Reserves Policy

Purpose

This policy sets out how Towerblock Radio CIC builds, maintains and uses financial reserves to ensure financial sustainability and manage risk.

Scope

This policy applies to the board, Finance Lead and all those involved in financial planning.

Definitions

• Reserves are funds held by Towerblock Radio CIC that are not restricted, designated or committed.
• Restricted reserves are funds that must be used for a specific purpose as required by the funder.
• Designated reserves are funds set aside by the board for a specific future purpose.
• Free reserves are unrestricted funds available for general use.

Responsibilities

The board sets the reserves target and approves use of reserves. The Finance Lead monitors reserves and reports to the board.

Policy Statement

Towerblock Radio CIC maintains reserves to ensure financial sustainability, manage risk, and protect the organisation against unforeseen events. Reserves are managed in accordance with the Charity Governance Code (as best practice for CICs) and funder expectations.

Detailed Procedures

Reserves target

The board shall set a free reserves target equivalent to three to six months of unrestricted operating costs. The target shall be reviewed annually based on the annual budget.

Purpose of reserves

Reserves are held to cover unexpected reductions in income, meet unforeseen expenditure, provide time to restructure or wind down if necessary, meet commitments during transition periods, and fund strategic development.

Use of reserves

Use of free reserves requires board approval. The board shall consider whether the use is consistent with the mission, whether it is necessary and proportionate, the impact on the reserves target, and whether alternative funding sources are available.

Monitoring

The Finance Lead reports on reserves at each board meeting, including current free reserves, movement since last report, comparison to target, restricted and designated reserves, and any planned use.

Reporting Process

Reserves are reported in the annual report and accounts and to funders where required.

Compliance Requirements

• Companies Act 2006.
• Community Interest Company Regulations 2005.
• Charity Governance Code (best practice).
• Funder requirements.

Monitoring

The board reviews reserves at each meeting. The reserves target is reviewed annually.

Review Cycle

This policy shall be reviewed annually.

Version Number

Version 1.0

Approval Section

Approved by: Towerblock Radio CIC Board Date: July 2026 Next review: July 2027

Related Policies

• Finance Controls Policy
• Grant Management Policy
• Investment Policy

Website URL slug

/policies/reserves-policy

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Reserves Policy | Towerblock Radio

Meta Description

Towerblock Radio CIC's reserves policy defining reserves targets, restricted and designated reserves, use of reserves and financial sustainability for funders.

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Governance

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reserves, financial sustainability, restricted funds, designated reserves, free reserves, CIC finance