1. Grant Funding – things you should consider……. Ray Harper

2. Agenda Some background…… Reflecting grant funding in your financial reporting Some key long term financial forecasting considerations Q&A Creating sporting opportunities in every community 2

3. Background My responsibilities for Sport England have included: - working with NGBs to profile their original 09-13 awards - developing and implementing the financial controls over the those awards - embedding a quarterly forecasting process for NGB grant awards - ensure payments on the basis of financial need. Creating sporting opportunities in every community 3

4. Background With greater accountability imposed on Grant funding bodies it is imperative that those receiving such funds can account for how the money is spent. This will be an ongoing requirement in which ever increasing levels of scrutiny should be expected. Creating sporting opportunities in every community 4

5. Grant Funding and Financial reporting This financial control environment was new for 09-13 NGBs were asked to focus on explaining their award spend on the basis of their interventions to deliver outcomes. Most NGBs had not had the opportunity to consider what changes they would need to implement, to their accounting packages, to be able to report spend on an intervention basis. Creating sporting opportunities in every community 5

6. Grant Funding and Financial reporting Lack of mapping of underlying financial records to interventions = Much time invested in doing manual reconciliations. + Lack of consistent and verifiable audit trail. Creating sporting opportunities in every community 6

7. Grant Funding and Financial reporting Funding bodies usually reserve the right to ask for evidence of spend, from grant funded intervention to the underlying accounting records. The ability to do this gives the funding body a sense of the quality of the level of financial control inherent within the grantee Creating sporting opportunities in every community 7

8. Grant Funding and Financial reporting To summarise: The level of financial supporting information grantees will need to provide for future funding is likely to increase. Grantees should anticipate this requirement and ensure they are in a position to be able demonstrate the path between the underlying accounting records of spend, and the intervention(s) which deliver the required strategic outcomes. Creating sporting opportunities in every community 8

9. Long Term Financial Forecasting Considerations Planning issues arising from 09-13 New issues for the future Questions Creating sporting opportunities in every community 9

10. Long Term Financial Forecasting Considerations Planning issues arising from 09-13 The 4 year funding profile agreed in the award did not always reflect actual payments made. Change factors included: – Slow start to delivery resulting in misalignment of funding – Poor performance resulting in de-commitments – Treasury decisions to reduce exchequer funding – NGB decisions to restructure interventions – New funding opportunities from other Govt departments. Creating sporting opportunities in every community 10

11. Long Term Financial Forecasting Considerations Planning issues arising from 09-13 Impacting on the quality of the financial forecasts – Lack of linkage between the Delivery team and Finance – NGBs not always clear on the financial forecasting process – Churn in NGB personnel leading to lack of updates – 4 year awards but 2 year confirmed funding (CSR) Creating sporting opportunities in every community 11

12. Long Term Financial Forecasting Considerations New issues for the future Payment by Results – (1) not finalised but expected to include annual payment triggers – (2) failure to deliver will result in financial penalties, success, could unlock more funding Better visibility of funding sources (Exchequer v Lottery) Additionality – can restrict grantees ability to switch between Exchequer and Lottery funding Creating sporting opportunities in every community 12

13. Long Term Financial Forecasting Considerations Summarise The quality of financial forecasting can and should provide a level of assurance to grantee stakeholders. Financial forecasting should be closely linked to expected delivery performance. Financial forecasts should be capable of independent scrutiny. The points raised should be used to influence thinking on how to develop your future financial forecasts. Creating sporting opportunities in every community 13

14. Questions ?? Creating sporting opportunities in every community 14