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Investigation into the matching of funds from the Grassroots Grants Programme with donations from The W O Street Charitable Foundation

The National Audit Office has published the findings from its investigation into whether £1.3 million of donations from a charity, The W O Street Charitable Foundation (the Foundation) were eligible to be matched with funds from the Cabinet Office’s Grassroots Endowment Match Challenge Fund (the Challenge Fund), which was part of the Grassroots Grants Programme.

The Grassroots Grants Programme ran from 2008 to 2011. The Cabinet Office was the programme’s overall sponsor and appointed the Community Development Foundation (CDF) to run the programme, including the Challenge Fund, on its behalf. CDF in turn appointed local funders to administer the programme locally including securing donations and submitting claims for match funding.

The key findings of the investigation are as follows:

  • The NAO cannot see a justification for the decision by local funders to classify the Foundation as ‘ineffective’ in a way that complies with the guidance, which was the basis on which they claimed the donations were eligible for matching under the terms of the Challenge Fund. We have not been able to determine the exact amount of public funding received by the local funders in relation to the donations, but we estimate it to be around £753,000 of public funds across the three local funders.
  • In both 2012 and 2015, the Cabinet Office reviewed the eligibility of the Foundation’s donations and concluded each time that the donations were eligible for matching. It accepts, however, that there were weaknesses in the Challenge Fund’s design.
  • While the NAO did not set out to review the overall effectiveness of the Challenge Fund, today’s report identifies flaws in the design of this historic scheme and gaps in the Cabinet Office and CDF’s oversight. These included a lack of clarity in the guidance for local funders, insufficient checks on the eligibility of donations to attract match funding and poor record-keeping.

The Cabinet Office has introduced measures to strengthen its oversight of subsequent schemes. It told the NAO that it intends to review and improve its grant making and record keeping. It also intends to work with the local funders involved to ensure that endowment funds are managed appropriately.

July 21 2015

Notes for Editors

1. This report is a National Audit Office Investigation. The NAO conducts investigations to establish the underlying facts in circumstances where concerns have been raised with us, or in response to intelligence that we have gathered through our wider work.

2. This issue was raised by David Nuttall MP (Bury North) who wrote to the then Chair of the Committee of Public Accounts in October 2013 with his concerns over this matter.

3. The Challenge Fund was set up, in part to release funds held by trusts which were not being put to good use. Donations from ‘ineffective’ trusts could be matched by the Fund if the local funder could demonstrate this was a significantly better use of the donor’s resources and would lead to better long-term benefits for local groups. The Challenge Fund guidance described an ineffective trust as one that was not doing what it should be doing, for example not giving out grants or not investing appropriately.

4. The Foundation is a grant-making charity established by the late William Openshaw Street. It makes grants to national, regional and local charities, and Mr Street had a particular interest in education, general welfare (particularly the elderly, the blind and the disabled), and family and social welfare.

5. Up to the end of March 2011, the Community Development Foundation was a non-departmental public body appointed to deliver this programme on behalf of the Cabinet Office. It became an independent charity from 1 April 2011.

6. Press notices and reports are available from the date of publication on the NAO website, which is at nao.org.uk. Hard copies can be obtained by using the relevant links on our website.

7. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.

PN: 49/15