THE GOLDEN RULE WHEN CONSIDERING FINANCE IS:
INCOME MUST BE GREATER THAN EXPENDITURE.
There is a wide range of resources to support financial procedures available to members on the Mudiad Meithrin intranet. There are also finance guidelines in Mudiad Meithrin's 'Little Purple Book' .
The Charities Commission has guidelines on Managing a Charity's Finances.
If your Cylch Meithrin is experiencing financial difficulties, please contact your local Support Officer as soon as possible.
- A budget for the Cylch must be made annually and reviewed at each committee meeting. Examples can be seen at the bottom of the page.
- When creating the budget, a fee scale must be agreed sufficient to ensure that the Cylch breaks even. Remember that one child's fees is not sufficient to pay the salary of one member of staff.
- You will need to consider the number of children against staffing costs and necessary staff:children ratio. There is a break even spreadsheet available for members on the intranet.
- At the end of each financial year, annual accounts must be drawn up, and an external independent person must be engaged to audit the accounts.
- A copy of the accounts must be sent to Mudiad Meithrin and the Charity Commission (if you are a registered charity).
- Account books are available from Mudiad Meithrin to note income and expenditure (members can contact the head office for a free copy). An Excel spreadsheet is an alternative way to keep accounts electronically.
- The treasurer does not have to do this work, an accountant or other person can be paid to do this work on behalf of the committee. The committee cannot to pay the Treasurer or anyone else who signs cheques on behalf of the Cylch for carrying out the work.
- At least 2 people to sign cheques, these cannot be employed by the committee and these should not be members of the same family.
- It must be ensured that there is a robust system in place to manage finance. An effective way of doing this is to prepare a Business Plan for the Cylch and review it annually. There is a template Business plan available to members on the intranet.
- It is also a good practice for the Cylch to create a fundraising action plan to bolster Cylch funds. There are lots of ideas on our Grants page.
- In order to ensure a constant cash flow, fees should be collected regularly at the beginning of the weekly / monthly / termly period.
- We suggeste that a system of direct debit be established rather than cash receipts.
- Parents must receive an invoice / receipt for their payments.
2. Local Authority Invoices / Childcare / Tax-free Childcare Vouchers
- If the Cylch Meithrin recieves funding for 3 year olds (education), 'Flying Start' (Welsh Government program targetting some of Wales' most deprived areas - 12½ hours free childcare for children 2 - 4 years old) and / or the Childcare Offer (30 hours) you must ensure that invoices are sent to the correct department promptly. Your local Support Officer can advise you on this.
- It is possible for a Cylch Meithrin to register to receive childcare vouchers. Parents can pay for their children's place in the Cylch using the vouchers. For more information discuss with your local Support Officer.
- Tax-free Childcare: A Welsh Government scheme to help parents pay for childcare - click here. In order to qualify, the Cylch must register with HMRC using their unique tax reference number. See below for a guide to registering.
- Everything should be done to avoid a situation where the Cylch Meithrin has debts.
- Fees should be collected in advance - at the beginning of a week, month or term. This should be clear in the parent agreement with the Cylch Meithrin.
- If there is a situation where money is owed to the Cylch this should be addressed as soon as possible. Examples of possible letters which the Cylch can send to debtors are available on the Mudiad Meithrin intranet .