Big Local funding must only be used for the charitable
purpose for which it was granted, in accordance with the budget set out in the
Big Local plan, and in line with the payment schedule in the funding agreement.
You need to administer, spend and account for the funding appropriately, as
Internal financial controls
Internal financial controls are the checks and procedures
within each locally trusted organisation that help ensure funding is administered,
spent and accounted for appropriately. The controls let everyone know what
should happen - who can do what, when and how.
As a minimum we expect:
- Big Local income and expenditure to be recorded
as such, and to be readily identifiable in your organisation’s accounts as
- Big Local expenditure to be reconciled on a
regular basis, using the bank statement of the account used for Big Local
against spend, with variances documented, for example with un-cleared items
- Clear separation of duties to prevent fraud -
which means that the person authorising expenditure is not the person
generating cheques or electronic bank transfers.
- Appropriate use of recruitment, grant
application and tendering processes, following procedures within your own organisation
manuals, for example finance manuals, HR procedures etc.
- Collaborative working with the Big Local
partnership to enable them to fulfil their responsibilities as outlined above -
that is, agreeing how you work together, what their role is in decisions
related to spend, how you will report back to them on spend and what is
achieved with the funding.
- A named person to be responsible for administering
and accounting for the Big Local funding within your organisation.
- Advance warning of any variance to the budget
and/or the funding timeline. The funding agreement includes a payment schedule,
reference to the Big Local plan (which includes the project, activity or
services that you are making payment for), and a timeline. Please note that we
cannot fund retrospectively anything
that is committed to before we (Local Trust) confirm the funding, and any activities that happen or start before the funding is confirmed.
If you are not sure
about any of this, please ask - our contact details are in the funding
The Charity Commission publishes guidance on internal
financial controls for charities, including ‘Internal financial controls for charities’ (CC8) and an ‘Internal controls checklist’ (CC8 checklist).
In addition to the guidance in this document, we have
produced a checklist based on the Charity Commission guidance. Partnerships and
locally trusted organisations might find this useful to help them review what
they are doing or planning to do (see appendix 1).
Many locally trusted organisations employ workers and/or work with
sub-contractors as part of Big Local. The locally trusted organisation is
responsible for being clear about the employment status of the individual in
line with HMRC guidance and employment law, and for putting in place
appropriate agreements and making payments using Big Local money, in line with
the Big Local plan and your funding agreement with us.
You can find our guidance on Workers and Big Local here.
There is also plenty of advice on the HMRC website.
We use the Charity Commission’s definition of fraud: ‘a form
of dishonesty, involving either false representation, failing to disclose
information, or abuse of position, undertaken in order to make a gain or cause
loss to another’.
Unfortunately, fraud can (and does) happen. Warning signs may
- disputes or complaints about missing funds
- money being spent without an appropriate
- unexplained items listed as expenditure.
Your organisation needs to have anti-fraud measures in place
to ensure funding is not vulnerable, and to outline processes for responding
to, investigating and reporting fraud. In line with our terms and conditions of
funding, you must notify us if you become aware of, or have any grounds for
suspecting, any fraud within the activities which are funded by Big Local
funding. If you believe actual fraud has taken place you need to report it to
the police so they can investigate.
Read the Charity Commission's guidance on protecting charities from fraud.
In line with the terms and conditions of funding, Big Local
money must not be used for any purpose that is prohibited, including:
- activities that happen or start before the funding
- expenses you commit to before Local Trust
confirms the funding
- salaries of existing staff for activities they
undertake as part of their normal employment that are not related to Big Local
- items that mainly benefit individuals (for
example equipment that is not shared)
- political or religious activities
- projects or activities which the state has a
legal obligation to provide
- VAT you can recover
- general running costs not associated with the
delivery of this programme.