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Welcome

IET Communities: Managing Money

Find out more about the different operating models available to IET communities and what is required of communities volunteer groups in receipt of funding.

Contents

Introduction

The options open to individual communities will depend upon their specific set of circumstances and volunteers should discuss how they would like to operate with their Community Relationship Manager (CRM) or Communities Resourcing Committee (CRC) or regional Communities Committee (CC) representative.

It is for each individual community to decide how best to manage their resources and activities dependent on their objectives and needs. However, where a community is in receipt of funding from the IET a named IET member or group of IET members should be responsible for those funds and answerable to the CRC or regional CC as appropriate. The IET member responsible for funds is normally referred to as the Treasurer.

What IET funds can be used for

Allocated funds can only be used for the purposes set out in the application; or if circumstances change, for activities that are broadly similar. If a community makes significant changes to the approved activity then further approval needs to be given by the CRC or CC.

Volunteers must ensure that expenditure is kept within the allocated budget and in line with the individual items specified in the application or plan. Any variations should be highlighted to the CRC or CC.

Please click the image to view the process map.

Where funds are held

Funds allocated by the CRC/CC can either be held centrally by the IET or in some cases locally in a bank account in the name of the IET community.

Centrally held funds

Funds for the community are held centrally. The Treasurer or volunteer accountable for funds is responsible for managing community finances and authorising income and expenditure. Volunteers can access funds via a Visa Government Procurement Card (GPC) and/or arranging for suppliers to invoice the IET directly. The IET Finance Department operates a central bookkeeping service that manages the administrative processes and provides regular reports to the community volunteers. This system allows volunteers to maintain management and control of the community budget, but all the administrative financial tasks are undertaken by staff. This is the IET’s preferred option.

Locally held funds

In some cases funds for the community can be held locally in a bank account. Where communities are operating outside the UK and are not able to use a GPC Visa card, or arrange for suppliers to invoice the IET directly, it may be possible to maintain a local bank account in order to manage income and expenditure in the local currency. Community bank accounts can be opened at any mainstream international Clearing Bank in the name of the IET Community, this can include Internet bank accounts but approval must first be given by the CRC/CC and the IET Finance Department. The bank mandate must include at least three signatories with a stipulation that any withdrawal requires two signatures. Details about all new bank accounts, or changes to existing bank accounts used by the community and any subsections that handle their own finances must be sent to the IET Finance Department at the beginning of each session (October) to ensure that accurate records are maintained.

Communities with locally held funds are likely to receive funds into their bank accounts in phases. Where an annual funding application is made, the first 50 per cent of approved funding will be transferred at the start of the session in October on condition that audited accounts have been received from the community and all of its subsections for previous years. Upon receipt of audited accounts for the previous session, and assuming there are no other outstanding issues the second 50 per cent of approved funds is released in February. The funding transferred may be reduced to account for any unspent funds recorded in the accounts from the previous session; this makes it unnecessary for communities to return unspent funds at the end of the session.

How to access funds

Visa credit card - Government Procurement Card

Funds are held centrally and lead volunteers are issued with a GPC which enables volunteers to pay expenses without impacting upon personal finances. Credit card statements must be sent on to the IET Finance Department with attached receipts for all expenditure. The credit card bill is paid from the community’s allocated funds. This is the IET’s preferred method of financing community activity, however we understand that it will not be possible for all communities to operate in this way and other options can be made available.

Invoicing

Communities can set up preferred suppliers to enable their suppliers to invoice for goods and services. Where funds are held centrally the Treasurer or volunteer responsible can set their venue or supplier up as a preferred supplier of the IET and that company can then invoice the IET directly. The Finance team will then pay invoices from the centrally held funds. Where funds are held locally suppliers can invoice the community and the Treasurer can pay the invoice from the local bank account.

Reimbursing volunteer expenditure

Where volunteers have incurred expenses in support of community activity expenses claims can be submitted. If the communities funds are held centrally then expenses claims should be submitted to the IET Finance Department with valid receipts having been authorised by the Treasurer, or other responsible volunteer. If the funds are held locally then expenses claims should be submitted to the Treasurer locally and volunteer expenses reimbursed from the bank account.

Insurance for communities

All approved IET community activities, worldwide, are covered by the IET’s main public liability insurance (PLI) which is arranged through Chubb Insurance. This means that Chubb provides cover to a maximum limit of £1 million per occurrence, for all IET community activities – lectures, workshops, and visits.

In areas where the IET has established separate not for profit entities (NPOs) eg: USA and Canada, local PLI cover should still be purchased, but in these instances central cover can still be purchased by the IET NPO that will cover all community activities in that jurisdiction.

It is important that each volunteer group takes time to read and understand the full insurance guidelines, available from your CRM or CRC/CC representative.

Operational excellence

The CRC aims to ensure that communities from the top down and bottom up are making effective and efficient use of resources to secure future investment. The CRC is looking for:

  • Communities to deliver value for money. The IET provides charitable funds to support IET communities and it is the responsibility of all communities in receipt of funds to consider value for money in the administration of the community and when organising activity;
  • Communities as the IET’s ambassadors. The CRC aims to ensure that communities are promoting the IET brand, products and services adequately and appropriately;
  • Volunteers that have a clear focus on delivering content and activities not administration. It is important that communities focus their efforts and their budget on delivering activity, with administration costs kept below 20 per cent of total budget;
  • Modest (if any) refreshments at community activities and meetings. The principle is that charitable funds should primarily be spent on delivering content, not paying for refreshments. It can be appropriate to provide a drink and/or light snack for delegates;
  • Communities regularly reporting outcomes. It is important that communities report metrics on their activities, including total number of delegates and number of non-members;
  • Communities using the tools and resources available to them. The CRC and CCs are working closely with IET staff to develop self-service tools to support volunteers in the delivery of community activity. The general principle is that the IET makes some staff support available for communities however volunteers should not be reliant on it;
  • Communities’ volunteers working as one team with IET staff. Active members and staff provide the power that drives the IET. The philosophy underlying the way the IET works is a ‘one team’ approach with members and staff working together on an equal footing, and aligned to the same vision;
  • Communities that have considered how they want to develop going forward. Some volunteers have ambitions to grow their communities; some communities will exist for a very short time, perhaps around an event with no desire to develop or grow. Some communities will evolve to reach a new audience, and some will be doing well as they are. There are no right or wrong answers; however the CRC would like to see volunteers considering what their vision is for their community.

Financial management and accounting for locally held funds

The IET’s Board of Trustees allocate a significant sum of charitable funds to support IET communities and this brings with it responsibilities for the IET members in receipt of funding to ensure that they are supporting the IET’s charitable remit and providing value for money.

Communities that manage bank accounts must follow a number of accounting procedures every year, these are outlined below.

CTAP (Centre Treasurers Accounting Package) cashbook

In order to help volunteers manage accounts on an on-going basis the IET provides a cashbook package called CTAP. CTAP is a spread sheet designed for use by volunteers and is sometimes referred to as the community cashbook. The cashbook has an income section which allows volunteers to record items like funding allocations from the IET, delegate income, sponsorship received from local partners and interest received from the bank. There is also an expenditure section to record any costs related to community activities like venue hire, refreshments, awards and prizes and speaker expenses. Detailed instructions about how to complete CTAP is available within the cashbook.

Annual audit of accounts

Communities with a local bank account must engage auditors to help them produce audited annual accounts. Complete audited accounts must be returned to the IET Finance Department in the UK by 1 December every year. The Treasurer or named volunteer responsible for finance should ensure that all income and expenditure has been recorded in the CTAP cashbook. Audited accounts plus any donated facilities vouchers, bank statements as at 30 September and any capital equipment record should be sent to the Finance Department in the UK so that they can be incorporated into the IET’s main set of annual accounts which are reported to the Trustees. The audited accounts must be original documents; photocopies or PDF documents are not acceptable. Community accounts are inspected by the IET auditors.

Auditors

Two people, who must not be members of the community’s committee or leadership team, are required to act as auditors and sign the annual accounts. It is preferable but not mandatory that they have appropriate financial experience. Volunteers may use qualified accountants provided that they understand the IET’s community regulations and can give their accounting qualifications after their signature. In this circumstance only one signature is required. Prospective auditors that would like more information should contact the IET Finance Department.

Taxation

As the IET operates across a number of jurisdictions, particular care must be taken to ensure that all communities comply with local tax legislation where their activities are conducted. Contact the Finance Director’s office for more information.

Social Activity

Charitable funds cannot be used for social activities, but the IET does recognise that social activity has value when building a community.

Social activity falls outside the IET’s aims and objectives as set out in the IET’s Royal Charter and Bye Laws and no expenditure in connection with organising and running social functions can be supported by charitable funds. However, it is recognised that there is a value to social activity and communities can undertake activity of this kind as long as it is entirely financially self-supporting. This means that it must be funded either by income or sponsorship. In order to deal with activities of this kind, a ‘Friends of the IET’ or ‘IET Social Funds’ bank account can be opened to deal with all income and expenditure associated with all social activity planned by the community. Money should under no circumstances be moved between this ‘Friends’ or ‘Social’ account and the main community account. An account of this nature should not be treated as a savings account and any funds accumulated should be used to enable the community to subsidise future social activity.