Controls Policy.

01Segregation of Funds

Client funds are held separately from the company’s own operating funds.

Where applicable:

• Service charge monies are maintained in designated, ring-fenced, purpose-provided client accounts
• Funds are applied solely for the benefit of the relevant development
• Office and Precedent operating expenses are not paid from client accounts

02Authorisation & Controls

The company operates structured internal controls to ensure:

• Expenditure is authorised in accordance with the lease and management agreement
• Contractor invoices are reviewed prior to payment
• Dual review processes are applied where appropriate
• Financial records are maintained contemporaneously

03Financial Reporting

We provide structured financial reporting to:

• Directors of resident management companies
• Freeholders (where applicable)
• Leaseholders, where required under statutory rights and instructed to do so, by the respective client

Reports typically include:

• Budget / year to date expenditure comparisons
• Reserve fund balances
• Year-end reconciliation statements / Section 21 summaries
• Section 22 responses

04Reserve Funds

Where leases provide for reserve or sinking funds:

• Contributions are collected / transferred to designated client deposit accounts, mid-year or at year-end, and accounted for separately
• Funds are monitored against anticipated lifecycle expenditure
• Balances are reported transparently

05Record Retention

Financial documentation, invoices and supporting records are retained in accordance with statutory requirements and governance standards.

06Professional Standards

Precedent maintains Professional Indemnity and Client Money Protection Insurance and operates accounting procedures consistent with recognised industry practice.