Reserves Policy
2
SMSU Reserves Policy As a professional, charitable organisation, St Marys’ University Students’ Union (SMSU hereafter) believes it is important that a certain amount of cash should be held in reserve. This would be available should any unforeseen circumstance occur which would affect the organisation financially, or if SMSU needed to close down. As a ‘not for profit’ organisation, it is our aim that the majority of our income should be returned to the membership in the form of the services that we provide. However, it is prudent for us to budget to create a small surplus each year to ensure that we are firstly, prepared for unforeseen circumstances, and secondly, to invest in the development of the organisation. This is a principle that SMSU expects to continue into the future. This policy explains how much money we aim to hold in our reserves, why we need to hold this level, and how this policy will be reviewed. SWOT Analysis SMSU have to be realistic when planning for the future and safeguarding the organisation and have identified a range of finance related strengths, weaknesses, opportunities and threats which may occur over the next three years. Strengths: Event sales, communications and advertising of events, more efficient financial processes (including Financial Operating Manual), financial training for officers and staff, fully functional Trustee Board. Weaknesses: Only one member of staff operating accounts, small team, current limited access to external funding (BAM contract), no current online financial provisions (i.e. shop and ticket sales). Opportunities: Source marketing revenue internally, good working relationships with event organisers and talent management companies (for events), development of J Block (Student Centre) – possible increased footfall. Threats: Cost of living in London increasing, decrease in access to student funding, decrease in student availability to attend events, end of current website contract, rising expectations of students in relation to service provision. Level of Reserves SMSU believes that the lower limit of cash held in reserves should be £80,000. This amount of money provides us with approximately 90 days of essential spending should all of our income streams disappear (both commercial revenue and University grant). We have set the upper limit of cash reserves held as £140,000 which would allow SMSU to develop the organisation through capital investment, potential new staffing and the purchasing of new equipment. We have forecasted our financial performance for the next three years (based on figures from 2011/12 and 2015/16) and anticipate a £35,000 surplus on our accounts for the next four years.
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Transcript of Reserves Policy
SMSU Reserves Policy
As a professional, charitable organisation, St Marys’ University Students’ Union (SMSU hereafter) believes it is important that a certain amount of cash should be held in reserve. This would be available should any unforeseen circumstance occur which would affect the organisation financially, or if SMSU needed to close down. As a ‘not for profit’ organisation, it is our aim that the majority of our income should be returned to the membership in the form of the services that we provide. However, it is prudent for us to budget to create a small surplus each year to ensure that we are firstly, prepared for unforeseen circumstances, and secondly, to invest in the development of the organisation. This is a principle that SMSU expects to continue into the future. This policy explains how much money we aim to hold in our reserves, why we need to hold this level, and how this policy will be reviewed.
SWOT Analysis SMSU have to be realistic when planning for the future and safeguarding the organisation and have identified a range of finance related strengths, weaknesses, opportunities and threats which may occur over the next three years.
Strengths: Event sales, communications and advertising of events, more efficient financial processes (including Financial Operating Manual), financial training for officers and staff, fully functional Trustee Board.
Weaknesses: Only one member of staff operating accounts, small team, current limited access to external funding (BAM contract), no current online financial provisions (i.e. shop and ticket sales).
Opportunities: Source marketing revenue internally, good working relationships with event organisers and talent management companies (for events), development of J Block (Student Centre) – possible increased footfall.
Threats: Cost of living in London increasing, decrease in access to student funding, decrease in student availability to attend events, end of current website contract, rising expectations of students in relation to service provision.
Level of Reserves SMSU believes that the lower limit of cash held in reserves should be £80,000. This amount of money provides us with approximately 90 days of essential spending should all of our income streams disappear (both commercial revenue and University grant). We have
set the upper limit of cash reserves held as £140,000 which would allow SMSU to develop the organisation through capital investment, potential new staffing and the purchasing of new equipment. We have forecasted our financial performance for the next three years (based on figures from 2011/12 and 2015/16) and anticipate a £35,000 surplus on our accounts for the next four years.
SMSU Reserves Policy
Capital Investment – Level of spending and sign off All capital expenditure over the cost of £3000 will require sign off by the SMSU Trustee Board. Capital expenditure or major equipment purchases can only be agreed when the financial reserve exceeds the lower limit of £80,000, or in exceptional circumstances agreed by the Board of Trustees.
Arrangements for reviewing this policy This policy can be reviewed at any time should the chair of the Trustee Board receive official notice from either two Trustees, or three members of the Executive Committee. Updated versions of the policy with the latest figures (in light of any capital expenditure and once the end of year accounts have been produced) should be sent to the first meeting of the Trustee Board each year to agree. The policy should be officially reviewed every three academic years – making the next review date no later than March 2016. Charlie Benson Donna Smith SU President 2012/13 Chief Executive Officer
Document history
Document title SMSU Reserves Policy
Version 2
Persons responsible Donna Smith and SU President (CB )
Author Donna Smith
Document date 08 April 2013
Last amended August 2015
Effective from 25th April 2013
Review date 1 March 2016
Impact Assessment date N/A
History (where discussed / who circulated to / committees considered
SMSU AGM April 2013, SMSU Trustee Board May 2013.
This version – 08.04.2013
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