Suspect activity in non profit management team

BeeH

Hello,
I was hoping to get some advice as struggling to find the right place to point this question at.
I'm a director for a very local non-profit that runs a community event once a year event in Scotland.
We have lots of different section exhibits, and each section leader takes entry money for their exhibits, then passes it to the central committee accounts (me)
As we're a local volunteer group, our initial cash handling isn't as tight as a business, but I think we're good at the accounts end when we receive the cash

I was advised that someone had given one of the section leaders over 4 thousand pounds, and they'd bank it. That amount is not in question. I checked the bank and only half had been banked. When I questioned it I was told that there'd been a mix up and it would be sorted out. I didn't necessarily believe this but there isn't a lot of choice.
After a week, it still hadn't been banked and I brought my concerns up with a couple of the high ranking committee, and they contacted the section leader who said it would be sorted out. It still hasn't and these people are all friends so I'm struggling to understand the reasons.
As a fellow director, is this implicating me in something illegal, or is this just morally unsound? I'm thinking that it's not the kind of thing I want to be tied up in once this is sorted out, as I keep things very tight myself.

00ec25

you mention you are a "director", so please read the following link and let us know what legal entity you are:

https://www.resourcecentre.org.uk/information/legal-structures-for-community-and-voluntary-groups/

your answer will determine who reports what to whom.

BeeH

According to that we are a Community Interest Company.

Savvy_Sue

00ec25 wrote: »

you mention you are a "director", so please read the following link and let us know what legal entity you are:

https://www.resourcecentre.org.uk/information/legal-structures-for-community-and-voluntary-groups/

your answer will determine who reports what to whom.

BeeH wrote: »

According to that we are a Community Interest Company.

I don't have time to check those links out thoroughly, so I'm addressing this as much to 00ec as the OP - does this apply to Scottish organisations? Because I know Scottish charities have to register 'up there' (as well as 'down here' if they operate north and south of the border).

Does this regional link give the same result?

Owain_Moneysaver

Your organisation should have established procedures for handling cash (issuing receipts, banking at regular intervals, etc) that the section leaders should follow - regardless of whether they are paid or voluntary. I suggest these are updated so that in future section leaders cannot accept more than £n and any payments greater than that should be made by cheque/transfer to 'head office'.

The organisation needs to write to the section leader, telling them that they must bank the money within x days and that if they do not it will be reported to the police as theft.

When the money has been banked, the section leader should be sacked from their position for failing to follow cash handling procedures and all books and paperwork returned to the organisation.

00ec25

BeeH wrote: »

According to that we are a Community Interest Company.

OK, so on that basis you as a director have the legal authority to require the section leader to deposit the money which, it appears, you have corroborating evidence to say is £4,000, not the £2,000 you have so far received.

If it is not banked then you should report the matter to the police as a straightforward case of theft.

BeeH

Thanks, it makes sense to report to the police.
I'll ask the other committee members to make this formal, and the suggestion that in future we have a max payment to hand across to each other is a good one too.

phill99

I appreciate that cash is often the way that monies are paid within small charities. However, I would encourage you to try and set up other cash-less methods of payment eg via a portal on a website, pay pal, cc/dc payments etc. This will make your accounting easier but will also minimise the need for cash handling.