Advice for Completing Application Form
Preparing your accounts
Increasing accountability and confidence: Having someone independent look over your accounts.
For organisations applying to our Scotland-wide programmes, we require you to demonstrate that your annual accounts are subject to some form of independent inspection.
We believe that the requirement to have someone independent look over your accounts promotes good practice amongst community groups – promoting transparency and confidence in local organisations and thereby building stronger communities.
What does the Foundation Scotland mean by an independent inspection?
By inspection, we mean that your accounts and financial records have been looked at by a suitably competent person. The purpose of the inspection is to check that your accounts are consistent with the financial records of your organisation. The person carrying out the inspection should provide your organisation with a brief statement confirming that this is the case.
By independent, we mean that the accounts of your organisation have been inspected by someone with no connection to the management committee of the organisation that would inhibit their ability to undertake an objective and impartial inspection. This means that the person undertaking the inspection should not be:
- A member of the management committee or anyone else closely involved in the administration of the organisation,
- a major donor or beneficiary of the organisation,
- a close relative, spouse, partner, business partner or employee of any of the above.
We will ask you to provide details of the independent person who has inspected your most recent accounts on the application form that you complete when applying for a grant.
By competent, we mean that the person conducting the inspection should be sufficiently familiar with financial record keeping of a similar level of complexity. We envisage that, for smaller organisations, a competent individual may be someone such as:
- The treasurer of another group
- a bank manager or accountant, or someone retired from those professions
- a community support worker
- an individual with appropriate experience of financial record keeping
Please note that for larger unincorporated organisations without charitable status and with an annual income of £100,000 or more, we would expect a higher degree of external scrutiny to be applied to the accounts e.g. at least an independent examination by a suitably qualified professional person, such as an accountant.
How will organisations be able to demonstrate that they have complied with the new policy?
- The accounts submitted with the application must be signed by an independent competent person, with a brief statement from the person undertaking the inspection, confirming that they have inspected the accounts and found them to be consistent with the financial records of the organisation.
- details of the independent person will also need to be given on the application form used when applying for the grant.
- for new organisations that have not yet produced a set of annual accounts:
- we will require you to sign up to the terms and conditions of any grant award stating that any accounts produced by the organisation in the future will be independently inspected.
- once we’ve awarded a grant, we will not accept any further applications for funding from the organisation unless they provide us with a set of accounts that have been independently inspected.
What does the Foundation Scotland expect a statement of independent inspection to look like?
The accounts should be signed by the person carrying out the inspection with a brief statement stating that they have found them to be accurate. Or a signed statement should be attached to the accounts.
A model statement is available for download
Registered Charities (including SCIOs), Companies and Community Interest Companies (CICs) will already be required to subject their accounts to some degree of independent scrutiny. Advice for these organisations can be found on the websites of their regulators as follows:
Additional support and advice for all organisations may be available from your local Third Sector Interface. To find details of your local Interface, visit www.voluntaryactionscotland.org.uk/find_an_interface.asp