Somerset County Council Policy for the Management of Unofficial Funds
1.Definition of Unofficial Fund
Unofficial funds are monies that do not belong to Somerset County Council but for which employees of SCC are accountable during the course of their employment
All staff involved with the administration of an unofficial fund must comply with this policy.
The policy applies to all unofficial funds but one-off charity collections, tea, lottery and similar funds are excluded.
All unofficial funds must be clearly identified as such and the relevant SCC Finance Manager informed of the existence of the fund and its purpose (see appendix A)
Neither the name of the fund nor the bank account should include Somerset County Council.
A bank account should be opened for the fund and the bank mandate must include a requirement for two signatories to sign cheques - cheques must never be pre-signed. Unofficial fund bank accounts must not be allowed to overdraw.
All cash should be counted and reconciled in the presence of two people and all income must be receipted and banked promptly in full.
A complete set of accurate financial records must be kept either electronically or manually detailing all income received and all expenditure incurred.
Unofficial fund transactions should not be posted onto the Somerset County Council ledgers (for example - SAP).
A monthly reconciliation must be undertaken using the sheet at appendix B.
Receipts and invoices that support the transactions must be retained for six years plus the current year.
Large balances should be kept in an interest bearing account.
Somerset County Council issued procurement cards must not be used for unofficial fund expenditure.
4.Annual Independent Examination
All unofficial funds should be audited at least once a year by an independent person, ie someone not involved in the running of the funds or related to someone involved.
The fund manager is responsible for ensuring that the person undertaking the independent examination is suitably qualified.
Prior to the audit the checklist at Appendix C should be completed by the fund administrator.
An audit certificate must be retained on file (Appendix D).
Any costs attributable to the independent examination should be charged to the unofficial fund.
In exceptional circumstance unofficial funds could be used by a member of the public to launder money, for example by giving a donation and then asking for a refund. If there is any suspicion that such a criminal act has been attempted it is the fund manager’s responsibility to contact the County Council’s Money Laundering Reporting Officer, MGerrish@somerset.gov.uk.