Governance and Accreditation of Finance Systems

Information Session (c)

Governance and Accreditation of Finance Systems

1. Kite marking of standards and systems – it was felt that this has a degree of positive benefit for organisations in the sector but we need to ensure that government will relate all organisations, not just those who achieve these kite marks as this could have an adverse effect, in particular, for new groups.
2. Risk Assessment – Seamus Murray explained in some detail how the risk assessment scheme works. It was agreed that as a principle and approach it would be good to roll this out across all departments. In its work to date, VCU has allocated a low risk to most organisations it has checked ie approximately 80% of 250. Internal audit at VCU has agreed this approach and therefore does not get involved in the actual individual assessment. Another organisation present explained that although it uses a similar approach, most of its grantees receive high and medium risk allocation, even for groups who received low risk status in terms of full cost vouching. In this instance their auditors are directly involved.
3. It was also agreed that the monitoring visits carried out by government staff would be beneficial in helping to educate relevant staff about the sector and the work it does.
4. Accreditation system – the sector needs to consider this and how it should be taken forward and what format it should take. It was agreed that there should only be one recognisable system of accreditation to avoid confusion.
5. SORP – it is anticipated that some of the principles which underpin SORP will be introduced as a requirement or recommended best practice in Northern Ireland. However we need to safeguard smaller organisations and ensure that the ideas and principles of SORP are introduced in a proportionate way.
6. Funding database – this should hold all relevant information including risk assessment ratings with degrees of accessibility to all government departments, the general public and individual groups. The database is to go live at the end of June 2005. The same database will be used by all government departments, agencies and NDPBs in the future.
7. Lead funder – this is not a new approach as departments are currently expected to carry out work including monitoring of grants in an efficient way, therefore if several government grants are given to one group, one department should lead on the financial monitoring. It was agreed that this should be available to groups who receive a cocktail of funding and also to specific projects funded by a range of funders. This will be appropriate only post letter of offer. There was general agreement that this would be an excellent approach for the sector, however we need to be mindful that individual funders will still be responsible for their own outcome monitoring.
8. Governance – Paula Reynolds presented the following definition of governance.
9. “(It) is the process by which a governing body ensures that an organisation is effectively and properly run…governance is not necessarily about doing; it is about ensuring things are done” The definition was agreed by the group. Includes the structures and processes needed to ensure the organisation: (a) is aware of and continues to work to its overall mission, vision, values (b) has a strategic direction and sets priorities (c) uses resources properly (d) abides by all relevant regulations and laws (e) abides by its governing document (f) has the right balance of skills and expertise at board level (g) recruit and supervise the CEO (h) has correct financial systems (i) staff and volunteers carrying out organisation’s services to agreed standards (j) is accountable to its stakeholders (k) has good relationships internally and externally (l) has clarity in its decision making processes between the management (m) committee and the CEO (n) ensures the operational activity is well planned and delivered (o) has a risk management policy (p) has an working knowledge and understanding of its governing document.
10. It was agreed that, due to funders’ requirements, most groups had good governance structures in place. Although quite a few organisations were delivering training, advice and support in relation to the above, much more needs to be done. Groups are more comfortable approaching a local network or sector body such as NICVA before going to funders with any governance issues they may have.
11. Governance Manuals – the workshop was informed about government, VDA and NICVA best practice manuals on finance and governance. The government manual is to be available from the end of June 2005 and covers information on issues including planning, audits, finance, fraud and evaluation and monitoring. It includes checklists to aid groups in their internal assessment and signposting to sources of further assistance. Importantly, it provides information on what government would wish to find in well managed groups and will be used internally by government as best practice. It is anticipated that this will start to shape the accreditation system. The VDA manual is almost complete and is a more step by step handbook to assist groups with governance. It will go online and will be found at www.communityni.org
12. Governance Hub – the workshop was informed about the introduction of a Governance Hub in England and agreed that it would be a good idea for Northern Ireland. It would bring together the key practitioners and deliverers of governance here including the sectoral and thematic networks. Its role would include the promotion of trusteeship, sharing of information on current delivery, identification of gaps in delivery, signposting and a discussion board for relevant issues such as accreditation.
13. The issue of partnerships and the role and responsibilities of statutory representatives was raised alongside the need for clarification on the proposed new legal structures for the sector ie CIOs and CICs. NICVA to initiate work on the former issue.