Reserves Policy

1. Statement

The Policy supports the running of Cullingworth Village Hall. The policy is reviewed following any significant change in financial circumstances and as a minimum annually. 

Income reserves are described by the Charity Commission as the resources the charity has or can make available to spend for any or all of the charity’s purposes, once it has met its commitment and covered other planned expenditure.

There are two types of reserves 

  1. Unrestricted reserves, which are held to offset risks, and
  2. Restricted reserves, which are raised or held for specific
    future purposes;  

There may be occasions when an administrative act designates unrestricted funds for a particular project or use.

2. The reasons for reserves

The Charity Commission’s “Charities’ Reserves” Policy, CC19 and “Statement of Accounting Practice – Accounting and Reporting By Charities (SORP 2000)”, requires a Reserves Policy  to be included in the “Trustees Report and Annual Accounts” for each year end.

The following are considered when planning for the level of reserves:

Unrestricted reserves for ongoing maintenance and breakdowns

A free surplus of £10,000 shall be maintained to manage cash flow, cover emergencies such as boiler/heating breakdown, damage to flooring/equipment orpay for new purchases/acquisitions or to set aside for a particular project.

Restricted Reserves for infrequent maintenance costs and asset replacement

In order to maintain the facility in good condition for the benefit of all hall users and to meet conditions of the Insurance Policy and Premises Licence major maintenance and suchlike activities will be undertaken on a planned, regular but infrequent basis. Such expenses are normal operating expenses and will be undertaken using the operating surplus of £10,000. If accessed efforts should be immediately put into place to restore the balance to £10,000.

Infrequent Maintenance and suchlike activities include:

  • Internal redecoration of the whole building
  • External redecoration/repairs
  • Floor refurbishment  
  • Electrical certification including emergency lights certification
  • Car park repairs
  • Snagging new hall, unforeseen new hall expenses/outgoings

Grants received for specific purposes will be evidenced in a restricted reserve “pot” within the accounting structure and used solely for the purpose designated.

Designated Reserves:

Funds in excess of restricted and unrestricted reserves detailed above are for the settlement of the final invoice for the building and fit out of the Village Hall and for other large scale projects deemed necessary by the Management Committee to further improve the Village Hall facilities.

Reasons why we need reserves:

Resources are vital to support the hall’s ability to operate and to the long-term viability of the hall and to its ability to achieve its aims and objectives. They are also vital to enable the hall to meet its legal and contractual liabilities should the organisation have to close. 

The Management Committee understand the principles behind the Reserves, setting out appropriate levels of reserves based upon risk assessment, which is based on factors which impact upon the hall.

Restricted reserves will continue to be built on as a contingency to safeguard the management of the hall and to meet the as yet unknown running costs.

The Treasurer and Management Committee are responsible for keeping the policy up to date and it shall be reviewed annually or upon significant change in financial circumstances.