Appendix 2: Our principles and expectations for administering grants
Department of Internal Affairs: Administration of two grant schemes.
Our 2008 good practice guide, Public sector purchases, grants, and gifts: Managing funding arrangements with external parties, sets out the principles that we expect public entities to apply when spending public money.
Those principles are:
- Accountability – Public entities should be accountable for their performance and be able to give complete and accurate accounts of how they have used public funds, including funds passed on to others for particular purposes. They should also have suitable governance and management arrangements to oversee funding arrangements.
- Openness – Public entities should be transparent in their administration of funds, both to support accountability and to promote clarity and shared understanding of respective roles and obligations between entities and any external parties entering into funding arrangements.
- Value for money – Public entities should use resources effectively, economically, and without waste, with due regard for the total costs and benefits of an arrangement, and its contribution to the outcomes the entity is trying to achieve. Where practical, this may involve considering the costs of alternative supply arrangements.
- Lawfulness – Public entities must act within the law, and meet their legal obligations.
- Fairness – Public entities have a general public law obligation to act fairly and reasonably. Public entities must be, and must be seen to be, impartial in their decision-making. Public entities may also at times need to consider the imbalance of power in some funding arrangements, and whether it is significant enough to require a different approach to the way they conduct the relationship.
- Integrity – Anyone who is managing public resources must do so with the utmost integrity. The standards applying to public servants and other public employees are clear, and public entities need to make clear when funding other organisations that they expect similar standards from them.
Page 34 of our 2008 good practice guide also set out our expectations for administering grants. Those expectations are set out in the table below.
| Conditional grant | Grant with limited conditions | |
|---|---|---|
| Planning stage | Process to check that purpose aligns with entity's business or functions. Organisational policy and business planning to develop systems and criteria for considering applications or requests. |
Process to check that purpose aligns with entity's business or functions. Organisational policy and business planning to develop systems and criteria for considering applications or requests. |
| Selection stage | Systematic process for considering applications or requests against criteria. Specific assessment of the basis for the amount of the grant sought. Clear documentation of terms of the grant and what is being funded. Clear and appropriate conditions set to manage risk and ensure suitable accountability. |
Systematic process for considering applications or requests against criteria. Specific assessment of the basis for the amount of the grant sought. Clear documentation of terms of the grant and what is being funded. Some clear and appropriate conditions set to manage risk and ensure suitable accountability. |
| Monitoring stage | Regular reporting or other checks (at an appropriate level) to assess progress and whether further funds should be released, to enable funder to assess success. Payment may be in advance of delivery/performance but could be in stages to manage risk. |
Payment may be in advance of delivery/performance but could be in stages to manage risk. Possibly some ongoing reporting or monitoring arrangements, depending on risk, scale, and nature of the relationship, to enable funder to assess success. |
| Review stage | Full reporting of achievements against the purpose of the grant. | Some reporting of achievements against the purpose of the grant. |