Reserves Policy for the Village Hall, Edington

1. Definition of Reserves

The term ‘reserves’ is used to describe that part of our funds that are freely available to fund our general operations and so is not subject to commitments, planned expenditure or other restrictions. Consequently, Reserves do not include endowment funds, restricted funds and designated funds set aside for a specific purpose.

2. Why the village hall, Edington (the hall) needs Reserves

Reserves are required for the following reasons:

- To fund unexpected expenditure, for example unexpected repair and maintenance costs, or replacement of Hall equipment, or to fund an opportunity that is too good to be missed as it will allow the trustees to deliver the Hall’s mission in a more effective or comprehensive way.

- To fund shortfalls in income, for example when income does not meet expected levels of the Hall’s regular running costs still need to be met.

- To fund short term working capital requirements, for example when putting on a pantomime or other event and cash outflows are required before income is received.

3. The level of reserves the Hall needs:

- Unexpected expenditure can vary but larger items/repairs tend to be in the region of £500-£5,000 (e.g. boiler replacement, floor maintenance, emergency electrical/plumbing works, replacement security doors)

- Regular fixed running costs are approximately £1,000 per month, in the event there was a shortfall of income for 6 months £6,000 would be needed. These may be much increased due to energy price increases (more than double).

- Upfront cash requirements to stage an event are estimated at above £3000.

A reserves level of £6,000 is considered appropriate to cover each of these eventualities.

4. How we will maintain reserves at the level determined.

The level of reserves is monitored monthly and reported as part of the treasurer’s monthly finance report to the committee. Any spend from the reserves will be approved in advance by the management committee.

Where there is a period of time where reserves exceeds immediate spend requirements, significant excess funds will be invested with the COIF Charities investment Fund.

5. Arrangements for monitoring and reviewing the reserves policy

The reserves policy, including the level of reserves required, is reviewed on an annual basis as part of the budget setting for the financial year ahead.