A | C | D| E | F | G | I | M | P | R | S | T | U | V | W
Accountability - Means by which individuals and organisations report their actions and are answerable to others for what they have done.
Advance payment - Payment made before the provider has incurred the expenditure and before the product or service – or an agreed part of it – has been delivered.
Appropriation - Parliament’s allocation of money to a programme, which may be a specific or general allocation.
Arrears payment - Payment made after the provider has incurred the expenditure and after the product or service – or an agreed part of it – has been delivered.
Capacity building - In this case, a resourced approach (typically through staff training and development) boosting the sector’s ability to manage projects, deliver services or engage in consultation and policy processes, partnerships and social enterprise by ensuring that voluntary and community organisations have the skills, knowledge, structures and resources to realise their potential.
Channel - Three types of funding channel – grant, grant-in-aid or procurement – that are available to public bodies in funding TSOs. See Annex D.
Charitable incorporated organisation (CIO) - A new legal form of organisation which is expected to be introduced by the forthcoming Charities Act 2006. CIOs will be registered charities and regulated by the Charities Commission. CIOs will have corporate status and the benefits of limited liability. It is likely that once the CIO form becomes available, many existing charities will convert to this form.
Clawback - The concept that where an asset financed by public money is sold, all or part of the proceeds of the sale should be returned to the funder.
Community benefit society (CBS) - Community benefit societies were formally known as charitable industrial and provident societies (see IPS definition below).
Compact - The voluntary and community sector’s written agreement with the government (or local public bodies) which has undertakings on both sides, shared principles and values such as recognising the sector’s independence, and mechanisms for making it work.
Contract - Legally binding agreements between (in this case) a government body and a TSO to provide services on behalf of the public body. A contract will specify the services to be provided and what the contractor is to be paid for providing them. It will also include provisions, in greater or lesser detail, setting out the legal obligations which each of the parties accepts in order to fulfil the purposes of the contract.
Development funding - Investing in new organisations or new capacity in existing organisations to develop their ability to contribute to a funder’s policy objectives.
Evaluation - The assessment of the extent to which the programme has met its objectives: that is, has been effective, economical and efficient. There are two sorts of evaluation: summative and formative. Summative evaluation makes the assessment after the programme has been in operation for some time, or is complete, while formative evaluation assesses the programme as it is being put in place and during its early operation.
Full cost recovery (FCR) - Full costs are the direct costs of your project or service plus a relevant portion of organisational overheads (central administrative costs). FCR is the process of costing activities to include the appropriate share of overhead or indirect costs, as well as the direct costs of delivering a service.
Funding model - See ‘model’ definition below.
Funding stream - A sum of money allocated by government for a defined purpose.
Grant - Payments to outside bodies should be made in the form of grants where a department is required, or wishes, to maintain detailed control over the expenditure and where a procurement approach is not suitable. For more detail see Sub-stage 2(b): Choosing a funding channel.
Grant-in-aid - A payment by a government department (normally referred to as the “sponsor department”) to finance all or part of the costs of the body in receipt of the grant in aid. Grant in aid is paid where the government has decided, subject to Parliamentary controls, that the recipient body should operate at arm's length. The sponsor department does not therefore seek to impose the same detailed controls over day-to-day expenditure as it would over a grant.
Infrastructure - Physical facilities, structures, systems, relationships, people, knowledge and skills that support, develop, co-ordinate, represent and promote front-line organisations to enable them to deliver their missions more effectively.
Industrial and provident society (IPS) - An organisational form sometimes used by TSOs; charitable IPSs are usually known as community benefit societies. A charitable IPS is an incorporated body with limited liability, governed by the Industrial and Provident Societies Acts. Charitable IPSs are exempt from registration with the Charity Commission, but the forthcoming Charities Act 2006 is expected to remove this exemption.
MMatch funding - A requirement by funding agencies that any contributions they make towards programme or project costs should be matched by other funders, or by the applicants from their own resources.
Milestone - A point at which you can measure progress on the way to achieving a goal or objective.
Mode - A term used in this tool to refer to three broad types of objective that a policy programme may have: financing a service or project; development funding or strategic funding. See Stage 2, sub-section ‘Choose a funding channel’.
Model - The form that the funding programme takes when implemented in practice, once the questions raised in this tool have been answered. Annex E gives examples of various funding models.
Monitoring - In this case, the ongoing collection of information about the programme and assessment of the implications. Such information may be needed for three purposes: effective management of the programme; wider accountability for the programme; and policy development. For more detail see Sub-stage 3(e): Establish monitoring and evaluation.
Objective - Something you need to achieve in order to meet your goal. To be effective, objectives should ALWAYS be written so that they are SMART (Specific, Measurable, Achievable/Agreed, Relevant and Time-bound).
Outcome - The term used to describe the totality of what a programme or project is set up to deliver or achieve.
Output - The end result of carrying out an activity – usually a product. It is important to distinguish what has been produced (the output) from the effect that it may be designed to help achieve (the outcome).
Payment formula - A financial model must include the appropriate mix of bases and timings – this is called the payment formula. The payment formula must follow from the objectives of the programme, and the agreed approach to risk management. In addition, five criteria must be met – see Sub-stage 3(d): Determine payment formula.
Procurement - Acquisition of goods and services from third party suppliers under legally binding contractual terms. Such acquisitions are for the direct benefit of the contracting authority, necessary for the delivery of the services it provides or the running of its own business. Procurement is normally achieved through competition, and will be conducted in line with the government’s policy of value for money and in line with the Public Contracts Regulations 2006.
Programme - A portfolio of projects selected, planned and managed in a co-ordinated way.
Project - A temporary organisation formed to produce a unique and pre-defined outcome, or result, to a pre-specified timescale, using predetermined resources. It is important to understand that a project is something that can be planned and is something with a specific end in sight and which is managed to deliver as a single coherent whole.
Proportionality - The principle of not burdening funded organisations out of proportion to the amount of funding, which applies especially to monitoring. Guidance states that monitoring arrangements etc. should be proportionate to the level of, and risk to, the amount of funds involved.
Propriety - Linked to regularity, it is the further requirement that funds must be handled in accordance with Parliament’s intentions and Parliamentary control.
Regularity - Linked to propriety, it is the requirement for funds to be dealt with in accordance with the legislation authorising them, any applicable delegated authority and the rules of Government Accounting.
Restricted funds - These are funds which must be spent on a specific purpose within a specified time. If this type of fund is not spent within the specified time or for the specified purpose, it may have to be returned to the funder.
Ring-fencing - placing restrictions on a funding stream such that it can only be used for defined purposes
Risk - Uncertainty of outcome (whether positive opportunity or negative threat). It is the combination of the chance of an event and its consequences.
Risk meeting/s - The meeting held before a project begins, to identify and describe each of the relevant risks, in terms of likelihood and impact, and who is best placed to manage each one.
Risk register - A document used to record the risks facing a project or programme, usually produced as a table. It should, as a minimum, record a description of each risk, an assessment of its likelihood and impact and the management actions to be taken to minimise the risk, though it can be more sophisticated.
Senior responsible owner (SRO) - The single individual with overall responsibility for ensuring that a project or programme meets its objectives and delivers the projected benefits.
Service/project funding - Paying for a particular service (ongoing) or project (time limited).
Service level agreement - A memorandum, often accompanying a grant, which sets out the understandings of the public body and the TSO about the service to be provided.
SMEs - Small and medium-sized enterprises, a term used to refer to smaller private sector companies.
Spending review - A statement of the government’s spending plans for a particular period.
State aid - EU law on state aid aims to prevent member states from unfairly
distorting competition within the EU, except in certain permitted
circumstances. A state aid exists if all of the following four
criteria apply to the proposed programme:
It is granted by the state or through state resources
It favours certain undertakings or the production of certain goods
It distorts or threatens to distort competition
It has the potential to affect trade within the EU
For more detail on state aid, please see Sub-stage 2(a):
Establish specific purpose and Annex C:
Note on state aid.
Statutory bodies - Organisations created by Acts of Parliament which define their powers and duties.
Strategic funding - Financing for organisations recognised to be of strategic importance in that they facilitate the achievement of other, more specific government objectives.
Stream / funding stream - A sum of public money which has been allocated for the achievement of a particular objective or the implementation of a particular policy programme.
Target - Something you are aiming for – usually the numerically measurable part of an objective.
Third sector organisation (TSO) - TSOs pursue social and environmental objectives; do not distribute any surpluses to shareholders; reinvest any surpluses in the pursuit of their objectives; and are independent of government. TSOs can take a number of organisational forms, with or without charitable status – see Annex A.
Unrestricted funds - Funds held for the general purposes of an organisation, with no specific restriction on the purpose to which they are applied.
Value for money (VfM) - The optimum combination of whole-life cost and quality (or fitness for purpose) to meet the user’s requirement. Assessed by the National Audit Office using the criteria of economy, efficiency and effectiveness.
Vires - The power in legislation for the funder to carry out the activity envisaged in the policy intent for a programme. This may be a power that is specific to the programme; or it may be a more general power that may be used to fund a range of programmes, including the one at hand.
Voluntary and community organisation (VCO) - A general term used to refer to registered charities, non-charitable non-profit organisations, associations, self-help groups and community groups.
Whole life cost - The full cost to an organisation of a solution to a requirement over the full period that the requirement will exist. Whole life costs will take into account running costs such as energy usage, maintenance requirements, staff training needs, and disposal costs such as recycling, as well as the initial purchase price. The life span of the product will also need to be considered.