Money that may only be used one way.
WHAT RESTRICTION MEANS
The funder specified what it may be spent on.
WHY IT MATTERS LEGALLY
Spending it otherwise is a breach, and may require repayment.
WHAT TO ESTABLISH FOR EACH GRANT
What is covered Over what period What variation is permitted Who must approve changes
WHAT TO SET UP
Separate tracking for each restricted fund.
WHY SEPARATE
You must be able to demonstrate how each was spent.
WHAT TO RECORD AGAINST EACH
Income received Expenditure, itemised The balance remaining
WHAT TO AVOID
Mixing restricted funds in a single undifferentiated account with no tracking.
WHY
It becomes impossible to report, and it looks like misuse.
WHAT TO DO WHEN PLANS CHANGE
Request variation, in writing, before spending differently.
WHY BEFORE
Retrospective approval is frequently refused.
WHAT TO DO ABOUT UNDERSPEND
Establish whether it may be carried over or must be returned.
WHAT TO DO ABOUT OVERSPEND
Establish who bears it.
WHY
It is usually you.
WHAT TO ALLOCATE HONESTLY
Shared costs, on a defensible basis.
WHAT A DEFENSIBLE BASIS LOOKS LIKE
Staff time recorded Floor area Beneficiary numbers
WHAT TO DOCUMENT
The allocation method, and apply it consistently.
WHAT AUDITORS EXAMINE
Exactly this.
