HCR Financial Management Policy

Introduction

This document outlines the financial management policies and procedures for Humanity Care Relief (HCR). These guidelines are designed to ensure that HCR’s financial resources are managed efficiently, transparently, and in compliance with legal and regulatory standards. The policies aim to set clear financial objectives, establish a robust system for acquiring and managing funds, and ensure that all financial activities are conducted with integrity and accountability.

Definitions

Board: The Board of Trustees of Humanity Care Relief.
Financial Year: HCR’s financial year runs from 1 January to 31 December.
Treasurer: A member of the Board responsible for overseeing HCR’s financial management, including strategic and operational aspects.
Finance Officer: The person responsible for the day-to-day administration of HCR’s financial transactions.

Note: The roles of Treasurer and Finance Officer may be combined if necessary. The policies are structured to ensure proper oversight regardless of whether these roles are filled by the same individual or different individuals.

Financial Management Overview

1.
Setting Financial Objectives: Establish clear financial goals aligned with HCR’s mission and strategic plan.
2.
Planning and Acquiring Funds: Develop strategies for securing funding from diverse sources, including grants, donations, and other revenue streams.
3.
Effective Fund Management: Ensure funds are utilized efficiently and effectively, adhering to approved budgets and financial plans.
4.
Accountability and Transparency: Maintain clear and accurate financial records, providing regular disclosures to stakeholders, including donors, regulatory bodies, and employees.
5.
Safeguarding Assets: Implement measures to protect the organization’s financial and physical assets from loss or misuse.

Income Policy & Procedures

Purpose: To safeguard, monitor, and control income, including grants, donations, and contributions. This section outlines the procedures for handling invoices, outstanding invoices, and recording payments.

Invoices

1.
Issuance: Invoices must include HCR’s logo, registration details, the date, a description of the services or goods provided, the rate charged, the funding period (if applicable), and payment instructions.
2.
Format: Invoices may be sent electronically in PDF format or by post within two working days of being produced.

Outstanding Invoices

1.
Review and Follow-up: The Treasurer will review outstanding invoices bi-weekly. A second invoice marked “REMINDER” will be issued if payment is not received within 28 days. Invoices unpaid after 56 days will be reported to the Board for further action.
2.
Bad Debts: Debts that cannot be recovered will be written off annually during the preparation of the audited accounts.

Recording Payments

1.
BACS Payments: The Finance Officer will monitor direct payments regularly and update records accordingly.
2.
Cheque/Cash Payments: Cheques and cash are to be processed promptly, with a maximum of £250 cash held overnight in a secure location.

Budgeting Policy and Controls

Purpose: To ensure that projected expenditures are balanced with projected income and that resources are allocated fairly.

Policy

1.
Budget Authority: Budget-holders have the authority to spend within specified limits. Expenditures exceeding these limits require Board approval.
2.
Monitoring: The Finance Officer will provide regular reports on budget performance. The Board must be informed of any potential budget breaches.

Budget-setting Process

1.
Development: The Treasurer prepares a draft budget based on historical data and future projections. The Board reviews and approves the final budget by 31 January each year.

Payroll Policy and Procedure

Purpose: To ensure employees are paid correctly and timely, with proper deductions made and paid to relevant authorities.

Payment of Salaries

1.
Timing: Salaries are paid 50% in arrears and 50% in advance on the 15th of each month.
2.
Deductions and Adjustments: Only statutory deductions will be made unless authorized in writing by the employee. Final salary payments require Board approval.

Termination of Employment

1.
Final Payments: Outstanding debts and adjustments for leave will be processed in the final salary payment. A P45 will be issued with the final payslip.

Purchasing Policy and Procedures

Purpose: To ensure all expenditures are properly authorized and provide a standardized procedure for handling purchases.

Orders – Goods and Services

1.
Authorization Limits: Budget-holders may authorize expenditures up to £150. Purchases between £150 and £500 require Treasurer approval, while those over £500 need Board approval and competitive quotes.
2.
Delivery and Invoicing: Delivery notes must be checked and any discrepancies reported. Invoices are to be processed promptly, with payments authorized by the Treasurer or Board as required.

Petty Cash Policy and Procedure

Purpose: To ensure proper handling of cash, including storage, payments, and record-keeping.

Policy

1.
Cash Handling: Cash should be kept secure, with Expenditure Vouchers supporting all transactions. Regular reconciliations must be conducted.

Accounting and Audit Procedure

Purpose: To comply with statutory accounting requirements and provide accurate data for decision-making.

Procedure

1.
Electronic Management: HCR’s accounts will be managed using approved software. The Treasurer and Finance Officer are responsible for maintaining accurate records and preparing annual accounts.
2.
Audit/Examination: The Board appoints an Auditor/Examiner annually. Accounts must be audited and filed with the Charity Commission within statutory deadlines.

Additional Provisions

1.
Risk Management: Regular assessments of financial risks will be conducted, and appropriate controls implemented to mitigate identified risks.
2.
Training and Development: Trustees and staff involved in financial management will receive ongoing training to ensure they have the necessary skills and knowledge.

Conclusion

These policies and procedures are designed to ensure the financial integrity of Humanity Care Relief. The Board of Trustees holds ultimate responsibility for financial oversight, with the Treasurer and Finance Officer managing day-to-day operations. Regular reviews and updates of these policies will be conducted to ensure compliance with legal and regulatory requirements.

Save Lives with Your Sadaqah & Zakat

We are a UK-based international relief and development charity. Inspired by Islamic teachings of empathy, generosity, and selflessness, we focus on alleviating poverty and suffering across the world. We operate a 100% Zakat Policy, which means every single penny of your Zakat will go to the victims of poverty, wars, and natural disasters.

Before you support our Food Appeal, Water Appeal, Gaza Emergency Appeal, Syria Emergency Appeal, Pakistan Floods Appeal, or any Emergency Appeal, remember to make the intention that you are donating for the sake of Allah first and helping your fellow Muslim brothers and sisters second. This is very important because as Muslims, whatever act of worship we do, we do it for the sake of Allah.

Along with our emergency appeals, we are working on some amazing projects which will, Insha’Allah, bring prosperity to many Muslim homes from around the world. Donate your Sadaqah and Zakat to our projects like Build a Masjid, Livelihoods for the Poor, Sponsor a Widow, Sponsor an Orphan, Sponsor a Nikah, Donate a Sewing Machine, or help educate the Ummah by donating towards education projects, Sponsoring a Hafiz, Sponsoring a Child in Education, or supporting young people in university and Islamic education. Donate with confidence, Insha’Allah, every penny of your donation is your Amanah, and we will try our best to spend it on people who are in need.

Every year, we as Muslims celebrate two seasons the most: one, Ramadan, and two, the first ten days of Dhul Hijjah. During these blessed days, we put all our efforts into pleasing Allah سُبْحَانَهُ وَتَعَالَى by performing good deeds. Here at HCR, we provide you with the platform to perform an important act of worship: charity. In Ramadan, you can donate to the Ramadan Food Appeal, and Ramadan Zakat Appeal, Donate Your Fidyah, Donate Your Fitrana, and Pay Your Kaffarah for Breaking Oath or Breaking Fast, especially during the blessed nights of Laylatul Qadr. In Dhul Hijjah, we are here to help fulfil your duty of performing Qurbani. Whichever cause you choose, choose it with confidence. Insha’Allah.