Financial Controls Policy

This Financial Controls Policy sets out how Street Lights Collective CIC will manage money, income, expenditure, assets, grants, contracts and financial records. It is designed to protect the organisation, its directors, its staff, its volunteers, its funders, its partners and the communities it serves.

Street Lights Collective CIC works with young people, families, schools, local authorities, community partners and communities affected by trauma, serious youth violence, social exclusion and reduced opportunity. Strong financial controls are therefore essential. They protect trust, prevent misuse of funds, support transparency and show funders that the organisation can manage public, charitable, community and contract income responsibly.

This policy applies to all directors, staff, sessional workers, practitioners, volunteers, advisors, partners and anyone authorised to spend, receive, handle or record money on behalf of Street Lights Collective CIC.

Street Lights Collective CIC will manage its finances according to the following principles.

• Community benefit comes first. All income and assets must be used to further the objects and community benefit purposes of Street Lights Collective CIC.
• Transparency must be built into financial decision making. Income, expenditure, approvals and records must be clear and traceable.
• No one person should have unchecked control over organisational funds.
• Restricted funds must only be used for the purpose agreed with the funder.
• Financial decisions must be properly authorised and recorded.
• Conflicts of interest must be declared before decisions are made.
• Payments must be reasonable, necessary, proportionate and connected to the aims of the organisation.
• The organisation must keep accurate records, receipts, invoices, agreements and reports.
• The Board must receive regular financial information so that it can govern responsibly.
• Financial controls must support delivery, not block delivery, while still protecting the organisation from risk.

Street Lights Collective CIC shall maintain its main bank account in the legal name of the organisation: Street Lights Collective CIC.

The bank account name must match the company name used for grant, contract, funding and registration purposes.

The Board shall approve all bank account opening, closure or major changes to mandate arrangements.

The Board shall ensure that:

• at least two authorised persons are recorded with the bank where possible;
• online banking access is limited to authorised people only;
• bank passwords and security details are not shared;
• bank statements are reviewed regularly;
• bank reconciliations are completed regularly;
• banking access is removed promptly when a person leaves their role;
• payments are made only for authorised organisational purposes.

Street Lights Collective CIC shall operate a clear delegated authority system. This means that different levels of expenditure require different levels of approval.

These limits may be amended by the Board and should be reviewed annually. Funders may set stricter rules for specific grants or contracts. Where funder rules are stricter, the funder rules must be followed.

Street Lights Collective CIC shall prepare budgets for the organisation and for major programmes, projects, grants, contracts and events. Budgets help ensure that programmes are realistic, properly resourced and financially controlled.

Budgets may include:

• staff and sessional worker costs;
• practitioner costs;
• venue hire;
• training materials;
• safeguarding costs;
• DBS checks where applicable;
• insurance;
• transport;
• food and refreshments;
• equipment and resources;
• marketing and communications;
• monitoring and evaluation;
• administration;
• contingency.

Programme Leads must not knowingly exceed an approved budget without approval. Any expected overspend must be reported to the Finance and Compliance Lead and the Directors as soon as possible.

Street Lights Collective CIC may receive income from lawful sources that support its objects and community benefit purposes. Income may include:

• grants;
• local authority contracts;
• school contracts;
• training and consultancy income;
• donations;
• sponsorship;
• community fundraising;
• service level agreements;
• partnership income;
• other income that supports the organisation’s purposes.

All income must be recorded clearly. The record should include the amount, date received, source, purpose, restrictions and any reporting requirements.

Where income is restricted, it must be recorded separately from unrestricted income and must only be used for the agreed purpose.

Restricted funds are funds that must be used for a specific purpose because a funder, donor or contract has placed conditions on them.

Street Lights Collective CIC shall manage restricted funds carefully. The organisation must be able to show funders how the money was spent and what outcomes were achieved.

For each restricted grant or contract, the organisation should record:

• name of funder or commissioner;
• grant or contract amount;
• approved purpose;
• start and end date;
• budget headings;
• reporting deadlines;
• outcome requirements;
• evidence requirements;
• any match funding or contribution requirements;
• named internal lead.

Restricted funds must not be used to cover unrelated costs unless the funder gives written permission.

Expenditure must be necessary, reasonable, properly authorised and connected to the objects of Street Lights Collective CIC.

Before committing expenditure, the person requesting approval should consider:

• Is this cost necessary?
• Is it within the approved budget?
• Does it support the organisation’s objects?
• Is it allowed by the relevant funder?
• Is the price reasonable?
• Is there a conflict of interest?
• Can the decision be evidenced later?
• Is there a safer, cheaper or better alternative?

All spending must be supported by an invoice, receipt, contract, booking confirmation or written explanation where a receipt is not available.

Street Lights Collective CIC shall seek value for money when buying goods, services, equipment, consultancy, venue hire, resources or professional support.

The cheapest option does not always have to be chosen. The organisation may consider quality, safeguarding, reliability, lived experience, cultural competence, insurance, capacity, local benefit and specialist knowledge.

Payments to staff, sessional workers, practitioners and contractors must be properly approved, recorded and supported by clear documentation.

Before payment is made, the organisation should hold:

• a role description, agreement, contract or written confirmation of work;
• agreed rate of pay or fee;
• evidence that the work has been completed or authorised;
• invoice where applicable;
• bank details for payment;
• DBS and safer recruitment records where applicable;
• insurance confirmation where required for contractors;
• conflict of interest declaration where relevant.

Payments must not be made informally or in cash unless there is a clear and exceptional reason approved by the Board.

Reasonable expenses may be reimbursed where they are necessary for carrying out approved Street Lights Collective CIC work. Expenses must be supported by receipts and approved according to the delegated authority levels in this policy.

Examples of allowable expenses may include:

• public transport for approved delivery or meetings;
• mileage where agreed in advance;
• parking where necessary and reasonable;
• materials for sessions;
• food and refreshments for approved programmes or events;
• printing and resources;
• approved safeguarding, training or delivery costs.

Expenses will not normally be reimbursed where they are excessive, personal, unrelated to Street Lights activity, unsupported by evidence, or not approved.

Street Lights Collective CIC will seek to keep cash handling to a minimum. Bank transfer, card payment, invoice payment or secure donation platforms should be used wherever possible.

Where cash is received at an event or activity, the following controls must be used:

• two people should count cash together where possible;
• cash received should be recorded on a cash record sheet;
• the purpose of the cash must be recorded;
• cash should be banked as soon as reasonably possible;
• cash must be kept securely until banked;
• cash must not be used casually for unrecorded spending;
• a receipt should be given where appropriate;
• cash records must be submitted to the Finance and Compliance Lead.

Street Lights Collective CIC shall not hold unnecessary cash reserves or allow cash to be stored by individuals without approval.

Street Lights Collective CIC does not normally operate petty cash. If petty cash is needed for a specific programme or event, it must be approved in advance by a Director and the Finance and Compliance Lead.

Any petty cash arrangement must include:

• a fixed approved amount;
• a named person responsible;
• receipts for all spending;
• a petty cash record sheet;
• return of unused cash;
• review by the Finance and Compliance Lead.

Fundraising must be honest, transparent and consistent with the values of Street Lights Collective CIC. The organisation must not exploit trauma, young people’s stories or community pain for financial gain.

Fundraising communications should be accurate and respectful. Where images, testimonials or case studies are used, consent and safeguarding considerations must be followed.

Donations must be recorded. Where a donor restricts a donation for a particular purpose, the restriction must be recorded and followed.

Street Lights Collective CIC may accept sponsorship or partnership funding where it supports the organisation’s objects and values.

Before accepting sponsorship, the Board should consider:

• whether the sponsor is suitable;
• whether there is any safeguarding or reputational risk;
• whether the funding creates a conflict of interest;
• whether the expectations are clear;
• whether branding or publicity requirements are appropriate;
• whether the arrangement could damage community trust.

Street Lights Collective CIC shall keep records of significant assets and equipment purchased or donated for organisational use.

Assets may include laptops, phones, cameras, sports equipment, training resources, furniture, digital devices, projectors or other items of value.

The asset record should include:

• description of item;
• date acquired;
• cost or estimated value;
• funding source;
• serial number if applicable;
• location;
• person responsible;
• condition;
• disposal date where applicable.

Assets purchased with restricted funds must be used in line with funder requirements.

Street Lights Collective CIC shall aim to build and maintain appropriate reserves to support sustainability, protect delivery and manage financial uncertainty.

The Board shall review reserves at least annually and consider:

• core running costs;
• staff and sessional commitments;
• programme commitments;
• cash flow pressures;
• restricted funds;
• future risks;
• contingency needed for responsible operation.

Reserves should be proportionate. The organisation should not hold excessive unrestricted reserves without a clear reason, especially where funds could be used to further community benefit.

Street Lights Collective CIC shall keep accurate financial records.

Records may include:

• bank statements;
• income records;
• invoices;
• receipts;
• expense claims;
• grant agreements;
• contracts;
• payroll or sessional payment records;
• asset register;
• budget records;
• Board approvals;
• conflict of interest records;
• financial reports;
• annual accounts.

Records must be stored securely and retained in line with legal, accounting and funder requirements.

The Finance and Compliance Lead shall support the preparation of regular financial reports for the Board.

Financial reports should normally include:

• bank balance;
• income received;
• expenditure incurred;
• restricted fund balances;
• unrestricted fund position;
• grant and contract updates;
• cash flow concerns;
• upcoming commitments;
• financial risks;
• actions required.

The Board should review financial information at each ordinary Board meeting.

Street Lights Collective CIC will not tolerate fraud, theft, bribery, corruption, misuse of funds or deliberate financial misconduct.

Examples of financial misconduct include:

• using organisational funds for personal spending;
• creating false receipts or invoices;
• claiming expenses that were not incurred;
• hiding a conflict of interest;
• taking cash donations without recording them;
• directing work to a connected person without approval;
• using restricted funds for unauthorised purposes;
• misleading funders about spending or outcomes;
• bribery or accepting improper gifts.

Any concern about fraud, theft or misuse of funds must be reported to a Director, the Finance and Compliance Lead, or through the Complaints and Whistleblowing Policy. Serious matters may be reported to the police, funders, regulators or other relevant bodies.

Conflicts of interest must be declared before financial decisions are made.

A conflict may arise where a director, advisor, staff member, volunteer, practitioner, partner or connected person could benefit personally from a decision.

Where a conflict exists, the person must declare the conflict and the Board must decide whether the person should take part in the discussion or decision.

Related party transactions must be recorded and approved transparently. Payments to connected persons must be reasonable, necessary, properly authorised and in the interests of Street Lights Collective CIC.

Street Lights Collective CIC shall maintain appropriate insurance for its activities. This may include public liability, employer liability where required, professional indemnity, trustee or director indemnity, event insurance, equipment cover and any other insurance considered necessary by the Board.

The Board shall review insurance arrangements at least annually and before major changes in activity.

Street Lights Collective CIC delivers community facing work and may host events, festivals, workshops, school sessions, family programmes and youth activities. Events may create specific financial risks because of ticketing, donations, cash, suppliers, food, equipment and public attendance.

For significant events, there should be:

• an event budget;
• named event finance lead;
• supplier list;
• approval of costs before commitment;
• record of income and donations;
• cash handling plan where cash is expected;
• receipt storage;
• post event financial review;
• clear record of any surplus or loss.

The NEET Futures Initiative may involve placements, work experience, employer relationships, training providers, travel support, equipment or other practical support for young people.

Any financial support linked to placements must be carefully controlled. The organisation must ensure that payments are appropriate, recorded and connected to agreed programme outcomes.

Where young people receive travel support, equipment, vouchers or other support, the organisation should record:

• young person reference or name where appropriate;
• purpose of support;
• amount or item provided;
• date provided;
• approval;
• receipt or evidence where applicable;
• funding source;
• any safeguarding or confidentiality considerations.

Directors, staff, volunteers and representatives must not accept gifts, hospitality or benefits that could influence, or appear to influence, their judgement.

Small tokens of appreciation may be accepted where they are modest and do not create a conflict. Any significant gift or hospitality offer must be declared to the Board.

Financial records may contain personal data, including staff details, bank details, donor information, young person support records, invoices and contact information. These records must be handled securely in line with the Data Protection Policy and UK data protection requirements.

Bank details, payroll information, expense claims and supplier information must only be accessed by authorised people.

Street Lights Collective CIC shall prepare and file accounts and reports in line with legal and regulatory requirements. The Board is responsible for ensuring that required submissions are completed accurately and on time.

This may include Companies House filings, CIC reporting requirements, Corporation Tax requirements, funder reports, payroll reporting where applicable and any other statutory or contractual obligations.

The Board may appoint an accountant, bookkeeper, independent examiner, payroll provider or other professional support where needed.

Breaches of this policy may result in action depending on the seriousness of the issue. This may include further training, removal of spending authority, disciplinary action, contract termination, referral to regulators, reporting to funders or referral to the police.

Where the breach involves safeguarding, exploitation, coercion, fraud or harm to a young person or adult at risk, the Safeguarding Policy and Complaints and Whistleblowing Policy must also be followed.

This policy shall be reviewed annually by the Board, or sooner if:

• there is a significant financial incident;
• a funder or regulator requires changes;
• the organisation grows significantly;
• new programmes or delivery models create new financial risks;
• there are changes in law or regulation;
• the Board identifies a need for improvement.

This Financial Controls Policy was approved by the Board of Directors of Street Lights Collective CIC.

Date approved: _______________________________

Next review date: ____________________________