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Banking

Scout group bank accounts

The Scout Association requires groups to use bank accounts (POR Rule 3.50). There are currently no rules which affect your choice of bank, and groups will normally use a bank which is convenient given the group's location and similar issues. The Association itself currently use Barclays Bank. Barclays have agreed that scout groups, districts and counties/Areas can receive free banking with Barclays.

Many groups keep separate bank accounts for each of their sections, while many others have just one account for the whole group. This decision is left to the group executive committee, as is the extent to which the funds of each particular section are ring-fenced. The group executive will need to find the correct balance between strong central control which is possible with a single bank account controlled by key executive members, compared with the ease of operation where each section operates its own account.

Sections should not expect substantial financial independence, but the committee would be wise to avoid demotivating leaders if, for example, one section does the bulk of the fundraising.

If you do choose to have sectional accounts then they must be set up as official accounts of the scout group, (for example '1st XXX Scout Group – Beavers’), with approval by the group executive. The bank must be made fully aware that the account belongs to the group.

The payment of money into a sectional bank account fulfils the requirement of 'paying the money into the group's bank account' (POR Rule 3.49). That would not be the case if an account is opened and run by an individual leader.

POR does not specify who should be the bank signatories. Rule 3.50b states that the account(s) will be operated by the group treasurer and other persons authorised by the group executive committee. If a group holds separate accounts for its sections it will probably choose to have leaders within each section as signatories, but it is important that the group treasurer is a signatory on every account held by the group. That ensures that the treasurer can deal directly with the bank if communication with the leaders becomes difficult. If a group operates sectional accounts the group treasurer should be a signatory on all accounts and receive bank statements, but they do not need to sign every cheque.

Funds

The amount of money that a group should keep in its account depends on the precise circumstances. You will need enough for day-to-day running costs, along with the repair and replacement of equipment and a little extra for a rainy day. This will vary from group to group and from year to year.

You may also be holding funds that you have been raising towards a special trip or capital project. There is no limit on the amount of fundraising that you can do, but bear in mind that the Charity Commission would not be happy if the group was holding a large amount of money that it could not use in the pursuance of the charity's aims.

Online banking

Policy, Organisation and Rules requires that, to safeguard charity funds from misuse, two signatures are needed to authorise any payment to a third party.

Internet banking needs to provide the electronic equivalent of this, ie dual secure logins to authorise transactions. The Charity Commission publication CC8 'Internal Financial Controls for Charities' section E4 includes guidance for charities on the use of electronic banking. They mention that the Unity Trust Bank has dual and triple authority options. Ask your bank what dual authority options they provide, and whether this involves additional charges. Although most banks do have products available which give dual authority control over payments, the charges are often too high to interest a scout group. We have been informed that CAF bank has a current account for charities which gives dual authorisation for electronic payments without extra costs, and other banks may offer similar services already or could do so shortly.

A group informed us that they applied for online banking just to view up-to-date statement information but then found they had been enabled to make payments with just one person authorising. They asked if it was alright to use this provided the person making payments first obtained a second person’s signature on the supporting documents. We had to tell them that this was not acceptable and that they should cancel that online facility. It was possible for one person acting alone to make payments without first getting that second signature, so their proposed safeguard was ineffective.

 

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Charity Numbers 306101 (England and Wales) and SC038437 (Scotland).
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