The success of shops often depends on volunteers, which can present challenges when implementing financial controls. Below are several areas trustees and management should consider.
Access to shops. It is important to consider who has keys to access shops and to keep a log of keyholders. Often, it is not practical for only the shop manager to have keys, which means volunteers or neighbouring shops have to hold them. If this is the case, consider asking neighbouring shops to check the identity of people picking up keys before releasing them.
Till access. Who has access to the tills and are there any restrictions in what users can do? For example, do all users have authority to process refunds or is this limited to reduce the risk?
Passcodes. Do those who have access to the tills have unique log-in passcodes? It is important that all users can be uniquely identified to help keep a clear audit trail for the transactions that have been processed. It is also important that passcodes are not shared between users and are changed on a regular basis. This will help to reduce the risk of unauthorised till use.
Safe access. Does your shop have a safe that is securely fixed? Who has access to the safe? Are the keys or passcodes to access the safe shared? It is important to limit access to the safe and maintain a log of who has access. When an employee or volunteer no longer works at the shop, all keys should be returned or the passcode to access the safe changed.
Segregation of duties. Is there a dual count of the banking each day or is the staff member responsible rotated each day? Do you have secure banking facilities or processes to protect staff carrying cash to the bank? It is important to consider whether there are sufficient controls in place to identify any error in cash counts and banking.
Stock. Are there controls in place to record the stock received in shops? Are stock counts conducted at least annually on bought-in goods?
Retail Gift Aid. Are your employees/ volunteers given retail Gift Aid training? Is a log of training provided and maintained? Do you have retail Gift Aid targets for shops? Such targets may raise concerns during an HMRC visit that staff have an incentive to incorrectly complete retail Gift Aid forms in order to meet targets.
Collection boxes. Are there collection boxes in your shops? Are these secure or are they at risk of being stolen?
Data protection. Do your shops have facilities to securely store personal data such as completed retail Gift Aid forms or staff personal files? Is such information securely stored? While a lot of shops will have capabilities to store information securely, it is important that staff are made aware of the importance of doing so, especially under GDPR legislation.
Other forms of income. Increasingly, charity shops are looking for new ways of generating income. They may have rag collections or book sales, they may “upcycle” donated items into more sellable goods, or they may set up partnerships with local recycling centres. It is important that trustees and management are aware of any new income generation ideas being implemented in shops and assess the risk to the charity. The charity should also assess any tax implications of new sources of income, such as the upcycling of donated goods.
Siobhan Holmes is a charities and not-for-profit senior manager at haysmacintyre
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