guide to completing the year end branch return. marked...
TRANSCRIPT
2014
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Guide to completing the year end Branch return.
1
Guide to completing the year end Branch return
2014
Contents: Page:
Guidance for Treasurers
1) Introduction 2
2) Field Year 2
3) When do I need to submit my annual return? 2
4) Which form do I need to fill in? 3
5) Who checks my annual return before submission? 4
6) General principles 4
7) Completing the Receipts and Payments Form 8
8) Completing the Branch Accounts Form 14
9) RBL Branch authority to disclose information Form 28
10) Branch Treasurer Checklist 31
Guidance for Auditors and Independent Examiners
11) The Royal British Legion – audit requirements and criteria 32
12) Terms of Reference for Audit or Independent Examination 34
13) Independent examination – Planning Checklist 39
14) Independent examination – Documentation Checklist 40
15) Independent examination – Work Programme 41
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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 [email protected] or to speak to the Branch & Trust
Accountant telephone 0203 465 9159.
2. Field Year
As you are of course aware a nine month period was drawn to 30 June 2013 as we
adjusted the field financial year. Branches must now prepare a branch return for a full
twelve months beginning with the period 1 July 2013 to 30 June 2014.
Branches should note that the corporate financial year end for The Royal British Legion
Group remains unchanged at 30 September. Any assets held centrally, such as trust
funds and investment properties, will be included in the accounts at their 30 September
valuation. These sections of the return will be completed by Head Office.
3. When do I need to submit my annual return?
Your return must be submitted by 30 September 2014 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.
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 County or
District Secretary, along with copies of the bank statement/s required and disclosure
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form. County/District Secretaries 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.
4. 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
requirements (i.e. which form you need to use) and the audit requirements (whether your
Branch requires an audit or independent examination).
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
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.
Receipts & Payments Form (R&P) Branch Accounts Form (BA)
Profess ional Independent Examiner (I.E.) External Auditor (Auditor)
Forms R&P BA
Property Yes P
No P
Property/Asset Value + £200,000 P
- £200,000 P
Income & Expenditure +£30,000 P
- £30,000 P
Examination/Review I.E. Auditor
Property/Asset Value + £200,000 P
- £200,000 P
Income & Expenditure +£250,000 P
-£250,000 P
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Poppy appeal receipts and payments (only Non-UK Branches may be excluded)
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
5. 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 County office will have
contact details of Independent Examiners in your area. Using these Independent
Examiners (IE) saves the Legion both time and money.
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.
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.
6. General Principles
The general principles set out below are applicable to both the Branch Accounts and
Receipts and Payments Forms.
6.1. 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 Committee? 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
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6.2. 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 2014. 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).
6.3. Charity 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.
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 County/District Secretary by 30 September, prior to AGM adoption
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
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Charities must analyse their expenditure between:
o expenditure in support of the Legion’s charitable activities o expenditure on fundraising and publicity o 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.
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 2013 to 30 June 2014. 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
6.4. 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.
6.5. Honoraria
Under employment legislation, charities are not permitted to pay round sum
allowances (‘honoraria’) to volunteers. Guidelines issued by the past National
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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.
6.6. 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.
6.7. Transactions between Branches and other parts of the Legion:
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 Centres, 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.
6.8. Sub-Branches:
If your Branch became a sub-Branch during the period 1 July 2013 to 30 June
2014:
a. If you are still holding funds at 30 June 2014, 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 Membership 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 2013
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.
6.9. Currency Denomination
If your accounts are not submitted in sterling, you should clearly state this on the
form.
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7. 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
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 GR46/47
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. If None, enter zero
Accounts Held: List details (bank/institution name, sort code, account number) for
all bank accounts held by the Branch, including Welfare Accounts where applicable,
showing clearly opening balances at the beginning of the current field year (1 July
2013) and closing balances at the end of the field year (30 June 2014). 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 (assets), stock items etc.
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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 September
2014 value.
5. Subscriptions Collected
Gross Subscriptions Collected: This should be the total of all receipts from
subscriptions
Membership Fees paid out: This records the payment of Membership fees
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.
(A) (B) C (D) (E) (F) (G)
1 Bank and Cash Balances at
Cash in Hand
Accounts Held (give details of Account Number and Sort Code)
BFI
2 Total Cash Held
3 Total increase/(decrease) in cash
4 Other Assets
Trust Funds held by Head Office*
Stock
Assets
*Please leave blank to be completed at Head Office
Opening Closing
30 Jun 20141 Jul 2013
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8. Monetary Gifts and Donations, and Legacies Received
a) Enter the total monetary gifts and donations received in the year where not already included above, including donations, refunds, unidentified income etc.
b) 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 8b. This figure should exclude legacies held in trust at Head Office.
Any legacy received at the branch must 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. 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)
Example Travel & Meeting expenses £ 287.00 Branch Admin £ 47.00 Expenditure £ 334.00 Less conference fare refund £ 27.00 Net Management and admin cost £ 307.00
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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/I.E. fees paid should be shown on line 12b
13. Purchases
Enter the amount raised and 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 or transfers from funds outside of branch funds.
Do NOT include money drawn from a BFI account this is not income.
12
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. 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.
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 should be the same
as box 3 – Total increase/decrease in cash. If payments exceed receipts, show this
as a negative figure, or in brackets.
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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.
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
16 Total Receipts / Payments
17 Net Increase / decrease in Funds for the Year
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8. 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
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) GR 46/47
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 – 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 46 and 47, 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
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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.
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.
4/5. Monetary Gifts & Donations, and Legacies Received
Enter the total monetary gifts and donations received in the year. Collections of
money other than for the Poppy Appeal should be included here.
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 5b. This figure should exclude legacies held in trust by Head Office. Any legacy received at the branch must be disclosed to Head Office.
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
Fundraising Receipts
Less: Fundraising Expenses
Net Fundraising income
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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.
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.
4 Monetary Gifts & Donations
5 Legacies Received
6. Interest Received on General Fund Accounts
Income from Investments
17
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)
10. Branch Ceremonial Events
Enter expenditure on parades, church services, Standard bearers’ expenses,
band costs etc.
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.
9. Welfare Expenditure (analysis on page 3 )
10. Branch Ceremonial Events
Example Conferences Travel & Meeting expenses £ 287.00 Less conference fare refund £ 27.00 Net cost £ 260.00
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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.. Any
purchase of shares must be pre-authorised by the Deputy Director General.
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.
11. Management & Administration
Conferences, Meetings & Travel
Audit
Branch Accommodation Costs
Other Costs
Total Management & Administration Costs
12. Purchases
Stock of Badges, Wreaths etc
Furniture & Equipment
Purchase of Investments (refer to Branch Guide)
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14. Total Payments
Add items 9 to 13 and enter the total here.
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.
Page 3 – WELFARE ACCOUNT – Receipts & Payments Summary
(This section should be completed when there is no separate bank account for Welfare purposes)
14. Total Payments ( add 9 to 13 ) £
15. Surplus/(Deficit) on Property Transactions
16. Surplus/(Deficit) on General Account £ £
17. Opening Balance at 1 July
18. Closing Balance at 30 June £ £
20
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.
20. Monetary Gifts and Donations, and Legacy Income
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.
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.
22. Other Income
From General Account
Enter any transfers in the year from the General Account to the Welfare Account.
Other (specify)
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.
Receipts
19. Fundraising Receipts
Fundraising Expenses
Net Funds Raised
20. Monetary Gifts & Donations
20a. Legacy Income
21. Interest Received on Welfare A/c's
Income From Investments
21
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.
24. Direct Welfare Payments
Hospital Visiting
Other Costs
Total Welfare Grants Paid
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.
27. Charitable Support Costs
Administration Expenses
Enter administration expenses specifically incurred in carrying out Welfare work.
Welfare Expenses
22. Other Income
Transfer From General Account
26. Other Charitable Payments
22
Enter travel expenses reimbursed to caseworkers or Branch Welfare
Representatives in carrying out Welfare work.
28. Total Payments
Add items 24 to 27 and enter total here
29. Welfare Committee Expenses Refunded
Enter any refunds received from Head Office/County/District for Welfare
Committee costs.
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.
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.
Receipts
27. Charitable Support Costs
Administration Expenses
Welfare Expenses
29. Welfare Committee Expenses Refunded
31. Opening Balance at 1 July
32. Closing Balance at 30 June £
23
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.
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.
35. Total Receipts
Add the totals of items 33 and 34 above
Payments
36. Property Costs
Please analyse property costs between the categories shown.
37. Total Payments – Enter the total of all amounts listed under item 36.
Receipts
33. Rents Received from RBL Club
Other Rents Received
34. Other Receipts
35. Total Receipts ( add 33 to 34 ) £
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 £
24
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.
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.
38. Transfer to/from General Account £
Transfer to/from separate Property Fund £
39. Details of Branch Freehold/Leasehold Property
Details of Property
Is property Freehold or Leasehold ?
Date Acquired (if known)
Cost Price/Improvements to 30 June 2013 £
Market Value at Year End* £
Is the property owned by The Royal British
Legion as Corporate Trustee? Yes/No
Current Annual Rent Receivable £
Date of next Rent Review
Name of Tenant
For additional properties please continue on page 8
*Please leave blank - to be completed by Head Office
25
Market Value on a ‘Vacant Possession’ basis. This value will be provided by the
staff from the Commercial Department as at 30 September 2014 – please leave it
blank.
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.
The total funds recorded on the Welfare Account should agree to item 32 on
page 3 of the form.
Please remember to include copies of 30 June 2014 bank statements,
Investment reports (if applicable) and Authority to disclose Information
forms with the Branch Accounts sent to the County/District office.
at 30 June 2014 at 30 June 2013
40. BANK AND CASH BALANCES
General Account
Cash in Hand £ £
Accounts Held
Please give details of financial institution, account number and sort code
Branch Fund Initiative(BFI)
Total for General Account (balance must agree to 18 on page 2 ) £ £
Welfare Account
Please give details of financial institution, account number and sort code
Total for Welfare Account (balance must agree to 32 on page 3 ) £ £
Other Funds (details on page 6 & 7 )
Trust funds held by Head Office* £ £
Other £ £
£ £
Total Bank and Cash Balances £ £
26
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 September 2014. 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.
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. 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 of the Legion and any mortgage
outstanding on properties.
41. FREEHOLD AND LEASEHOLD PROPERTY
Estimated Market Value at 30 June 2014/ 30 June 2013 £ £
42. INVESTMENTS Original Market
Details Cost Value
43. DEBTORS (money owed to Branch)
By RBL
Rents due from RBL Clubs
Rents due from other Tenants
Other debtors (please list)
Total Debtors £ £
27
45. Total Net Branch Value
Enter the sum of item 40 + item 41 + item 42 + item 43 - item 44 = item 45.
Page 5 – OTHER INFORMATION
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.
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
44 CREDITORS (money owed by Branch)
To RBL
Mortgage Outstanding
Other creditors (please list)
Total Creditors £ £
45. TOTAL NET BRANCH VALUE (BOX 40+41+42+43-44) £ £
28
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
9. 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 2014.
Branch Name OTHER FUNDS Branch Code
FOR THE YEAR ENDED 30 JUNE 2014
Name of Fund:…………………………… Current Period Prior Year
Is it a restricted fund? Yes/No
If not restricted, reason for keeping separate
Receipts
Please List:
Total Receipts
Payments
Please list
Total Payments
Surplus/(Deficit) on Fund
Opening Balance at 1 October
Closing Balance at 30 June £ £
30/06/201330/06/2014
29
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 and submit it to their bank (please copy the form if more than three 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.
Before sending the form to your bank(s), please ensure you have completed the
following information:
c) Bank name and address
d) The form must be dated
e) Write the full name of your Branch
f) The Account Name, Sort Code and Account Number must be supplied for each
account held at the bank
g) 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]
< Remember:
< Send a separate form
< for EACH Account
Insert Branch Name
<Insert Date>
<Update reference number (use branch number)
30
31
10. 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
11. 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 GR60 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) 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.
a) 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 related to a branch member, or
an individual trained on the Legion’s Independent Examiners course who is
independent and not a member of the Branch, or related to a branch member
or
an individual who is not a member of the Branch or related to a branch
member, 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 …
33
people such as bank or building society managers, local authority treasurers
or retired accountants. They would all be suitable as independent
examiners.” Preference should be given to qualified accountants where this
is possible.
b) 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)
c) 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
12. 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 £30,000. 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 as per the Membership Handbook chapter 4.1.9
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 self-financing
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.
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 of Legion assets including theft or
misappropriation.
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
13. 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
14. 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
Building society pass book (complete to 30 June)
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
Reviewed a signed copy of the MS1
41
15. 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,
Financial statements
Completed
Satisfactorily
YES NO
1. Agree figures in the Branch Return to the Branch’s main accounting records
(e.g. cash book).
❏ ❏
2. 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.
❏ ❏
3. Consider if the Branch has adequately disclosed the transactions or
interests that Branch members may have with the Branch.
❏ ❏
Accounting records
4. 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).
❏ ❏
5. Select a sample of entries from any of these prime books and trace them to
the main accounting records.
❏ ❏
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
Branch Returns
Completed
Satisfactorily
YES NO
9. 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
❏ ❏
10. 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
11. 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.
❏ ❏
12. 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).
❏ ❏
13. 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
14. Prepare a report to the Branch and express your opinion on page 1 of
Branch Accounts or Receipts and Payments form.
❏ ❏
15. 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
16. Review membership numbers and Membership income received and paid
over to Head Office.
❏ ❏
17. 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.
❏ ❏
