Soul of the Junction SCIO Financial Controls & Procedures Policy
Version: 1.0
Approved by the Board of Trustees: 09 April 2026 Reviewed 07.08.2026 by all trustees
Date: 07 Aug 2026
Responsible Officer:
Treasurer 1. Mrs Sylvia Mullen
Purpose
This policy sets out the financial controls and procedures adopted by Soul of the Junction SCIO to ensure that all financial resources are managed responsibly, transparently and in accordance with charity law, the Scottish Charity Regulator (OSCR) requirements and good governance practice.
The policy aims to: protect the charity's assets; safeguard charitable funds; minimise the risk of fraud or financial error; ensure accountability; support informed decision making by the Board of Trustees.
2. Scope This policy applies to: all Charity Trustees; employees; volunteers; contractors authorised to manage finances on behalf of the charity. Everyone handling the charity's finances must comply with this policy.
3. Financial Responsibilities Board of Trustees The Board has overall responsibility for: ensuring sound financial management; approving annual budgets; monitoring income and expenditure; ensuring sufficient financial reserves; approving major expenditure; reviewing financial reports regularly; ensuring compliance with charity law. Treasurer The Treasurer is responsible for: overseeing financial records; monitoring cash flow; presenting financial reports; supporting preparation of annual accounts; ensuring financial controls are followed. Chair The Chair works with the Treasurer to ensure financial governance remains robust and that financial decisions are properly authorised.
4. Banking Arrangements
The charity shall maintain bank accounts in the name of Soul of the Junction SCIO.
The Board of Trustees shall approve all banking providers, authorised signatories and online banking access.
The charity's bank account shall have at least two unrelated authorised individuals responsible for its management and financial control.
Only individuals formally authorised by the Board may access or operate the charity's bank accounts.
No single individual shall have sole responsibility for the authorisation, processing, completion and review of any financial transaction.
Individual online banking credentials must not be shared. Appropriate security measures, including multi-factor authentication where available, must be maintained at all times.
5. Separation of Duties
Financial duties must be appropriately separated between authorised individuals to ensure that no single individual has sole responsibility for a financial transaction from authorisation through to completion and review.
A minimum of two unrelated authorised individuals must be involved in the financial control of every transaction, irrespective of value.
Where one authorised individual initiates, arranges or processes a payment, a second unrelated authorised individual must independently review and approve the transaction.
The individual responsible for undertaking periodic bank reconciliation or financial review should, wherever practicable, be different from the individual who initiated the transactions being reviewed.
The Board of Trustees shall maintain sufficient oversight to ensure these controls are consistently followed.
6. Income
All income shall be recorded promptly and accurately.
Income includes grants, donations, fundraising income, room hire, trading income, membership income (where applicable) and sponsorship.
All income must be banked as soon as reasonably practicable and appropriate records must be retained.
No personal bank account may ever be used to receive, hold or manage charity funds.
7. Restricted Funds Restricted funding must only be used for the purpose specified by the funder. Separate records will be maintained showing: funding received; expenditure; remaining balance.
8. Purchasing
All purchases must represent appropriate value for money and support the charitable purposes of Soul of the Junction SCIO.
For purchases up to £500, a quotation or reasonable market comparison must be obtained where appropriate.
For purchases between £500 and £2,000, at least two quotations must normally be obtained.
For purchases over £2,000, at least three quotations must be obtained.
An exception may be authorised where only one suitable supplier exists, genuine urgency prevents the normal procurement process, or specialist services are required.
The reason for any exception must be documented and retained with the relevant financial records.
These procurement thresholds relate solely to obtaining quotations and do not alter the requirement for two-person financial authorisation. All expenditure, irrespective of value, remains subject to the authorisation requirements in Section 9.
9. Authorisation of Expenditure
All expenditure must support the charitable purposes of Soul of the Junction SCIO and must be supported by appropriate financial documentation.
All expenditure, irrespective of value, requires the approval of a minimum of two unrelated authorised individuals.
There shall be no financial threshold below which a single individual may solely authorise expenditure.
Where one authorised individual initiates, arranges or processes a purchase or payment, a second unrelated authorised individual must independently review and approve the expenditure before payment is completed.
No individual shall have sole responsibility for a financial transaction from initial authorisation through to processing, payment, completion and review.
For expenditure exceeding £5,000, approval must additionally be recorded by the Board of Trustees and documented in the relevant meeting minutes.
No Trustee or authorised individual may approve expenditure from which they, or a connected person, may personally benefit. Any conflict of interest must be declared and managed in accordance with the charity's conflict of interest procedures.
10. Online Banking
Electronic payments are permitted and all electronic payments, irrespective of value, must be subject to two-person financial control.
A minimum of two unrelated authorised individuals must be involved in the authorisation and approval of every electronic payment.
Where the banking platform provides dual-authorisation functionality, one authorised individual shall initiate the payment and a second unrelated authorised individual shall independently approve the payment before it is released.
Where the banking platform does not provide technical dual-authorisation functionality, documented approval from a second unrelated authorised individual must be obtained and retained before the payment is made.
Under no circumstances may one individual have sole responsibility for authorising and completing a payment.
Payment confirmations, approvals, invoices and other supporting documentation must be retained as part of the charity's financial records.
Online banking must be protected by individual secure login credentials and multi-factor authentication where available. Login credentials and passwords must never be shared.
10A. Two-Person Financial Control
For the avoidance of doubt, Soul of the Junction SCIO does not permit single-person financial authorisation.
All expenditure and payments, irrespective of amount or payment method, require the involvement and approval of at least two unrelated authorised individuals.
No individual shall have sole responsibility for any transaction from authorisation to review and completion.
These requirements apply to bank transfers, card payments, online purchases, expense reimbursements, petty cash and all other forms of charitable expenditure.
These controls are mandatory and may not be waived because of the value, urgency or routine nature of a transaction.
11. Cash Handling
The charity shall minimise cash transactions wherever reasonably possible.
Where cash is received, it must be counted and verified by two individuals, and the amount received must be recorded promptly.
A record of the amount, source and date of receipt must be maintained.
Cash must be banked promptly and must not be retained unnecessarily.
No individual may independently receive, record and reconcile cash without appropriate second-person verification.
12. Expense Claims
Trustees and volunteers may claim legitimate out-of-pocket expenses incurred wholly and necessarily on charity business.
All claims must be supported by receipts or other appropriate evidence and must clearly relate to charity business.
Expense payments are subject to the same two-person financial control requirements as all other expenditure and must be appropriately authorised before payment.
No individual may solely authorise payment of their own expense claim.
Where an authorised individual submits an expense claim, they must take no part in approving that claim.
Mileage shall be reimbursed at the rate agreed annually by the Board.
13. Petty Cash
Where petty cash is operated, a fixed float shall be maintained and all expenditure must be supported by receipts or appropriate records.
Petty cash expenditure remains subject to the charity's financial authorisation procedures and must not provide a means of circumventing the two-person financial control requirement.
Petty cash balances must be regularly checked and reconciled, with periodic verification by a second authorised individual.
Any discrepancy must be reported promptly to the Treasurer and, where material, to the Board of Trustees.
14. Budget Monitoring The Board shall approve an annual budget. Financial performance shall be monitored against budget throughout the year. Material variances shall be investigated and reported.
15. Financial Reporting
Financial reports shall be presented to each scheduled Board meeting.
Reports must provide Trustees with sufficient information to exercise effective financial oversight and shall include, as appropriate: bank balances; income received; expenditure incurred; restricted grant balances; unrestricted funds; cash flow; and any significant budget variances.
Trustees must be provided with sufficient financial information to make informed decisions and identify any financial irregularities or emerging risks.
Material financial concerns must be reported promptly to the Board and must not be deferred until the next scheduled meeting.
16. Accounting Records
Complete and accurate accounting records shall be maintained.
Records shall include, as applicable: invoices; receipts; evidence of financial approvals; grant agreements; payroll records; bank statements; contracts; payment confirmations; and procurement documentation.
Financial records shall be retained for a minimum of six years, or for any longer period required by law, a funder or contractual obligation.
Records must provide a clear audit trail enabling transactions to be traced from initial authorisation through to payment and subsequent financial review.
17. Assets The charity shall maintain an Asset Register including: equipment; furniture; IT equipment; vehicles; major purchases. Assets shall be periodically reviewed.
18. Fraud Prevention The charity adopts a zero-tolerance approach to fraud. Any suspected: fraud; theft; bribery; misuse of funds; financial irregularity must immediately be reported to the Chair or Board. The Board will investigate all concerns appropriately. Where necessary, Police Scotland, OSCR or the relevant funding body will be informed.
19. Conflicts of Interest Trustees must declare any financial interest. Trustees with a conflict shall: declare the interest; withdraw from discussion where appropriate; not participate in any decision relating to that matter. All declarations shall be recorded in the minutes.
20. Independent Examination The annual accounts shall be independently examined or audited in accordance with Scottish charity law. The examiner shall be appointed by the Board or Members where required.
21. Financial Reserves The charity will maintain unrestricted reserves where possible to ensure financial sustainability. The Board will review reserve levels annually. A separate Reserves Policy provides further guidance.
22. Review This policy shall be reviewed: annually; following significant legislative changes; after any serious financial incident; whenever the Board considers it necessary.
Approval This policy was approved by the Board of Trustees of Soul of the Junction SCIO.
Chair: Miss Silviya Savova Date: 07.08.2026
Treasurer: Sylvia Mullen Date: 07.08.2026