Financial Regulations

Financial Regulations

Appendix 9 of the College’s Financial Regulations are issued annually to the Student Association at the start of the first academic Term.

First Issued: 10 December 2003

Contents

1 Introduction.
2 Conditions on which grants from the College are paid to the Student Association.
3 Details of conditions.
3.1 Approval of Student Association constitution.
3.2 Requirement of Student Association to agree to abide by these Regulations.
3.3 Authorised expenditure of grant.
3.4 Personal guarantees.
3.5 Register of office bearers.
3.6 The bank account for the grant.
3.7 Accounting for the grant.
3.8 Payments of a political nature.
3.9 Student loans.
3.10 Donations to charities.
3.11 Contracts.
3.12 Inventories.
3.13 Audit.
3.14 Insurance
4 Audit Certificate
5 Personal Guarantee for Association Office Bearers

1 Introduction

These financial regulations were originally prepared by the Senior Department of Education of Strathclyde Regional Council, based on advice received from the Finance Department (Internal Audit) and the Chief Executive’s Department (Legal Services) and followed consultation with the National Union of Students. They are issued with the full approval of the College’s Board of Management. They were originally produced: 

a) To provide the Student Association at the start of the term with advice on sound financial procedures and to advise on practices which are not acceptable to the College.

b) To advise office bearers of their financial obligations/duties regarding the grant paid by the College (i.e., the grant is funded from public money and must be accounted for in accordance with existing legislation.

c) In response to recommendations originally made by SRC Internal Audit as a result of Police investigations into student association affairs.

d) As a result of the growing concern of the Education Committee with the manner in which certain student associations were using their grants.
e)At the request of college boards of management.

It must be emphasised that these regulations apply only to the grant paid by the College Board of Management and compliance with them is now a condition of the grant being paid.  However, it is considered advisable and prudent to apply them to all financial aspects of the Association.

These guidelines should be read in conjunction with the College’s Financial Regulations and the Constitution of the Student Association.

2 Conditions on which grants from the College are paid to the Student Association

The financial regulations in section 3 describe, in more detail the following conditions which are now attached to the payment of the grant:-

1 Before any grant is awarded, the College Board of Management are required to approve the Student Association constitution and any amendments hereto. 

2 Written agreement to adhere to and be bound by these regulations. 

3 Expenditure to satisfy the aims and objectives of the Association as laid down in its approved Constitution. 

4 Expenditure to be within the legal requirements of government legislation. 

5 Office bearers to give written personal guarantee to the College Board of Management that they will indemnify the College Board of Management in respect of any expenditure of grant not in accordance with these regulations. 

6 A register of office bearers to be maintained. 

7 The grant is to be kept and accounted for separately from all other funds of the Association. 

8 The bank mandate is to allow College auditors access to grant account information from the bank. 

9 No payments of a political nature to be made. 

10 No student loans to be made. 

11 No donations to charities to be made.

12 No contracts which bind the following years’ Association to be entered into. 

13 Inventories to be maintained. 

14 Audits to be carried out as laid down in these regulations. 

The Board of Management is advised that if the above conditions to the grant are not adhered to or they are not satisfied with the audited accounts they may:- 

1 Deduct a similar sum from the next term’s allocation and/or 

2 Refuse to release the next term’s allocation and/or 

3 Hold the office bearers of the Association liable for any sums deemed to have been misappropriated and take steps to recover such sums from the office bearers, and/or 

4 Recover any sums already paid in that academic year.

3 Details of Conditions

3.1 Approval of Student Association Constitution

The Student Association must have its constitution, and any amendments thereto, approved by the College Board of Management. The Board of Management are advised that until such approvals have been granted no funds should be released to the Student Association. The Student Association are referred to the model constitution for guidance when drafting or revising their constitution. The Board are unlikely to approve any constitution which varies from the model constitution regarding the main aims of the Association and the clause regarding contracts.

3.2 Requirement on the Student Association to agree to abide by these regulations

The Student Association must notify the College Board of Management, in writing, at the start of its term in office, that its office bearers have read and agreed to abide by these financial regulations. The Board is advised that, until such an agreement is received by them, no grant should be released to the Student Association. Non-compliance with these regulations will result in the cessation of grant and action being taken against the office bearers to recover such sums as are deemed to have been misappropriated or not spent in accodance with the regulations. The office bearers may also be liable for any legal costs incurred in recovering the sum concerned.

3.3 Authorised expenditure of grant

Any expenditure authorised by the Student Association which is incurred using the funds received from the Board of Management should satisfy the aims and objectives of the Board of Management as laid down in its approved constitution.

3.4 Personal guarantees

The office bearers of the Association are responsible for ensuring that the grant was awarded by the College is used for the intended purposes for which it was granted and is properly accounted for in accordance with these financial regulations. To this end the office bearers must sign a personal guarantee that they will repay any sums expended which do not comply with these regulations. Authorised blank personal guarantees should be available in the College and only these will be accepted. 

The College will not pursue Office Bearers when it can reasonably be concluded that a particular person or persons can be held responsible for non-compliance with the financial regulations.

3.5 Register of Office Bearers

The College Board of Management must be informed of the names of office bearers and of changes during the year. For this purpose a register of office bearers must be passed to the College at the start of each academic term and alterations should be notified immediately to the Head of Student Services. Up to date information of this nature must be provided to the College Principal on request. The register must show, for each office bearer, the following details:- 

a) Name 
b) Address 
c) Position held 
d) Date elected 
e) Date assumed duties 
f) Date resigned/removed from office 
g) Specimen signature 

Each office bearer is responsible for ensuring that where his/her signature was supplied to the bank as an authorised signatory, the bank is informed, in writing, when he/she is no longer an authorised signatory.

3.6 Disbursement of Funds

The funds available will be held in a bank account jointly administered by the College’s Finance Manager and the Head of Student Services and the Student Association.

3.7 Accounting for the Grant

Separate accounting records must be maintained for the grant which satisfy the auditor and the College that the grant has been used in accordance with the Student Association constitution and the financial regulations of the College. The College is empowered to request monthly accounts from the Student Association detailing expenditure for that month. These monthly accounts do not require to be audited.

3.8 Payments of a Potitical Nature

The Lord Advocate has issued the following statement concerning the proper use of Student Association funds:- While students or groups of students are entitled to use their own money for any unlawful purpose, Union officials are restricted in law in their expenditure of Union money to the purposes for which it was entrusted to them. These purposes will usually be gathered from the constitution of the Union or from any special documents establishing the fund in question. Generally it will not be lawful to spend Union money on matters which have no connection with the Union in question, for example, political purposes unconnected with the Union. The courts will enforce the proper use of such funds. Union officials should in cases of doubt take legal advice on these matters.” It is a condition of the grant that no donations to political parties are made. That is: Money may not be lent to, or accounts paid on behalf of, any political party. A political party club within the College may not be used as a means of transferring funds to a political party. Donations to any club must be in accordance with the Student Association constitution and should be used to benefit the students within the club and the wide body of students. To this end membership of the club must not be unduly restrictive. The club must be open to and for the benefit of the student body as a whole.

3.9 Student Loans

Student loans must not be paid from the grant awarded by the College. (see financial guidelines for possible alternatives.)

3.10 Donations to Charities

Donations to charities must not be made from the grant awarded by the College. (see financial guidelines).

3.11 Contracts (See also Conditions)

Any written contracts entered into by the Association must be passed to the College with the audited accounts. These contracts must comply with condition 12 in these regulations and comply with any clause in the Student Association constitution regarding contracts. It must be made plain to any contractor that the College will not be held responsible for Student Association debts.

3.12 Inventories

The Student Association must maintain inventory records. A new Student Association, on taking up office, will be given a copy of the closing inventory prepared by the previous year’s Association. This inventory will contain details of all equipment both owned and leased by the Association and it must differentiate between items bought from the College grant and items purchased from other sources of income. Proof of purchase and source of funding records must also be retained. The inventory received at the start of term must be checked, signed by the office bearers, and returned to the College Head of Student Services. Thereafter the office bearers will be held responsible for items on the inventory for their term in office. Any alterations during the year must be notified to the Head of Student Services as soon as possible and an updated copy of this register must be signed and passed to the Head of Student Services at the end of each term and by 30 June each year.

3.13 Audit

An income and expenditure statement and a balance sheet must be prepared (at the end of each term and by mid June each year) by the treasurer detailing every item of expenditure from the grant (including petty cash details). These must be audited by an independent person, unconnected with the Student Association – preferably a qualified accountant, bank manager or person with a business background but NOT a member of the College Board of Management. It was proposed by the Audit Committee in May 2001 and agreed by the Board of Management, that the College?s external auditors shall perform this function, at the expense of the College. These statements must be accompanied by an addendum to the accounts listing all outstanding debts and the most recent bank statement, if this is applicable. These audited accounts must be presented to the Board of Management at the end of each academic session with the final accounts presented by 30 June each year. It is a condition of the grant that such audited accounts be presented to the Board of Management. In addition to the above should there be any change in the signatories or any other persons involved in administering the funds or any reports of suspected misappropriation an interim audit must be carried out. The College retains the right to examine the accounts of Student Association periodically and/or in the event of a suspected misappropriation. Interim statements and audited accounts/backup records must be submitted at the request of the Board of Management. Where the audit has not been carried out by a qualified accountant the auditor must sign a standard docquet to the accounts. This must be worded as per the Certificate (see Section 4).

3.14 Insurance

The College will extend its Public Liability insurance cover in respect of Student Association activities at no cost to the Association. Charitable events (e.g. Rag Weeks) are specifically excluded from this cover, and the Association must advise the College of any other events which may have insurance implications. This will include such activities as open days, stalls set up in public places, social events held on College premises, sports events, and any events in general where members of the public either participate or spectate. The Association should always err on the side of caution when considering whether to consult the College on any matter which may conceivably have an insurance implication. This will allow the College to confer with their insurers on any liability issue or exclusion which may be in force.

4. Audit Certificate

Student Association accounts “I hereby certify that the accounts of South Lanarkshire College Student Association for the period / year to …………………………….. presents a true and fair view of the Association?s financial operations for the period. I confirm that adequate financial records are maintained by the Association and that expenditure incurred complies with the Financial Regulations for College Student Associations issued by the College in June 2006

Signed ……………………………………………………………….
Occupation ……………………………………………………………
Address ………………………………../……………………………
Relationship to Student Association……………………………………………… (e.g. bank manager, business associate etc.)

Auditors must be provided with a copy of these financial regulations when appointed and allowed unrestricted access to financial records: backup information; given the authority to ask questions of the bank manager and office bearers, etc.

5 Personal Guarantee for Association Office Bearers

A copy of this document must be signed by all office bearers of the Student Association as laid down in Section 2, condition 5 in the Financial Regulations for the College’s Student Association dated June 2001 before any grant is awarded by the College Board of Management.

I, (Name) ………………………………………………………………
(Committee position) …………………………………………….,

hereby acknowledge receipt of the Financial Regulations and guidelines which have been approved by the South Lanarkshire College Board of Management. I confirm that I understand the conditions outlined in the Regulations are binding on me as an office bearer of South Lanarkshire College Student Association. I agree to comply fully with these conditions and understand that I am jointly and severally liable along with the remaining office bearers to repay to South Lanarkshire College Board of Management any amount of grant not spent in accordance with the financial regulations. Finally, I confirm that I have been advised to seek independent legal advice before signing this agreement.
Signed ………………………………………….
Date ……………..
Name ……………………………………………….

Witnessed by:
Signature ……………………………………………..
Name …………………………………………..
Date …………….

Witnessed by:
Signature ……………………………………………
Name …………………………………………….
Date …………….