(a) Application/Budget (b) Regular reports and returns (c) Annual Project accounts (d) Parent Body accounts
(2) Does the funder understand the relationship between the individual Project and Parent Body.
2. APPLICATIONS/BUDGETS:
It is essential that the application is based on fact land reality and not on last year's application plus a built-in element for contingencies.
This is not only to ensure that the figures and costings are reasonable and based on up-to-date information, but also to ensure a consistency in the various figures supplied to the funder. Any variances between the application and the accounts supplied may, at best result in a query, and at worst result in a withholding of funds.
(1) Is the expenditure in the correct cost centre? (2) Is the income in the correct cost centre?
3. PROJECT ACCOUNTS/REPORTS:
(1) How much detail does the funder require?
(2) Are all our expenditure headings acceptable? For example, are your on-costs, (e.g. audit fee), chares to be included or re-categorised.
(3) Are annual accounts sufficient or do we need to provide quarterly accounts?
(4) Is the funder's financial year different to Project/Parent Body and do we have to adhere to this rather then our own.
(5) What is the funder's timescale for reporting?
(6) Are separate salary details required, if applicable.
(7) Does the funder require the individual Project accounts to be separately audited or will they be satisfied with an extract from the audited accounts.
A separate audit certificate for a project can be arranged during our normal audit in June, but at an additional cost to the Project. However, if the auditors have to make a special visit this adds to the cost. Therefore try to persuade funders to accept an 'extract' in preference to a separate audit.
(8) Is a special audit certificate required? The remarks on timing in (7) above also apply (9) Will the funder require their own auditors to examine the project's records? (10) Do the accounts separately identify the funder's cash and is the correct amount shown?
4. RESERVES:
Some funders may consider the level of a project's reserves, (or Parent Body reserves as a whole) are too high and that we have no need of further funds. You may need to explain that most funding is project specific and therefore only available for use on the project for which it was specifically given.
Only General Funds are freely available, but it must be noted that an organisation the size of some Parent’s Body’s, (albeit perhaps deemed a ‘small charity'), must have a level of reserves to ensure its survival. As a well run and prudently managed organisation a Project/parent Body should be aiming at reserves sufficient to cover three months operating expenses at least.
A further point is that reserves are not necessarily matched by cash in the bank; they are tied up in other assets such as property, debtors and office equipment.
5. VAT AND TAX ISSUES:
These are dealt with in the note on VAT, Tax and Gift Aid matters which can be found on another web page by clicking on the highlighted link.
6. CONTRACTS:
Wherever possible prepare a written contract which should include the following:
(a) The cost or fee subject to VAT where applicable. (b) Payment terms (and interest?). (c) Financial reporting requirements.
7. CASH FLOW:
Have you considered the cash flow implications of the funding? When will you receive the cash relative to when you have to incur the expenditure?
8. AVOID SURPRISES:
If all requirements and deadlines are agreed in advance it should be relatively easy to keep everyone happy Funder, Project and even the Treasurer/Finance Director.
Please also see our associated web pages relating to ‘finance’ issues at:
Funder, Project and even the Treasurer/Finance Director.
Petty Cash Voucher
