Funding and Monitoring Code of Practice 2013
SECTION / CONTENTS PAGE NUMBER1 / Who is the Code for? / 3
2 / Aim / 3
3 / What is a Third Sector Organisation? / 3
4 / Underlying Principles / 3
5 / Scope / 3
6 / Types of Funding / 4
7 / Notification of Funding Opportunities / 4
8 / Access to Funding Opportunities / 4
9 / Contractual Documentation / 5
10 / Inflationary Variation / 6
11 / Length of Funding Agreements / 6
12 / Reserves Policy / 6
13 / Monitoring and Evaluation of Performance / 6
14 / Financial Reporting / 7
15 / Payment Procedures / 7
16 / Underspends/Overspends / 8
17 / Conclusion of Council & BCUHB Funding / 9
18 / Intervention when a Funded Organisation is in Financial or other Difficulty / 9
19 / Application of the Code / 9
20 / Review of the Code / 9
21 / Breaches of the Code & Resolving / 10
Disagreements
APPENDICES
4 / Procedure for Resolving Disputes / 11 – 14
5 / Bibliography / 15
6 / Development and Consultation Process / 16
1. WHO THE CODE IS FOR?
Services provided by Third Sector organisations are a vital part of the variety of services provided to meet: community needs, strategic priorities, identified user needs and service priorities.
The Code is for those Third Sector organisations receiving funding or who would seek to be funded by Wrexham County Borough Council [the ‘Council’] or Betsi Cadwaladr University Health Board [the BCUHB], including guidance on the monitoring and evaluation requirements that accompany such funding.
2. AIM
This code of practice aims to maintain the positive relationship that exists between the Council, the BCUHB and the Third Sector in Wrexham and sets out some principles of monitoring and funding that will affect the Third Sector.
3. WHAT IS A THIRD SECTOR ORGANISATION?
The Welsh Government describes the Third Sector’s common characteristics as, “Independent, non-governmental bodies, established voluntarily by citizens, who are motivated by the desire to further social, cultural or environmental objectives and are committed to reinvesting their surpluses into their objectives.”
The description of the Third Sector is very broad, including community associations, self-help groups, voluntary organisations, charities, faith-based organisations, social enterprises, community businesses, housing associations, cooperatives and mutual organisations as well as many others. These types of organisations have lots of different legal identities. They can be registered and unregistered charities, companies limited by guarantee (which may also be registered charities), Community Interest Companies, Industrial and Provident Societies and unincorporated associations. [1]
4. UNDERLYING PRINCIPLES
· Equal status is given to the Third Sector, the Council, the BCUHB and places rights and responsibilities on all partners.
· The Code provides practical guidance and as such is subject to monitoring and review as appropriate.
· The Code will ensure that transparency is a key feature of all monitoring and funding arrangements.
5. SCOPE
This Code of Practice relates primarily to funding received by the Third Sector from the Council and the BCUHB, either individually or jointly. Where funding is administered by the Council or BCUHB on behalf of a third party the criteria laid down by the third party funding body will be followed.
6. TYPES OF FUNDING
The Council and BCUHB recognise that some Third Sector organisations provide strategic support to their overarching aims and objectives and may support them through grant funding.
Where a specific service is required this will generally be awarded through a competitive tendering process which will be open to Third Sector organisations and private sector organisation that may choose to bid.
In some cases BCUHB will restrict the criteria to only allow Third Sector Organisation to bid for the tender.
The BCUHB does not normally provide funding for capital assets.
7. NOTIFICATION OF FUNDING OPPORTUNITIES
Notification of funding opportunities will be advertised on www.sell2wales.co.uk as they arise. On occasion the Council may advertise through AVOW’s website for the distribution of grants. Funding over £25,000 may be subject to a competitive procurement process.
8. ACCESSING FUNDING OPPORTUNITIES
The allocation of funding will be determined within a commissioning process that:
· Identifies the type and level of need.
· Identifies the volume and range of services required to meet the need, within the resources available.
· Reviews current services under best value principles, assessing their ability to meet the identified need and encourage innovation and efficiency.
· Develops a plan to meet current and future needs [especially where current services do not meet current or future needs].
· Determines the grant/contract funding arrangement price for activities and/or services
Where the Council and/or BCUHB determine that they need to purchase services through a tendering process this will be in accordance to the Public Contract Regulations.
State Aid:
Where the Council and/or BCUHB need to ensure they are not in breach of State Aid legislation the funding recipient will be required to provide all financial information required to support any investigation.
Advertising:
The Council or BCUHB will advertise funding opportunities on www.sell2wales.co.uk and, other advertising platforms which are deemed appropriate these will set out the timescales for the application and the award criteria.
9. CONTRACTUAL DOCUMENTATION:
Where the Council and BCUHB has awarded funding through a procurement process or agreed to grant fund [or provide ‘in kind’ support to] a Third Sector organisation they will be managed through a funding agreement[2]. This may be in the form of a:
(i) Letter of Agreement
This may be between the Council, or the BCUHB, or jointly. A Letter of Agreement will normally indicate short term funding below £5000. The letter will utilise the Grant Funding Memorandum which sets out the terms of agreement and specifies the activity or service to be provided by a Third Sector organisation and the performance requirements.
(ii) Funding Agreement
This may be between the Council, or the BCUHB, or jointly. A Funding Agreement sets out the terms of agreement and specifies the activity or service to be provided by a Third Sector organisation and the performance requirements for funding above £5000. It will also include a clause relating to the agreement by all parties to any variation in the specification and any resulting variations in the payment and the performance requirements.
(iii) Third Sector Contract:
This may be between the Council, or the BCUHB, or jointly. The contract will set out the dates of payment; the levels of payment for services delivered under the specification and indicate the provision for any future uplift during the term of the contract. It will also include a clause relating to the agreement by all parties to any variation in the contract specification and any resulting variations in the payment and the performance requirements.
(iv) Partnership Agreement:
This type of agreement is used where the local authority and a Third Sector organisation work together to deliver a specific service. It sets out the role and responsibilities of each partner. It will include performance requirements for both parties.
10. INFLATIONARY VARIATION:
The annual inflationary variation will be set by the funding organisations. The notification of inflationary variation should be made available in December where this is possible.
The Third Sector accepts that inflationary variation is not a guaranteed funding uplift and that no financial commitments should be undertaken until written notification of the variation figure has been received.
11. LENGTH OF FUNDING ARRANGEMENT-
The Council and the BCUHB recognises that longer term funding arrangements encourage stability in Third sector organisations and helps them to retain experienced staff. Therefore three year funding arrangements with the potential of a two year extension are to be considered as the standard, subject to standard terms and conditions in performance and notice requirements. Where the service or activity is of a short term or pilot nature, or the funding is only available for a limited time, longer term funding arrangements may not be appropriate
12. RESERVES POLICY
The Council and BCUHB recognise the need for Third Sector organisations to secure their viability beyond the immediate future.
‘To provide reliable services organisations must be in a position to absorb setbacks and take advantage of change and opportunity. Many organisations provide for this by setting aside, when they can afford it, some of their current income as a reserve against future uncertainties.’ [Charity Commission CC19 – Charity Reserves 2009] A ‘reserves fund’ is distinct from designated funds or restricted funds.
Third Sector organisations will publish a ‘Reserves Policy’ setting out the Trustees justification for the level of reserves, particularly in relation to the size of the organisation, its annual turnover and the nature of the services provided.
13. MONITORING AND EVALUATION OF PERFORMANCE
Monitoring and evaluation of performance is essential to ensuring proper use of public funds and to identify opportunities for service development. While it must be robust and effective it should be proportionate with the level of funding and risk.
The Council, BCUHB and the Third Sector recognise that there will be different monitoring and evaluation requirements for different types and levels of funding. These will be based on the principles of Best Value.
Best Value is an approach to service monitoring and evaluation that takes into account economy, efficiency and effectiveness. It is designed to ensure that the Council provides excellence in local services at a reasonable cost – that is, services which match people’s needs and priorities.
Specific monitoring and evaluation requirements will be set out in the funding agreement. The evaluation process will consult with service users and consider both outputs and outcomes in relation to Council and BCUHB priorities. Evaluation will be undertaken jointly within agreed timescales. A failure to provide information or deliver agreed outcomes or outputs for a funding agreement may lead to funding being discontinued.
Feedback from monitoring and evaluation will be provided by the Council and the BCUHB and will be used as the basis for future discussions about the funding agreement. Funders will aim to provide any feedback on monitoring and evaluation within 2 months.
Monitoring Joint Council and BCUHB Funding
Where an organisation is funded jointly by the Council and BCUHB, an officer from one of the funding organisations will be identified as a contact officer who will act on behalf of both statutory partners.
Monitoring External Funding Administered by the Council or BCUHB
The requirements for monitoring and evaluation will be made clear in the application pack and further detailed in the service specification. This will be in accordance with the requirements of the funding body, e.g. Welsh Government, Wales European Funding Office.
14. FINANCIAL REPORTING
Charities or Companies Limited by Guarantee will adhere to the Charity Commission and/or Companies House requirements on financial reporting and the reports will be made available to the funder as part of the Monitoring process (see CC15b - Charity Reporting and Accounting: The essentials April 2009 http://www.charitycommission.gov.uk/publications/cc15b.aspx ).
15. PAYMENT PROCEDURES
The Council and BCUHB recognise that most Third Sector organisations do not have sufficient resources to undertake work and receive payment afterwards. Timely payments are therefore essential to the smooth delivery of services. Therefore the Council and BCUHB will make quarterly payments in advance except in exceptional circumstances. If the provider fails to deliver the agreed service in full or in part the advance payments will be reimbursed.
The Council will make a single payment of funding awards of £5,000 and under. Where funding has been awarded for the purchase of capital items an invoice will be required for proof of purchase.
If our review processes highlight areas of concern, or financial checks question the stability of an organisation this should be managed within a measured approach on a case by case basis. In order to protect public money payment may be made monthly in arrears, or reduce quarterly advance payments to monthly advance payments.
VAT
Any funding agreement between the Council and BCUHB (client) and the service provider will be subject to the usual VAT protocols. In the event that the funding recipient is VAT registered, and the supply to the ‘client’ is deemed of a taxable nature-the service provider will be expected to provide a fully compliant VAT invoice to release payment of the agreed funding. VAT should be charged at the rate applicable at the point at which the service is delivered.
It is expected that those funding recipients who are not VAT registered will take the necessary advice in regard to any likelihood of breach of the taxable turnover threshold on acceptance of the funding.
External Funding Administered by the Council
Payment procedures will be in accordance with the requirements of the funding body.
16. UNDER SPENDS / OVER SPENDS
The Third Sector recognises that where an individual organisation cannot provide the activity or service as agreed there is likely to be an under spend on the allocated funding. If this occurs, the Third Sector organisation will inform the Council and BCUHB of the anticipated under spend as soon as possible. This will enable contingency arrangements to be agreed.
In relation to grants the provider’s retention of under spend is subject to the conditions specified within the grant award documentation
External funding will be managed in accordance with the requirements of the funding body, e.g. Welsh Government, Wales European Funding Office.
Overspends remain the responsibility of the Third Sector organisation. The Trustees must ensure they have an appropriate process in place to identify potential overspends at an early stage.
17. CONCLUSION OF COUNCIL & BCUHB FUNDING:
The Council and BCUHB recognises that when funding arrangements come to an end or need to be retendered that the transition process could potentially have a negative effect on the Third Sector organisation and its recruitment and retention. Consequently as part of our commissioning processes we will notify Third Sector organisations of our intentions, within a reasonable time frame, in relation to the services. Where third party funding is being administered the published timetable of the external funder will be followed.