Reserves

1. Purpose
The reserves of The Person-Centred Association (tPCA) are held to ensure the financial stability and sustainability of the organisation. This policy outlines the principles and guidelines for the establishment, maintenance, and utilisation of reserves.

2. Definition of Reserves
Reserves refer to the portion of the Charity's unrestricted funds that are set aside to provide financial security and support the ongoing operations, activities, and strategic objectives of the organisation. Reserves may include, but are not limited to, cash, cash equivalents, and investments readily convertible into cash.

3. Objectives
The primary objectives of the reserves are:

1. To mitigate financial risks and uncertainties, including fluctuations in income and unforeseen expenses.
2. To support the continuity of essential activities during periods of financial instability or economic downturn.
3. To ensure sufficient funds are available for closure of the organisation, should the need arise. 
4. To ensure compliance with legal and regulatory requirements related to financial reserves.

4. Reserves Levels
tPCA will maintain reserves at levels determined to be prudent and sufficient to achieve the objectives above. The reserves levels are determined by the Trustee group based on a comprehensive assessment of tPCAs financial position, operating environment, and risk factors. Factors to be considered may include, but are not limited to, the following:

1. Anticipated annual income and expenditure.
2. Potential financial risks and liabilities.
3. Costs to close the organisation should the need arise.
4. Legal and contractual obligations.

This will be reviewed at the start of each financial year and recorded in the Trustee Group meeting minutes. 

5.  Utilisation of reserves 
The use of reserves should be discussed and authorised by the trustee group and recorded in the meeting minutes

6.  Documentation of Reserves
A statement on the reserves policy will be included in the annual report and will include:-

• The level of reserves held
• Why they are held

This report will also include the purpose of any restricted funds and when they are expected to be spent.

7.   Sources of information and guidance 
Charity reserves: building resilience - GOV.UK (www.gov.uk)
Reserves policy | NCVO
Reserves policies made simple - Sayer Vincent