Club Track Insurance & Auditing

[Deleted]

Advice please.
I've been looking at the Club accounts and two things jump out at me:
1. Track insurance appears quite high given the risks involved (I can't say how much as it is apparently confidential.....) How much do others pay for public running insurance and to whom?
2. We pay a substantial fee for external auditing of our limited company by a 'qualified auditor in accordance with section 7 of the Friendly and Industrial and Provident Societies Act 1968', as defined in our constitution. This status surprises me as we are only 95 members and the fee takes a huge chunk out of the subscription income. I can't find anyone who can explain the reasoning behind our Ltd. status, so perhaps someone can help? Can a Constitition be changed and our accounts audited internally? it would save a lot of money!
BTW, this is personal enquiry purely for my own benefit, I have no wish to rock the club boat!
Thanks
JB

[baggo]

Hi JB,

our club is a Limited by Guarantee Company which means (I think!) the profits are retained for use by the 'Company' rather than shared out amongst the members and gives the Club and it's members limited liability if any contracts etc. that they enter into fail e.g. the club goes bust owing large debts etc. It also gives the club a legal identity so they can own land etc. in the club's name.

Looking at last years accounts we paid nearly £800 in insurance but can't say who to as I don't have the information to hand. Our accounts are internally audited by 2 members of the club so it costs us nothing.

John

[brozier]

Speaking in general terms, it is the public liability insurance which is the most expensive part.

Most clubs run between £1-3million of cover. Although the risks are low, if you do kill someone, you will face claims of that order.

Having a LTD company limits the exposure of club members to usually a nominal £1 if the club goes bust.

What Ltd company doesn't cover you for is executive officers (the committee) being chased for (unlimited) money due to a public liability claim, so we also have insurance against that.

Insurance is our biggest cost.

[drjohn]

Thank goodness my track is in a 5th world backwater with none of the mamby-pamby insurance crap! ;D ;D ;D

DJ

[brozier]

More to the point your track isn't open to the fare paying public.....

:-)

Cheers
Bryan

[Tony K]

Loco, at the AGM, you can vote "yes" to the following for the coming year....

That the 2009/2010 Accounts not be audited but signed by the Secretary and Committee as provided for under the Deregulation (Industrial and Provident Societies) Order 1996.

Then you can do that and not get taken to the cleaners by the admin t**ts

[Deleted]

Tony, thanks for the info: most useful. I've looked at the Instrument and there appears to be a very important additional provision to prevent diehards blocking the move, i.e. only 20% of the vote is required to remove the need for auditors. I have reproduced it below. Someone please tell me if I have interpreted this incorrectly.

Power to opt out of duty to have accounts audited: industrial and provident societies
8.—(1) After section 4 of the 1968 Act there shall be inserted—

"Power of societies to disapply section 4.

(2) The power conferred by subsection (1) of this section shall be exercisable by resolution passed at a general meeting at which—
(a) less than 20 per cent. of the total votes cast are cast against the resolution, and

(b) less than 10 per cent. of the members of the society for the time being entitled under the society's rules to vote cast their votes against the resolution.

The AGM is in March: this new member might just rock the boat....
JB

[havoc]

A bit hard to make sure you read that correctly, you really need to ask around. I have no idea against what less than 20% must vote, but if that is "against the auditors", then 80% has to agree to remove the auditors. And (2)(b) needs also to be interpreted correctly, it looks as if you need a good turnout at your AGM.

From discussions last year your club spends the most on postage to send the club magazine around. We changed to email since.

[Tony K]

Jan 25, 2010 21:41:30 GMT @havoc said:

A bit hard to make sure you read that correctly, you really need to ask around. I have no idea against what less than 20% must vote, but .....

But Havoc, you can see what the resolution is!

[baggo]

JB,
the threshold for 'Audit Exemption' was raised considerably in 2006 with regards to the value of assets and annual turnover but frankly, I doubt if your club would have exceeded the initial levels in the first place so could have probably opted out of the 'qualified auditor' stipulation right at the beginning.

It's difficult to interpret the bit you've put in the post without seeing the whole thing but my interpretation would be (and I may well be totally wrong!),

You can vote at a general meeting to pass a resolution to remove the need to have a 'Qualified Auditor' but 81% have to be in favour of the resolution. If 20% of the votes are against the resolution then the resolution is lost and that is the end of it.

If the resolution is passed at the general meeting, you then have to put the vote to all the members of the club who are entitled to a vote and 91% of the members have to vote in favour of the resolution for it to be passed. If 10% of the members vote against the resolution then it's lost and you are stuck with having qualified auditors.

John

[Tony K]

(b) less than 10 per cent of the members of the society for the time being entitled under the society's rules to vote cast their votes against the resolution.

Beg pardon Sir, the above is not the same as 90% of the membership voting in favour. (IMHO)

Loco - will send you a PM later.

[Deleted]

Jan 26, 2010 8:42:57 GMT Tony K said:

(b) less than 10 per cent of the members of the society for the time being entitled under the society's rules to vote cast their votes against the resolution.

Beg pardon Sir, the above is not the same as 90% of the membership voting in favour. (IMHO)

Thanks Tony
That's the trouble with words written by the lawyers: they are designed to generate more income while they decipher them for you! BTW in several different ways....
JB

[baggo]

Jan 26, 2010 8:42:57 GMT Tony K said:

(b) less than 10 per cent of the members of the society for the time being entitled under the society's rules to vote cast their votes against the resolution.

Beg pardon Sir, the above is not the same as 90% of the membership voting in favour. (IMHO)

True, I was assuming that all members would cast a vote, which of course, they would not have to.

Whichever way, the odds are heavily loaded against any change as it will only take a small number of people to prevent it. In your case though,I don't really see why anyone should object if it's going to save the club a lot of money!

John

[Deleted]

Thanks to John, Tony, Bryan and Havoc.
I have since found out that this was all done to give the members a 'Nice Warm Feeling' against any liabilities and also prevent unwelcome interference by the FSA. As has been pointed out, we have a really small turnover so don't need formal auditors (unless the members think that our treasurer is planning a trip to the Bahamas) , and our Public Liability insurance protects the committee members from personal liabilities, so there is no contest against change, except ME's inbuilt reactionary tendencies....!

One more thing: the reporting of accounts. We have proper accounts submitted to the FSA every year, but I can't quite fathom from the Deregulation Order how we reduce this burden or the new mechanics of it. I suspect that a simple statement of income against expenditure will do. Can anyone help?
Thanks so far.
JB

[russell]

Have a look at www.companieshouse.gov.uk you can file your annual return on line.

Russell.