Reserves Policy

Summary

The purpose of this policy is to set out the Board’s reasons for keeping reserves and to set out the level of target reserves.

Policy

The trustees feel that the nature of TRAIN’s work to improve the life opportunities of young people aged 10 to 18 in Didcot and Wallingford, especially those who are in need, disadvantaged or vulnerable, requires a level of reserves to ensure a degree of continuity of support for our young people, in the event of:

• A sudden reduction in income;
• Cashflow difficulties arising from uneven income streams or unexpected expenditure;
• Closure of the charity.

The organisation also recognises its responsibilities as an employer to hold sufficient funds to provide proper notice and redundancy costs in the event of a closure.

The trustees have set a level of between 4 and 6 months of operating costs for the organisation as the desired level of unrestricted reserves, excluding fixed assets.

The trustees have designated reserves where there are planned commitments that cannot be met by anticipated future income alone.

The reserves policy and the levels of reserves are reviewed yearly as part of the annual budgetary process.