Molehill Green Village Hall

Context 

The Reserves Policy is to support the running of the Molehill Green Village Hall. This Policy sets out clear expectations and an indication of the approach taken to financially secure and manage the financial circumstances of Molehill Green Village Hall. 

Financial Reserves

Income reserves are described by the Charity Commission as the resources the charity has or can make available to spend for any or all the charity’s purposes. Molehill Green Village Hall have a commitment to covered other planned expenditure and manage our reserves to financially secure the building and grounds for the foreseeable future. 

Molehill Green Village Hall have specified two types of reserves:

1.     Unrestricted Reserves

Our Unrestrictive Reserves can be used to support the Charity Objectives or purpose or can be used or held to offset risks to the Charity.  A core reserve will be attributed to the unrestricted reserves to support the fundamental costs and expenditure set within the budget for the village Hall. 

2.     Restricted Reserves*

Our Restrictive Reserves are used for specific or raised or held future or planned purposes.  This is likely to be utilised through Grant Applications or funding requests for specific developments, outcomes, or objectives.

Molehill Green Trustees reserve the right to designated unrestrictive reserves to fund a restrictive reserve project or other planned use. 

*Restricted Reserves are not required for this policy; however, this sets out financial management of funds for the charity. 

Reserve Policy

The Reserve Policy will work alongside the charity commissions and the charity’s account management statutory obligations. A Trustee’s Annual Report will be produced on the charity’s activities for the public benefits. 

Within the ‘Trustee Annual Report’ Molehill Green Village Hall will include the reserve policy principles and set reserve for each financial year.  The Reserve Policy will state the Minimum Reserve Fund.

The trustees will specify the following:

• The level of reserves, amount, and type. 
• Any surplus with rationale for funds being taken forward. 
• Funding specified or allocated to existing projects, outcomes or funds returned. 

Management of Financial Reserves 

The Trustees will oversee and manage all financial assets and risks for Molehill Green Village Hall. The trustees will comply with all Charity Commissions legislative rules and statement of accounting practice.

A Financial plan is set, specified, and agreed by the Trustees on an annual basis. This will be reviewed if events present an exceptional change in financial circumstances. In this case a specific budget meeting will be held to review the Reserve Policy and Financial reserves for the agreed period. 

The trustees will ensure that:

• All monies are attributed to Unrestricted or Restricted Reserves/Funding. 
• Each financial period set out agreed Core Reserves which will fund core annual expenditure for an agreed period. 
• Planned agreed use of unrestrictive funds are specified and meet our core objectives. 
• Restricted funds are managed, reviewed and reported on to meet the criteria specified within the grants or organisations funding restricted monies. 
• Annual Financial Reports are shared with the Charity Commission. 
• Financial Risk is managed at all times as part oversight of the Charity Objectives as well as our risks associated with income streams and charity expenditure. 

Unrestricted Reserves - Core Reserves

Our Core Reserve is used set monies from our Unrestricted Reserve to support core costs of the building and grounds for a fixed period. This budget is reviewed annually and will factor in budgeted annual expenditure and will maintain cover for any negative cash flow emergencies. 

As a minimum the Core Reserve will attribute to:

• 3 years expenditure on existing annual costs and spend. 
• At least 10% of unrestrictive reserves for negative cash flow and emergencies.

In the event any monies are accessed to support a cash flow or emergency efforted are required to immediately place an action plan to restore the balance to the minimum amount. 

Planned ongoing and annual maintenance expenditure will be included in the Annual Budget. This will ensure that the building and grounds maintained or improved for the benefit of all users and meet the conditions defined by our Insurance Policy. 

It is noted that due to the existing circumstances of Molehill Green Village Hall, Core Reserves should not fall below £4000. This is deemed as our Minimum Reserve Level. 

Policy Review 

The Policy will be reviewed on a yearly basis or when legislative changes occur by the Charity Commission.