Financial reserves policy and procedures  

Financial reserves policy and procedures  

Purpose

The purpose of this policy is to provide guidance to the Trustees who are involved with managing the Village Hall (CVH) funds and to ensure that there are adequate internal financial controls over the Charity’s assets and their use.

Financial reserves policy

The Policy supports the running of CVH. Income reserves are described by the Charity Commission as the resources the charity has or can make available to spend for any or all of the Charity’s purposes, once it has met its commitment and covered other planned expenditure.

There may be an occasion when an administrivia act designates reserve funds for a particular project or use.

The reasons why we need reserves

The Charity requires a Reserves Policy to be included in the “Trustees Report and Annual Accounts” for each year end.

Reserves for cash flow and emergencies

Our aim is to maintain a minimum reserve within 10% of the previous financial year’s annual expenditure.

Allowing us to carry sizeable reserves forward will help us maintain the fabric of the building and have reserves available for any future capital maintenance costs, such as the roof replacement. It will also cover emergencies (e.g. boiler/heating breakdown or damage to fixtures and fittings). The 'Village Hall' itself is essentially the charity.

If accessed, efforts should be put in place as soon as practical to restore the reserve balance to the minimum amount. 

Planned ongoing and annual maintenance expenditure will be included in the annual budget. This ensures the hall and car park is maintained in a good condition for the benefit of all hall users and to meet the conditions of the Insurance Policy.

The policy will be reviewed following any significant change in financial circumstances or as a minimum, annually.