.
Consider if the Branch has adequately disclosed the transactions or
interests that Branch members may have with the Branch.
Accounting records
Select a sample of entries from the main accounting records and trace them
back to any supporting prime books that exist (e.g. cash book, petty cash
book).
Select a sample of entries from any of these prime books and trace them to
the main accounting records.
Completed
Satisfactorily
YES
NO
❏
❏
❏
❏
❏
❏
❏
❏
❏
❏
The items selected under 4 and 5 above should be recorded on a supporting working paper and
the prime record to which they were checked or from which they were selected should be noted.
These tests mirror each other but it is important that different items are selected for each test.
6.
Test check the accuracy of some of the accounting books and records (does
the cash book balance?).
❏
❏
State on a separate sheet which records were checked and the sections covered by the checks.
Review of Branch Returns
7.
Consider the Branch’s income, expenditure, assets and liabilities as shown
❏
in the Branch Return. Where there are unexpected fluctuations or
inconsistencies, obtain explanations from the Branch.
8.
If any issues outside the scope of the independent examination have been
❏
identified that suggest the financial statements are mis-stated, the issue/s
has/have been included in the Independent Examiner’s report
(If N/A, tick “Yes”)
If ‘Yes’ include details on a separate sheet and state how they have been resolved.
42
❏
❏
9.
10.
11.
12.
13.
14.
15.
16.
17.
Branch Returns
Review minutes of Branch and other relevant committee meetings:
 identify major events, plans or decisions and changes in Branch
officers and members and ensure they have been properly reflected in
the accounting records, reports and Branch return;
 determine if the Branch has financed activities outside its arena as
outlined in the Royal Charter
Examine the year-end bank reconciliation (and, for more complex Branches,
any other control accounts) to ensure they do not include any unexpected or
unusual items. Ensure the bank accounts are in the name of the Branch and
balances agree with the accounting records.
Transaction testing
Select a sample of receipts and payments from the main accounting records
and cross check the details to supporting invoices, vouchers or other similar
documentation to ensure that the transactions are valid under the powers of
the Branch.
If the Branch has a property, examine the deeds and how the property is
used by the Branch. If the Branch has tenants, check the condition of the
lease (insurance, utility bills, rates and maintenance bills should always be
paid by a tenant).
Has the rent income been collected up to date (confirm you have seen
evidence of money being paid into Branch account or Head Office)?
Note (on a separate sheet) which transactions were examined
Reporting
Prepare a report to the Branch and express your opinion on page 1 of
Branch Accounts or Receipts and Payments form.
Matters identified during the course of the work which suggest legal,
accounting or similar problems should be carefully considered. If they
represent significant instances of deliberate or reckless misconduct in the
administration of the Branch, then a written report should be made to the
Financial Controller, Legion Head Office. 199 Borough High Street, London,
SE1 1AA.
Additional Work to Check Membership details
Review membership numbers and Membership income received and paid
over to Head Office.
Does the Branch have any excused members? If yes, does the Branch
Membership fee cover the “excused amount” to be paid over to Head
Office? If no, examine where the money comes from to cover this deficit.
Membership fees cannot be paid from other charitable funds - only from
Membership fees income.
43
Completed
Satisfactorily
YES
NO
❏
❏
❏
❏
❏
❏
❏
❏
❏
❏
❏
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