ACP 10 ADMINISTRATION OF AIR TRAINING CORPS PUBLIC & NON-PUBLIC FUNDS

ACP 10 ADMINISTRATION OF AIR TRAINING CORPS PUBLIC & NON-PUBLIC FUNDS

PREFACE 1. The formation of a Squadron Civilian Committee is authorised in AP 1919, and their responsibilities are detailed in Air Cadet Publication 11 (ACP 11). One of their major responsibilities is the overseeing of a Squadron s Non-Public financial matters. This publication is, therefore, produced for Civilian Committee Members both for their protection and that of the Squadron s Funds, however, this guidance should be read in conjunction with Charity Commission regulations. 2. This publication should be also read in conjunction with: - AP 1919 - Regulations for the ATC - ACP 300 - ACO Finance Manual - ACP 11 - Administration of Civilian Committees in the ATC 3. Like all guides, the information contained herein is not exhaustive. It will not cover every eventuality and any queries that cannot be answered locally should be referred to: The Air Cadets Finance Officer HQ AC RAF Cranwell Sleaford Lincolnshire NG34 8HB Tel: 01400 267632 E-mail: acfo@atc.raf.mod.uk 4. This guidance does not discriminate on grounds of race, ethnic origin, religion, sexual orientation or social background. Neither does it discriminate on grounds of gender, disability or age, insofar as the legislation applies to the Armed Forces. i

DISTRIBUTION LIST All ACRHQs - Rgnl Comdt - Rgnl Committee Chairperson - Rgnl Honorary Treasurer All Wg HQs - Wg Ex O - Wg Committee Chairperson - Wg Honorary Treasurer All Sqn HQs - Sqn Committee Chairperson - Sqn Honorary Treasurer HQ AC - Comdt AC HQ AC - COS AC HQ AC - Wg Cdr Admin HQ AC - Wg Cdr TG HQ AC - PSO HQ AC - Org 1 HQ AC - Org 2 HQ AC OC ATF HQ AC - ACFO HQ AC - Accounts Officer Information: HQ Air Corporate Governance A+A 2 ii

ADMINISTRATION OF AIR TRAINING CORPS PUBLIC AND NON-PUBLIC FUNDS CHAPTER CONTENTS 1 - Squadron Civilian Committees 2 - Administration of Non-Public (Welfare) Funds 3 - Other Funds and Internal Financial Controls for Non-Public (Welfare) Funds 4 - Audits, Checks and Charity Regulations for Non-Public (Welfare) Funds 5 - Information on the Administration of Public Funds 6 - References and Summary of Essential Financial Controls iii

INTRODUCTION CHAPTER 1 SQUADRON CIVILIAN COMMITTEES 1. AP 1919 authorises the formation of squadron civilian committees (also known as simply squadron or civilian committees) and their composition; terms of reference and detailed responsibilities are contained in Air Cadet Publication 11 (ACP 11) Administration of Civilian Committees in the Air Training Corps. A specific responsibility is for the receipt, custody and disbursement of all Public and Non- Public Funds (Welfare Funds), the administration of which is vested in the Civilian Committee of the Squadron or, in the case of a school Squadron, the head teacher. The control or administration of any public funds cannot be delegated to a squadron commander or any other person who is not a member of the local Committee. 2. This publication provides guidance to squadron committees, and particularly to honorary treasurers, as to the type and scope of assistance provided in relation to the expenditure of Public and Non Public Funds by Squadrons of the Air Training Corps. Chapter 2 provides guidance on the administration of non-public funds and Chapter 5 on public funds. APPOINTMENT OF HONORARY TREASURERS 3. The Committee is to elect one of its members as Treasurer. In the case of Squadrons this must not be either the Commanding Officer or any adult member of staff. Apart from the Commanding Officer who is an ex-officio member, uniformed and civilian members of staff cannot also be committee members and, therefore, cannot be elected Treasurer. In the case of Wings this must not be the Commanding Officer but, in exceptional circumstances, may be the Wg Ex O. Treasurers are elected on an annual basis. Draft terms of Reference (which are to be adapted where necessary to meet local requirements) for issue to honorary treasurers (including regional treasurers) are at Annex A. Signed Terms of Reference are to be held at regions or wings as applicable. 4. On resignation, treasurers are to hand all accounting records to the new treasurer who will ensure the accounts are correct (documents are to be retained for 7 years). The account is to be reconciled up to date and the incoming Treasurer is to sign and date the cash book as acceptance of the account. In the absence of an incoming Treasurer, it is the Chairperson s responsibility to ensure that the accounts are correct, before being passed to the new Treasurer. 5. All changes of Squadron and Wing Honorary Treasurers and bank account details are to be notified in writing (by secure means) to the Personnel Section, HQ AC through Wing HQ as and when they occur. 6. When a squadron is placed in suspense, all outstanding liabilities are to be settled immediately and any amount due to public funds from welfare funds collected. The balance of public funds and all relevant vouchers are to be remitted to HQ AC, Accounts. All cheques are to be made payable to the Public Sub - Account HMG 3615. The disposal of welfare funds and property is to be effected in accordance with instructions issued by Wing HQ. 1-1

BANKING AND CUSTODY PROCEDURES 7. The Committee is to ensure that funds are at all times safeguarded against loss or misappropriation. The following guidelines will, if implemented, provide a basic protection for funds: a. Cash Payments (in particular through the post) are to be discouraged. b. Receipts are to be banked as soon as practicable and at least weekly. c. Where cash or cheques cannot be banked on the day of receipt, they are either to be placed in a safe, or locked in a cash box (within the Committee s agreed cash holding limit). Money handling insurance should be considered if the amount of cash is significant. This cover can be purchased to include transit to and from the bank and whilst cash is lodged at different temporary locations e.g. Squadron premises, Treasurer s home address or whilst on ATC camps etc. Where cash is covered by insurance, attention is to be paid to any conditions laid down in the insurance schedule. d. Access to cash is to be restricted to the Treasurer or nominated person (who holds a cash handling certificate) and only the Treasurer or a nominated officer is to hold keys. e. It is important that charity money must be kept separately from an individual s personal money. FINANCIAL DELEGATIONS 8. Treasurers are to issue Cash Handling Instructions (an example of which is at Annex B), adapted to meet local specific requirements, to all members who are authorised to handle cash or cheques. 9. In addition to delegating financial responsibility for receiving income, financial responsibility may also, where considered appropriate, be delegated by the Committee in respect of expenditure - for example, the payment of approved expenses from the fund for specific items, or the allocation, by the Committee, of a specified sum of money paid in trust to a nominated person, for the benefit of cadets as directed and to be accounted for retrospectively. 10. All financial delegations are to be made formally in writing by the Honorary Treasurers and may not be transferred. A new delegation document will be required when either party changes AP 1919 refers. INCOME CONTROLS 11. The Committee has a duty to safeguard all incoming Funds and the security of incoming post is to be ensured and opened and processed with the minimum of delay. 12. A Cash Handling Instruction is to be issued to all Committee members (including the Treasurer) who are authorised to handle cash and/or cheques. 1-2

13. All income received is to be kept in a secure location (preferably in a cash box or safe) with restricted access until lodged in the Fund bank account. Funds held in cash are to be kept to the essential minimum and within the agreed maximum limit set by the Committee, and kept in a secure location with restricted access. 14. To ensure that income records are being accurately maintained, random checks as detailed in Chapter 4 are to be carried out. EXPENDITURE CONTROLS 15. The Committee is responsible for the correctness of purpose of all payments from funds. A guide to appropriate expenditure from Welfare Funds is at Annex C. 16. The following rules are to be followed when making payments: a. All payments made from a fund are to be authorised by the Committee and recorded in the meeting minutes or financial plan (Squadron Commanders and Treasurers, within the terms of their standing authorisation), and are to be supported by original and valid documentation (e.g. itemised receipts, invoices, share certificates etc). b. Access to all instruments of payment (cash, cheque books, building society passbooks and bank mandate forms) is to be restricted to the Treasurer and/or other nominated persons. c. Cheques are to be made out by treasurers or in their absence by an authorised stand-in with written financial delegation. PURCHASE CONTROLS 17. The following controls should be put in place and operated so that the Committee can satisfy itself that purchases have been properly authorised: a. A record is to be kept of all orders placed, showing details of date, quantity, description, authorisation, price etc. Any property purchased must be recorded in a property book or register giving full details including date purchased, item, cost, where it is kept and who is the nominated responsible caretaker of the item. b. Invoices are to be checked mathematically and against the order details. It is further recommended that the order record be marked to show that the invoice has been received. c. The Treasurer is to be aware of the authorisation limits of specific individuals and ensure they are not exceeded. d. To avoid duplication, the payment method, date and amount is to be written on the invoice, and payments are only to be made against original invoices. 1-3

PAYMENT BY CHEQUE 18. Cheques are generally accepted as being a safe method of payment, providing good practice is observed: a. The bank mandate details some of the rules governing the validation of an instruction to pay. Ideally it should require each cheque to be signed by a minimum of two signatures which are to be those of the Treasurer plus any other nominated member of the Committee, however, the members must not be a relative or closely connected. b. The bank mandate is to name a pool of 3 or 4 authorised signatories; this can help avoid problems arising at times of individual absence. c. In line with current Civil Service practice, staff in the grade of Administrative Officer (E1 or equivalent) or below should not be cheque signatories unless exceptional circumstances prevail, such as illness. d. Nominated signatories cannot sign cheques made payable to themselves. e. No cheques are to be signed without a corresponding invoice or other documentary evidence as to the nature of the payment. f. Under no circumstances are Blank cheques to be signed and issued. g. All cheque expenditure is to be recorded in the cashbook and crossreferenced with the cheque number, nature of payment (e.g. vehicle expenses etc) and payee. h. All cheque stubs are to be completed at the time of payment and retained (including stubs from cancelled cheques), as they form part of the charity s accounting records and audit trail. DISCREPANCIES WITHIN THE FUND 19. Committees are responsible for ensuring that the fund is correctly audited; Chapter 4 refers. Any accounting discrepancies are to be resolved immediately and if the Committee suspects impropriety or fraud, advice is to be sought from the relevant Wing/Region HQ in the first instance. However, recognising that Treasurers accounting experience will vary, care must be taken not to make an automatic assumption of impropriety or fraud if there is an accounting discrepancy. While it is not possible to provide guidance as to all possible circumstances, common sense should be applied and an explanation sought in the first instance from the Treasurer unless there is reasonable suspicion of fraud or impropriety. In borderline cases, or where the explanation given is not satisfactory, the matter should be reported without further comment to the Treasurer to Wing/Region HQ. In summary, if in doubt, report. 1-4

ELECTRONIC RECORDS OF ACCOUNT 20. A Committee may give permission for an Honorary Treasurer to use a computer to keep cash and banking records rather than using a manual cash book etc. The Committee must satisfy themselves that the methods used show adequately the income and expenditure and full reconciliations. This can be achieved by a simple spreadsheet. Committees must ensure they regularly have sight of the records and are content with the figures presented. It would be best practice to attach a copy of the current accounts to accompany the minutes of meetings held, so the Committee had constant visibility. It would be prudent to present a hard copy to the Committee for signature on a regular basis. Committees must give thought to back-ups of the data and archive responsibilities. They must ensure that the back-ups are kept in a different location to the Treasurers computer. Consideration should also be given to the possibility of a future Treasurer not having access to the necessary IT equipment to continue in this manner. ELECTRONIC BANKING (INTERNET BANKING) 21. Internet banking is increasingly popular and Committees may decide to utilise this approach. Both computer and telephone banking involve the use of passwords that give access to the charity s accounts. Most banks require a form of indemnity before they agree to provide an electronic banking service. The indemnity will have the effect of relieving the bank from responsibilities to which it would have been subject had the account been conventionally operated. Therefore, more traditional methods of banking currently remain the preferred choice of the department. If internet banking is used Committees are to ensure the relevant operating system is secure and protected (e.g. fitted with an appropriate virus scanner, fire wall and antispyware application). Committees are to further consider the possibility that future treasurers may not have access to the necessary IT equipment. CHARITY COMMISSION GUIDANCE 22. This ACP gives general financial guidance but Committee members should make themselves aware of Charity Commission comprehensive range of publications. For example CC8 Internal Financial Controls for Charities. Annexes: A. Example of Terms of Reference for Honorary/Regional Treasurer. B. Example of Cash Handling Instructions. C. A Guide to Appropriate Expenditure from Welfare Funds. 1-5

Annex A Chapter 1 EXAMPLE OF TERMS OF REFERENCE FOR HONORARY/REGIONAL TREASURER 1. You are appointed Honorary Treasurer to the Name of Region/Wing/Squadron Committee Air Training Corps with effect from... 2. In exercising your responsibility, you are to note that monies held in the Name of Fund, Charity Exception Order Number... /Tax exemption Number.../Scottish Charity Number... are held in trust by all members of the committee. These Terms of Reference are intended to ensure that the administration of non-public (welfare) funds provide the necessary safeguards to ensure that the Region/Wing/Sqn meets its obligations to the Air Training Corps (and the Charity Commission - England & Wales only). 3. You are directly responsible to the committee for: a. Maintaining income and expenditure accounts and ensuring that all entries in the account books are in ink and cross-referenced to receipts. b. Issuing cash handling responsibility instructions to staff at Sqn/Region/Wing Headquarters who are authorised to receive cash on behalf of the Name of Fund. c. Ensuring that any cash/cheques are banked as soon as possible and the cash holding limit (as agreed by the Committee) is not exceeded. d. Ensuring that any cash boxes or safes are appropriately secured and duplicate keys are lodged with a nominated member of the Committee or the bank. e. Ensuring that the cash book is balanced at the end of each month. Cash and bank balances are to be reconciled. A reconciliation statement is to be entered into the Cash Book and signed by yourself. The bank reconciliation should be checked by the Sqn/Wing/Region Chairperson (or another nominated member of the Committee) who should countersign the reconciliation statement. All documents must be made available to the countersigning officer and for any spot checks by the Committee. f. Investigating any discrepancies in accounting and, if unresolved reporting the matter to the Sqn/Wing/Region Chairperson. g. Ensuring that invoices for goods and services are paid without delay. h. At the end of each financial year (31 March) preparing the Summary of Receipts and Payments Accounts Form 60/61 for submission to the Chairperson by Date and presentation to the Committee by Date. 1-A-1

i. Wings must ensure that camp levy payments received for Annual Camps are paid into the Public Account in accordance with the instructions issued by TG2, HQ AC. This may be to the Accounts Office at the hosting station, or by cheque made to HMG Public Sub-Account 3615 and forwarded to the Accounts Officer, HQ AC. The levy for overseas camps will be included in the total cost advised by TG2, HQ AC. A separate ledger must be maintained. (This paragraph applies to Wing Treasurers only). 1-A-2

Annex B Chapter 1 EXAMPLE OF CASH HANDLING INSTRUCTIONS 1. The following instructions are to be carried out when cash or cheques are received at Region/Wing/Squadron Headquarters for credit to the Name of Welfare Fund. Notes: a. Only the following staff are authorised to receive cash or cheques. members to be specified by name. b. A numbered receipt is to be issued and the total amount of cash/cheques received, together with the purpose for which the payment has been made, is to be entered onto the receipt. c. Any underpayment or overpayment is to be adjusted on a separate receipt/payment voucher. d. Only one receipt book is to be used at any one given time (unless the current receipt book is being examined by the auditor). e. In the event of the receipt being cancelled, the original receipt is to be crossed through and the receipt is to be left in the receipt book. If the receipt has been attached, it is to be stapled to the duplicate and retained in the receipt book. f. The cash is to be secured in a locked cash box in a secure location (within the limit set by the Committee) and handed to the treasurer at the earliest opportunity. It should not be left in Squadron premises. 1. This instruction should be sent to a named individual and signed by the treasurer. 2. This instruction could be more specific in respect of actually restricting the type of income that is permissible to handle. For example, in the case of a Squadron CO it could relate to the collection of cadet subscriptions, the collection of sums of monies raised by special activities of the squadron or the control of income from the canteen. 3. Ideally all incoming cheques and cash should be recorded immediately and entries verified by someone other than the person who has made the entry. This is particularly important for cash. It is appreciated that this is not always possible and therefore a receipt book has to be maintained. 1-B-1

Annex C Chapter 1 A GUIDE TO APPROPRIATE EXPENDITURE FROM WELFARE FUNDS 1. The following list is a brief guide to items which are/are not admissible expenditure from welfare funds. This is not an exhaustive list and further guidance, as required, should be sought from the Wing HQ or HQ AC, Accounts Officer. Admissible Expenditure Adventure Training Equipment Computer Equipment incl consumables Electricity (contribution to relevant RFCA or HQ Air Cadets) for non-entitled use Insurance (fire/vehicle) Postage/Telephone (including rental) in connection with welfare or fund-raising Incorrect Expenditure Personal Insurance for Adult Staff Gifts/Flowers/Donations to individuals or charities (a separate collection should be made from staff and cadets) Major Repairs/Improvements to accommodation Loans which do not benefit cadets (Chapter 3, paragraph 16 refers) Recruiting (local publicity and recruiting expenses) Repairs to Sqn Purchased Equipment Sports and Competitions Travel/Petrol costs Bank Charges (to be avoided where possible). Duke of Edinburgh s Award (in exceptional circumstances only) 1-C-1

CHAPTER 2 ADMINISTRATION OF NON-PUBLIC (WELFARE) FUNDS INTRODUCTION 1. The majority of wing and squadron Welfare Funds in England and Wales are registered with the Charity Commission as Excepted Charities and as such must be administered in accordance with Charity laws under the Charities Act 2006. The Charity Commission except the charity from the duty to be registered for Non-public Sports and Welfare Funds of the wings/squadrons of the Air Training Corps in accordance with the regulations made under the Royal Warrant dated 5 Feb 1941 (subsequently revised and amended latest 19 Feb 1990) for the government of the Corps. 2. The constitution and governing document for the Corps is recorded in the AP 1919 ATC Regulations. TRUSTEE RESPONSIBILITIES 3. The Trustees of the Fund are the people responsible for controlling the management and administration of the Charity. In the eyes of the Charity Commission the Civilian Committee, regardless of what they title themselves are Trustees. 4. Civilian Committee Trustees must ensure they are aware of their responsibilities to the charity. They must ensure compliance with Charity Law, duty of prudence (ensuring the charity stays solvent) and exercise duty of care (ensuring the charity is well run). Detailed guidance can be found in the Charity Commission publication CC3 The Essential Trustee: What you need to know at www.charitycommission.gov.uk 5. Excepted Charities are required to produce annual accounts (Accounts Form 60 for squadrons and Accounts Form 61 for wings, chapter 4 refers); they do not have to be submitted to the Charity Commission, unless the Charity Commission (who can call for a set of accounts at any time) requests them. 6. Excepted Charities with an annual income of over 100K are required to register with the Charity Commission in their own right. This threshold may be lowered as a consequence of a review of the Charities Act 2006 due to take place in 2011/12. 7. The Charity Commission issue an excepted order certificate for each recorded charity at the time of recording, one copy is to be held by the wing/squadron and one held at HQ AC. The list of excepted numbers is published in the ACP 8 (List of ATC Units) against each wing or squadron number. New squadrons should apply for excepted status through the HQ AC, Accounts Officer. 8. The Trustees of Excepted Charities do not have to produce an Annual Trustees Report but it is good practice to do so. An example of a report is at Chapter 4, Annex C. 2-1

PUBLIC BENEFIT STATEMENT 9. All charities must demonstrate that they are of tangible benefit to their community and can be legitimately described as a charity. HQAC has agreed a generic Public Benefit Statement for wing/squadron use as necessary with the Charity Commissioners. The following statement has been approved by the Charity Commissioners but wing/squadron committees may create one of their own if they see fit: This Fund derives public benefit as it ensures that the Air Training Corps continues to flourish and to remain true to the ideals laid down in its charters, particularly the provision of challenging activities to enable it to attract and retain membership and thereby provide example and leadership for the country s youth. Welfare Funds are a necessary requirement to support the modern, dynamic, sustainable air minded youth organisation that offers fun and challenging opportunities for all. As a result the Fund derives public benefit as it assists in providing opportunities for today s youth to develop personal qualities and a sense of community and citizenship valued by employers, both military and civil creating a positive contribution to adulthood and for the good of the nation. 10. Wing Committees can decide to appoint an Executive Committee, in which case its members rather than the full Wing Committee will be the trustees. Executive Committee members are to be made fully aware of their responsibilities under the Charities Act. 11. The guidance provided in this Chapter applies equally to the management of Regional Funds. Funds held at regional level in England and Wales are Registered Charities and the Trustees are specified in the governing document. All stipulations in the Deed of Trust must be adhered to and will always override any guidance contained within this document. Regional Commandant Scotland & Northern Ireland will issue local accounting instructions for his/her wings and squadrons. OBJECTS OF THE CHARITY 12. The objects set out what a charity is set up to do it aims. They should therefore be described clearly in the governing document. A charity may have more than one object. It is important to remember that all of the objects must be charitable for the public benefit, because if any aspect of them is not, the organisation cannot be accepted as a charity because it will not be exclusively charitable; the objects should reflect what the organisation intends to do; and the objects should be understandable. 13. In the case of wing/squadron sports and welfare funds the objects are the same as the aims of the Corps which are: To promote and encourage amongst young people a practical interest in aviation and the RAF To provide training that will be useful in both Service and Civilian life. To foster the spirit of adventure and develop the qualities leadership and good citizenship. 2-2

SQUADRON NON-PUBLIC (WELFARE) FUNDS 14. The purpose of the Squadron s Welfare Fund is the provision of sports and welfare amenities. The Committee is responsible for the administration of the Fund, and of grants, donations and subscriptions (including those from cadets) to the Fund. The Committee is also responsible for the provision of the unit s proportion of the cost of welfare and sport at regional, wing and corps level. 15. Squadron non-public (welfare) funds are to be checked and audited as required by Chapter 4. 16. Expenditure under the following headings is considered an appropriate charge to Wing/Squadron Welfare Funds: a. Additional Accommodation. All charges resulting from the use of unauthorised accommodation, ie accommodation not maintained by Public Funds/RFCAs; Chapter 5, para 6 refers. b. Additional Furnishings. Approved accommodation is furnished to scale from Public Funds. All additional furniture or furnishings must be paid for from Squadron Welfare Funds Chapter 5, Para 6 refers. c. Insurance. The Committee is strongly advised to take out insurance to cover the following (ACP 300, FI 306 refers): (1) Loss of or damage to items purchased from Squadron Welfare Funds. (2) Employers liability insurance for any persons who are employed using Squadron Welfare Funds (such as canteen staff/cleaners). (3) The regulations also require that when ATC premises are used for welfare or social activities, an insurance policy be taken out by the user to cover all public liability claims and loss or damage arising as a result of fire. Note: You are strongly advised to refer to ACP 300, FI 306 or the correct annual ATC Insurance Notes, to check on those items for which cover is/is not provided since certain activities are not insured and some are only covered subject to special conditions. d. Flight Simulation Training Equipment. The installation, repair, maintenance and running costs. e. Band Instruments. The provision, maintenance and replacement of instruments and accoutrements (including insurance). f. Duke of Edinburgh s Award Scheme. The scheme does not attract support from public funds apart from approved adventure training activities. All other expenses incurred are normally the responsibility of the individual participant; however, the ATC General Purposes Fund may fund a proportion of the joining fees. 2-3

g. Sports, Games and Competitions, including Shooting Competitions. All expenses under this heading including travel costs, affiliation and other fees and special insurance policies for aero-model flying and other activities where an additional premium is required except when participating in Regional, Wing or Corps events when some charges are met from the appropriate Regional, Wing or Corps Welfare Fund. h. Welfare. The provision of tables, chairs, indoor games, canteen and club equipment for social and recreational purposes, and payments made to canteen helpers and cleaners. NB: where canteen helpers/cleaners are employed using Squadron Welfare Funds, the Squadron must take out appropriate employers liability insurance. i. Publicity and Recruiting. Local publicity and recruiting expenses. (National recruiting campaigns are organised by HQ AC and are administered and paid for by the MOD). j. Squadron and Wing Owned Vehicles (SOVs and WOVs). The purchase, maintenance and running costs (including Road Tax, MOT, Insurance and Servicing) of SOVs and WOVs. 17. Cleaning. The cleaning of ATC accommodation is the responsibility of the Squadron Commander, who is to ensure the premises are maintained in a clean and tidy condition. CHANGE OF STATUS FROM EXCEPTED TO REGISTERED CHARITY 18. Wings/squadrons in England and Wales may register with the charity commission at any time their income exceeds 5K in any financial year, however, if they currently have excepted charity status they must register if their income exceeds 100K (this threshold is expected to reduce when the Charities Act is next reviewed in 2011/12). To aid the transition the Charity Commission strongly recommends that registration is completed on-line. The committee will need to consider the following details before registration: charity name; objects (including details of beneficiaries); powers; charity trustees (including how they are appointed); meetings and proceedings of charity trustees; membership (not relevant for trusts); accounts; bank accounts; trustees not to have a personal interest; holding of land and investments; power of investment; power of amendment; and power of dissolution 19. When the on-line application has been submitted the Charity Commission computer system generates a Trustee declaration form this is preprinted with the 2-4

reference number and names of all the trustees. The trustee declaration needs to be signed by all the trustees and the original signature copy should be sent by post before the registration can proceed. If they want to do so, the trustees can sign the paper declaration before the on-line application is submitted, provided that they keep it and return it stapled to the system generated one. This is because the form the system generates provides key information to enable the Charity Commission to link the paper form with the on-line application. Further information can be found at the Registering a Charity pages of the Charity Commission website www.charitycommission.gov.uk 20. The Charity Commission of England and Wales can be contacted in the following ways: Charity Commission Direct PO Box 1227 Liverpool L69 3UG Telephone: 0845 300 0218 0845 300 0197 (On-line services advice) Typetalk: 0845 300 0219 Email: enquiries@charitycommission.gsi.gov.uk Web: charitycommission.gov.uk 2-5

CHAPTER 3 OTHER FUNDS AND INTERNAL FINANCIAL CONTROLS FOR NON- PUBLIC (WELFARE) FUNDS INVESTMENTS 1. Where Welfare Funds hold investments (i.e. stocks, shares, land and buildings), the following safeguards are to be implemented: a. The Committee is to ensure that all Certificates, Deeds and other legal documents are held in a secure place and that full records including details of sales and purchases are kept by the Treasurer. b. The Committee is responsible for the formulation of an investment policy. c. To ensure that their policy is being implemented, the Committee should be presented with appropriate reports, at least half-yearly, to allow them to review the performance of their investment portfolio. d. In normal circumstances the Committee is to take professional advice before selecting or disposing of investments. The Committee is to agree all purchase and sales in advance. e. Controls are to be implemented by the Committee to ensure that all dividends or interest payments due are properly received and accounted for. f. High risk/high interest investments should not be used for charitable funds. Investments should be diversified so as to ensure that the failure of one investment does not have a major impact on the overall funding of the charity. BANK OR BUILDING SOCIETY DEPOSITS 2. The following guidelines are to be observed in the case of deposit accounts: a. A record (other than the pass books) of all bank and building society deposits is to be kept in a safe place. b. A nominated member of the Committee, other than the Treasurer, is to carry out regular bank reconciliation checks and inspect statements. c. The opening or closing of any deposit account, held on behalf of the unit, is to be authorised by the Committee in advance of any action being taken. d. Accounts are not to be allowed to remain dormant. If an account is no longer used for whatever reason, then the monies are to be transferred to the 3-1

main account and the dormant account closed (the Committee should approve this decision). 3. Assets are always to be held in the name of the squadron/wing/region. Where assets are attributed to a named individual (e.g. to a squadron treasurer when a building society changes its mutual status to that of a limited company) steps are to be taken to ensure (by transfer or sale) that the asset is clearly identifiable as that of the squadron/wing/region. LOTTERY FUNDING 4. Funding from the National Lottery can enable cadets to take part in heritage and community activities as well as projects to promote education. If applying for a lottery grant the website is a good place to start and a good source for contacts. The website address is: www.lotterygoodcauses.org.uk The Committee is responsible for fund raising and therefore are to be the instigators of the bid, in consultation with the Squadron Commander. Squadrons are not permitted to apply for lottery funding to meet public commitments. This includes the provision of accommodation in accordance with Chapter 5. GIFT AID 5. From 6 April 2000, under the Government Revised Gift Aid Scheme, charities can reclaim the basic rate of tax already paid on all donations made by individuals. If Committees are interested in this scheme and feel it would be of benefit to their Squadron a Gift Aid Information pack can be obtained from: HM Revenue and Customs Charities St John s House Merton Road Bootle Merseyside L69 9BB Telephone: 0845 3020203 (8.30 am to 6 pm) Website: www.hmrc.gov.uk E-mail: Charities@inlandrevenue.gov.uk (for advice) FUND RAISING 6. The Committee has a responsibility to ensure that it is in control of funds raised on its behalf and that all money to which the Fund is entitled is received. 7. The following controls are to be put in place: 3-2

a. Records are to be maintained for each fund raising event, in sufficient detail to identify gross receipts and how they have arisen, and all the costs incurred. b. For all events for which there is ticket or gate income the following guidelines are to be observed: (1) All tickets should be pre-numbered. (2) A record should be kept of all persons who have been issued with tickets to sell, and the numbers of those tickets. (3) A record is to be kept of which tickets have been sold. (4) Receipts and returned tickets are to be reconciled against tickets issued. c. Cadets are to be supervised when handling money at events such as jumble sales and tombolas. Insurance cover is to be considered and details can be found in ACP 300, FI 306. 8. Where cadets attend or where they may benefit from Social Functions e.g. Region/ Wing/Squadron Dinners, details are to be included and shown on the Summary of Receipts and Payments. It is not necessary to have a separate ledger, though a separate entry will be required. 9. Where a Squadron Committee forms a sub-committee, e.g. a Parents Committee to raise funds for example a minibus, and also opens a separate account it is advisable that the Committee Treasurer be a member of the sub-committee to ensure that the financial records, when entered into the annual return comply with any requirements called for by the Charity Commission or the HM Revenue and Customs in respect of any rebate. These actions are necessary if the Charity Registration or Exception Numbers are to be used. PUBLIC COLLECTIONS 10. Cadets in uniform are permitted to collect only for military charities but primarily RAF charities including RAF Association Wings Week, ATC Welfare Funds, the Royal British Legion Poppy Appeal and RAF Benevolent. Public collections in aid of such charities or funds may be made only in the following circumstances: a. At theatres, cinemas, or other places of public entertainment, where, (1) The performance is given in aid of ATC funds, or (2) Box office receipts or a proportion of them have been set aside for funds, or (3) Permission has been given for a collection to be made either during or at the end of the performance. 3-3

b. At dances, concerts or other functions which have been arranged by ATC Squadrons to aid funds. c. At supermarkets, with prior permission of the manager. 11. Cadets and/or adults are forbidden to make street or house-to-house collections to raise money for ATC welfare funds. 12. Street collections by cadets in uniform are permitted only for military charities including RAFA Wings Week or the Royal British Legion Poppy Appeal at Remembrance time. Squadron commanders are to ensure that the local Police have been informed and their recommendations observed and that approval has been received from the appropriate local authority and any exemption certificate which might be required on age grounds has been obtained by the organisers. House to house collections are forbidden. DONATIONS 13. The intended use of all donations are to be made clear, and recorded at the time of collection. 14. General donations are to be used in accordance with the aims and objectives of the fund. 15. All donations are to be used for the purpose they were given (i.e. restricted), and if they cannot, approval must be sought from the Donor to use it for alternative purposes. LOANS 16. When considering loan applications, Committees must always act reasonably and prudently and keep in mind the interests of the charity, ensuring that its assets are safeguarded. Loans must only be granted for purposes which benefit cadets. Committees are to ensure that the Fund can afford the loan and satisfy themselves that the borrower is able to meet its repayments. There is to be a written loan agreement between the lender and the borrower, detailing the terms and conditions of the loan. The loan agreement is to be signed by the Treasurer and another Committee Member of both the donor and the receiving unit, and must include details of: a. The lender. b. The borrower. c. The purpose of the loan. d. The amount of the loan. e. The repayment period. f. The repayment amount and dates when payments are due. g. Rate of interest if applicable. 3-4

CHAPTER 4 AUDITS, CHECKS AND CHARITY REGULATIONS FOR NON-PUBLIC (WELFARE) FUNDS BANK RECONCILIATION 1. At the end of each month the Treasurer is to carry out a cash and bank reconciliation, to ensure that the cashbook is balanced and agrees with the bank statements and cash held. Where there are very few transactions (fewer than 10 transactions per month) conducted through the bank account, a 3 - monthly reconciliation will suffice. 2. The bank reconciliation statement is to be signed by the Treasurer and checked and countersigned by the Chairperson, or other nominated Committee member. All relevant documentation is to be made available. 3. The signed statement should then be entered or stapled into the Cash Book. RANDOM SPOT CHECKS 4. The Committee is to make regular checks to ensure that records are being accurately maintained. The Committee is to nominate a member (not the Treasurer or any person who has cash handling responsibilities) to carry out the following random spot checks at least every 6 months. a. Records of cash and cheques received are to be checked to ensure that they agree with bank paying-in slips. b. The paying-in slips are to be checked against the bank statements to ensure that the amount banked and the date credited is correct. c. Transfers and direct payments into the bank are to be checked to ensure that they agree with the paperwork. d. Recorded payments are to be checked and agreed with cheque stubs, paid invoices or other authorisations. e. Cheques paid by the bank or building society are to agree with the fund s records. f. Check that standing orders and direct debit payments are current and agree with instructions given to the bank or building society. g. Make sure that purchases have been properly authorised and that invoices agree with the details on the order records. h. If applicable, check any investments (i.e. stocks and shares). i. If applicable, check the property book. 4-1

5. Squadron Accounts, in addition to internal checks, are to be inspected by the Wing as part of their Annual Inspection and recorded on the inspection report. Also Wing Accounts are to be checked and recorded on the inspection report by the Region, as part of the annual Wing Inspection. The following checks are to be carried out: a. The cashbook and bank statements are to be checked, ensuring that a regular bank and cash reconciliation is carried out. b. Make sure that regular random checks have been carried out. c. Check that funds have been expended legitimately and that any monies due to public funds have been paid in accordance with current instructions. d. Compare a random sample of cheque stubs with the payment documents and bank statement. e. Compare the minute book against the cashbook to ensure all financial actions have been achieved. f. Check the property book. ANNUAL ACCOUNTS (AS AT 31 MAR) 6. The Committee is required under charity law to ensure that proper books and records are kept and an annual summary of receipts and payments is prepared and independently examined. 7. HQ AC, Accounts issue instructions in February of each year, for Wings and Squadrons in England and Wales, detailing how the annual accounts are to be produced and independently examined. The independent examiner must be totally independent of the Committee and must not be a relative or be closely connected to a member of the Committee or a major donor or beneficiary of the charity. The Regional Commandant for Scotland & Northern Ireland will issue local instructions and guidance for Wings and Squadrons within that Region. 8. An independent examiner need not be a qualified accountant, but is to be both competent for the task and familiar with either book keeping or accountancy practices. 9. The Committee is to ensure that the independent examiner has a basic understanding of the organisation and is aware of the purpose of the Fund, and the uses to which the monies can be put. 10. Guidelines to assist the independent examiner are detailed at Annex A. 11. The Committee is to formally approve the annual accounts within 6 months of the end of the Financial Year. 4-2

12. All members of the Committee are to be provided with a copy of the accounts every year. If this proves too expensive for larger Committees, the Chairperson is to circulate a copy of the accounts and each member of the Committee is to sign a circulation proforma. New Committee members are to be given a copy of the latest accounts on appointment. 13. A copy of the Squadron Accounts is to be forwarded to the appropriate Wing HQ in accordance with the instructions issued annually in February by HQ AC, using Accounts Form 60 Summary of Receipts and Payments - Squadron Accounts (which can be found in the forms library) along with the notes at Annex B or as issued by the Regional Commandant for Scotland & Northern Ireland. 14. A copy of the Wing Accounts is to be forwarded to the appropriate Regional HQ in accordance with the instructions issued annually in February by HQ AC, using Accounts Form 61 Summary of Receipts and Payments - Wing Accounts (which can be found in the forms library) along with the notes at Annex B or as issued by the Regional Commandant for Scotland & Northern Ireland. 15. Excepted Charities are not required to send a copy of their annual accounts to the Charity Commission. However, the Charity Commission can call for a set of accounts at any time so it is imperative the paperwork is completed promptly. ANNUAL REPORT 16. Excepted Charities need only prepare an annual report if requested to do so by the Charity Commission. Such requests will be made only in exceptional circumstances. It is, however, good practice for charities of all sizes to prepare at least a simple annual report (Trustees Report) of their activities, achievements, performance and include a simple financial review. This report is then agreed by the committee. A suggested outline for an annual report is shown at Annex C. The Charity Commission Trustees Annual Report template can be found on the website www.charitycommission.gov.uk CHARITIES IN SCOTLAND 17. In Scotland the Charities and Trustee Investment (Scotland) Act 2005 introduced a new regulatory body called the Office of the Scottish Charity Regulator (OSCR) with an independent role that came into force in April 2006. All existing Scottish charities (i.e. those who have been issued with a Scottish charity number by HM Revenue and Customs) will automatically be entered onto the register by OSCR. OSCR will then be responsible for assessing applications from new bodies wishing to become charities and for operating the new system. Regional Commandant Scotland & Northern Ireland will issue local accounting instructions for his/her Wings and Squadrons. CHARITIES IN NORTHERN IRELAND 18. In Northern Ireland an annual summary of receipts and payments should be prepared as for Excepted Charities in England and Wales. Section 27 of the Charities Act (Northern Ireland) 1964 requires the trustees of a charity to keep proper accounts and to preserve them for at least 7 years. There is no requirement 4-3

for accounts to be filed with the Department of Finance or Personnel of the Northern Ireland Office or the Revenue and Customs at Bootle. However, the Inland Revenue can call for a set of accounts at any time. For further information regarding full registration please contact: Department for Social Development Charities Branch Voluntary and Community Unit 3 rd Floor Lighthouse Building 1 Cromac Place Gasworks Business Park Ormeau Road Belfast BT7 2JB Tel: 028 90829414 Annexes: A. Notes for Independent Examiners. B. Notes for the Completion of Accounts Form 60 and 61. C. Annual Report - guidance. 4-4

Annex A Chapter 4 NOTES FOR INDEPENDENT EXAMINERS 1. The examiner should compare the accounts of the charity with the charity s accounting records in sufficient detail to provide a reasonable basis on which to decide whether the accounts are in accordance with such accounting records. The following actions should be taken: a. The accounts must be compared with the underlying accounting records. b. Test checks must be made of the posting of entries from books of prime entry to the cash book, e.g. receipt books. A review of bank reconciliations will provide a useful check in these circumstances. 2. The examiner should review the accounting records maintained in order to provide a reasonable basis for the identification of any material failure to maintain such records. This procedure is not aimed at identifying the occasional omission or insignificant error, but at any gross failure to maintain records in a manner consistent with statutory requirements. The following checks should be carried out: a. The examiner should check to ensure that the accounting records are well organised and capable of ready retrieval and analysis. b. Check to ensure that the accounting records are up to date, readily available and provide the basic information from which the financial position can be ascertained, not only at the year end, but on any selected date. c. Ensure that the accounting records contain: (1) Details of all money received and expended, the date, and the nature of the receipt and expenditure. (2) Details of assets and liabilities. 3. The final accounts must be examined to see if they reveal any unusual items, unexpected fluctuations, or inconsistencies with other financial information. This is called analytical review and the following steps should be taken: a. The accounts should be compared with those for comparable periods. b. The accounts should be compared with any budgets or forecasts that have been produced. c. Consideration should be given to whether incoming resources and the application of resources are consistent with known fund-raising sources, activities and the objectives of the charity. d. The examiner should consider whether the liabilities and current assets disclosed are consistent with the scale and type of activities undertaken. 4-A-1

This is not a comprehensive list of procedures. The examiner will need to exercise judgement and to draw on experience. If the analytical review identifies an unusual item, unexpected fluctuation or inconsistency, the examiner should seek explanations from the committee. If the explanations are not satisfactory, in the case of squadrons the examiner should refer the matter to the Wing CO or Wg Ex O and in the case of wings to the Regional Commandant. The higher authority will investigate the issues raised and take the necessary action to rectify the accounts. In the case of squadrons, following the investigation, if the discrepancy can be identified as accounting errors the Squadron Treasurer and Chairperson will sign the accounts to acknowledge the errors and the Wing Chairperson may choose to monitor the accounts over a three to six month period or until he/she is satisfied the correct procedure is followed. 4. If the examiner identifies correct accounting records have not been kept or the accounts do not accord with the accounting records the matter should be raised with the committee and to seek the necessary amendment to the accounts. If there are still concerns the matter should be fully explained in a report produced by the examiner. This report should be attached to the accounts. 4-A-2

Annex B Chapter 4 NOTES FOR COMPLETION OF ACCOUNTS FORM 60 AND 61 SQUADRON / WING SUMMARY OF RECEIPTS AND PAYMENTS 1. The following guidelines are supplied to assist Honorary Treasurers with the completion of the Summary, which should be made in conjunction with this ACP and the appropriate references of AP1919 Regulations for the Air Training Corps. RECEIPTS NB: The following convention is used throughout this guide: a. Receipts 1 refers to HQ AC Accts Form 60 and 61, Page 2, Receipts Section 1, Balance in Hand as at 31 March 20 - Welfare Account. b. Payments 3(c) refers to the Form 60, Page 3, Payments Section 3(c), General Payments - Sport. 2. Opening Balances. Receipts 1 Balance from Payments 5 from previous year. 3. Receipts from Interest and Grants. These are all recorded in Receipts 2. NB. Interest received from investment or deposit/current accounts must be shown. 4. General Receipts. Receipts 3(g), Form 60 - Flag days are not an expected method of fund-raising even when wholly undertaken by adult staff or parents. (See AP1919 Chap 11 para 1127). 5. Other Receipts. All receipts should be itemised. 6. Loans and Overdrafts. If a loan or Overdraft has been received then the value must be shown in Receipts 5. 7. Total 1. This MUST equal Payments Total B. PAYMENTS 8. Loans and Overdraft Charges. If there have been any costs or charges incurred as a result of a loan or overdraft, then these are to be shown at Payments 1. 9. Payments from Education or Local Authority Grants. Payments 2 is used to show the expenditure of an Education or Local Authority Grant and should not exceed the value shown at Receipts 2. 10. General Payments. Payments 3(a), Accounts Form 60 - Subscriptions to the Wings MUST be shown. Payments 3(a), Form 61 Subscriptions to ATC General Purposes Fund MUST be shown. 11. Other Payments. All purchases/expenditure should be itemised. 4-B-1

12. Closing Balances. Payments 5 - This is the Account Balance as at 31 March 20. (A reconciliation is not to be shown). 13. Total 2. This MUST equal Receipts Total A. 4-B-2

Annex C Chapter 4 ANNUAL REPORT 1. Excepted charities are currently not required to produce a Trustees Annual Report; however, it is best practice to do so. The Charity Commission have created a template report which may be utilised at www.charitycommission.gov.uk. A Charity s Annual Report must consist of: a. Reference and administration details including: (i) For the period start and end date. (ii) Charity name. (iii) The Charity s registration or exception number. (iv) The Charity s address. (v) Names of the Charity trustees who manage the charity and anyone who has served during the year in question. b. Structure, governance and management. (i) (ii) (iii) (iv) Type of governing document. How the charity is constituted. Trustee selection methods. Additional governance issues. c. Objectives and activities: (i) (ii) Summary of the objects of the Charity. Summary of the main activities. d. Achievements and performance: (i) Summary of the main achievements of the charity during the year. e. Financial review. (i) (ii) (iii) Brief statement of the charity s policy on reserves. Details of any funds materially in deficit. How expenditure has supported the key objectives of the charity. f. Any other optional information. g. Declaration: (i) The Trustees declare that they have approved the Trustees report and it is signed and dated by one or more of the Trustees. 4-C-1

CHAPTER 5 INFORMATION ON THE ADMINISTRATION OF PUBLIC FUNDS INTRODUCTION 1. Commandant Air Cadets exercises overall control of ATC public funds and may enquire into the administration of a wing or squadron and call for any documents required for this purpose. 2. The Treasurer is to administer any Public Funds in accordance with HQ AC regulations e.g. refunds for Squadron Owned Vehicle (SOV) travel costs or rations etc. This task should not be delegated to the Commanding Officer of a squadron, wing or to any other person who is not a member of the local Committee. 3. Under certain circumstances, both wings and squadrons may hold public monies in their accounts, in particular, where a combined cheque is received (e.g. monies collected for Summer Camp where the total is made up of public and nonpublic monies). In these circumstances it is acceptable to lodge the monies in the unit s Welfare Fund. However, as soon as the public element of the payment becomes due, then it is to be forwarded to the relevant public account in line with instructions issued at the time. Where no instructions have been issued, a cheque should be raised to HMG Public Sub-Account 3615 and forwarded to the Accounts Officer, Headquarters Air Cadets, RAF Cranwell, Sleaford, NG34 8HB, clearly stating what the payment covers. 4. Wings are to ensure that camp levy payments received for Annual Camps are paid into the Public Account in accordance with the instructions issued by TG2 HQ AC. This may be to the Accounts Office at the hosting station, or by cheque made to HMG Public Sub-Account 3615 and forwarded to the Accounts Officer HQ AC. 5. All squadron accommodation infrastructure support functions met from public funds are covered in ACP 21 Infrastructure Manual. TRAVEL 6. Travel claims by members of the Corps, and cadets travelling independently to gliding squadrons, are to be submitted to HQ AC, Accounts through Wing HQ by the person concerned. 7. Cadets who are authorised by Wing HQ to attend for training at a part time gliding squadron may submit a claim for travelling expenses on Accounts Form 5. Under current regulations only a portion of the return fare may be claimed and the cadet is to make a contribution. It should be noted that cadets are not allowed to claim Motor Mileage Allowance. Full details may be obtained from ACP 300, FI 316. The completed form is to be forwarded to HQ AC, Accounts for payment. 8. Countersigning Officers should be aware that they are responsible for the accuracy and propriety of the claims they sign, that all duties have been properly authorised and to the best of their knowledge duly performed. Therefore, all claims 5-1

should be carefully scrutinised prior to signing the declaration and that all claims should be submitted within the regulations contained in AP 1919 and ACP 300. 9. Collective units of travel (parties of cadets accompanied by adult staff) at public expense are undertaken by the most cost effective means. Any rail warrants for these visits are issued by Wing HQ. 10. Where the use of public transport is considered to be impractical, squadrons may apply for authority to hire civilian transport or to use a squadron owned vehicle. Applications are to be submitted to Wing HQ. Full details of the procedures to be used are contained in ACP 300, FI 304. 5-2

REFERENCES CHAPTER 6 REFERENCES AND SUMMARY OF ESSENTIAL FINANCIAL CONTROLS 1. This publication provides detailed guidance on the regulations governing the administration of public and non-public funds. Further information is contained in ACP 300 (ACO Finance Instructions) and ACP 11 (Administration of Civilian Committees in the Air Training Corps). Civilian Committees are to be aware of these regulations and those contained in AP 1919 (Regulations for the Air Training Corps) and particularly Chapter 11 in respect of financial regulations. ESSENTIAL FINANCIAL CONTROLS 2. All changes of Squadron and Wing Honorary Treasurers and bank account details are to be notified to the Personnel Section, HQ AC through Wing Headquarters as and when they occur. 3. The Committee is to ensure that funds are at all times safeguarded against loss or misappropriation in accordance with the guidelines detailed in Chapter 1, paragraph 7 and particularly the following: a. Cash Payments are to be discouraged. b. Receipts are to be banked as soon as practicable and at least weekly. c. Access to cash restricted to nominated persons only. 4. Treasurers are to issue Cash Handling Instructions, adapted to meet local specific requirements, to all members who are authorised to handle cash or cheques. 5. Income controls. All income received is to be kept in a secure location with restricted access until lodged in the Fund bank account. Funds held in cash are to be kept to the essential minimum and within the Committees agreed limit and kept in a secure location with restricted access. 6. Expenditure Controls. In accordance with Chapter 1, paragraph 16, and bearing in mind any agreed exceptions, Civilian Committees should authorise all payments which should be supported by original and valid documentation. The items should then be recorded in a property book or register. 7. Payment by Cheque. Cheques are the safest method of payment. Chapter 1, paragraph 18 refers. Ideally cheques should be signed by a minimum of two signatures: the Treasurer plus any other nominated member of the Committee. 8. Public Funds. Utility companies are to be advised to record the Squadron (by name) as the registered consumer and of the address where invoices should be forwarded. This must be a nominated member of the Squadron Committee (normally the Squadron Commander or Honorary Treasurer). Utility companies must 6-1

also be advised of any change that will affect the billing process, for example, a change of address or appointment (Chapter 5 refers). 9. Non-Public Funds. Civilian Committees are to be particularly aware of the items and services which are considered a proper charge to Squadron Welfare Funds and which are listed in Chapter 2, paragraph 6. AUDITS AND CHECKS 10. At the end of each month the Treasurer is to carry out a cash and bank reconciliation, to ensure that the cashbook is balanced and agrees with the bank statements and cash held. Where there are very few transactions (under 10 per month) conducted through the bank account a 3 - monthly reconciliation will suffice. 11. In addition, the Committee is to make regular checks to ensure that records are being accurately maintained. The Committee is to nominate a member (not the Treasurer or any person who has cash handling responsibilities) to carry out the random spot checks detailed in Chapter 4, paragraph 4 at least every 6 months. 12. Squadron Accounts are to, in addition to internal checks, be inspected by the Wing as part of their annual inspection and recorded on the inspection report. Also Wing Accounts are to be checked by the Region, as part of the annual Wing inspection in accordance with Chapter 4, paragraph 5. 13. Annual Accounts. The Committee is required under charity law to ensure that proper books and records are kept and an annual summary of receipts and payments is prepared and independently examined. Accordingly, as detailed in Chapter 4, paragraphs 6-17, HQ AC will issue instructions in February of each year detailing how the annual accounts are to be produced and independently examined. The Regional Commandant Scotland & Northern Ireland will issue local accounting instructions for their Wings and Squadrons. 6-2