Establish monitoring and evaluation scheme
Determine the degree of competition for funding
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Determine the duration of the award
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Build in full cost recovery
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Determine payment formula
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Establish application process
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Establish monitoring and evaluation scheme
Monitoring
Monitoring is about collecting information and
assessing it. If a government organisation (‘funder’) has a
financial agreement with an external organisation (‘provider’), the
funder must monitor the provider to ensure regularity, propriety
and value for money. Monitoring, both internally for providers and
externally for funders is an element of good management practice.
But monitoring can be excessive. Seeking to promote good practice
in monitoring, the Government and National Audit Office have
said:
Funding bodies should seek to minimise
the monitoring and inspection burden on the recipients of funds to
a level proportionate to the level of funding and risk, and which
maintains proper control of public monies. [Footnote 1]
The Government has expanded on this in its
principles of
proportionate monitoring. The term we use for putting into
practice the principles of good monitoring, and for avoiding the
pitfalls of poor practice in monitoring, is ‘intelligent
monitoring’. We have developed further
guidance on how to intelligently monitor your financial
relationships with third sector organisations.
Follow good practice around proportionality
and risk management in both monitoring and evaluation. Seek to
minimise the burden on providers, while maintaining proper control
of use of public money. However, do not lead a provider to believe
that it will never be monitored.
Understand the cost of the
monitoring and evaluation schemes that you agree with providers.
Under full cost recovery, you should finance the provider for the
portion of these costs that fall to it [see Build in full cost recovery].
Although establishing a monitoring and
evaluation scheme is shown as the final decision in designing the
funding model, it is never too early to begin to think about
it. You may need to consult potential providers at this
point. Establishing monitoring and evaluation should never be left
until implementation [Stage
4].
Evaluation
Evaluation is the assessment of the extent to
which the programme has met its objectives. This will help you and
others improve the design and operation of the programme and design
new programmes. As with monitoring, evaluation needs to be
‘intelligent’.
There are two sorts of evaluation:
- Summative evaluation makes
the assessment after the programme has been in operation for some
time or is completed; the length of time can be derived from the
timescale element of the objectives of the programme
- Formative evaluation
assesses the programme as it is being put in place and during its
early operation.
You must:
- Design the evaluation scheme for your
programme at its outset; otherwise you will find
it hard to establish the effect it has had
- Embed the evaluation scheme
into your agreement/s with providers
- Integrate, as far as
possible, the demand for, and the collection of, information under
the evaluation scheme with those that arise from
monitoring requirements.
Fraud and counter-fraud
Funding relationships with any outside
organisation are potentially open to abuse by fraudsters. You
should consider the potential impact of fraud on your funding
programme and address the following aspects as necessary:
- Information should be
provided to applicants on the organisation’s policy on fraudulent
claims, for example by specific references in grant application
information
- Where intermediaries exist,
their briefing and contracts need to contain appropriate provisions
for dealing with fraud so that all parties are aware of their roles
and responsibilities for the prevention, detection and reporting of
fraud
- Grant schemes should be
specifically fraud-proofed, particularly against the risks of
multiple applications either to one organisation or to a number of
different funders
- Counter-fraud measures
should not only cover the higher risk grants but should also ensure
that all grants have a chance of detailed review, although the
extent of coverage of lower risk grants should be less
- Where third parties are
involved in the award or payment of grants, organisations should
overtly assess the third party’s counter-fraud measures.
Your organisation’s internal audit team and
other functions such as a fraud investigation team have a key role
in providing advice on counter-fraud measures.
Notes
1. [back from footnote 1] HM Treasury’s
‘Guidance
to Funders’ provides further detail on the needs of
auditors.