CHARITABLE FUNDS CODE OF PROCEDURES
Version
9
Name of responsible (ratifying) committee
Charitable Funds Committee
Date ratified
11th July 2013
Document Manager (job title)
Charitable Funds Accountant
Date issued
2nd October 2013
Review date
July 2014
Electronic location
Corporate Policies
Related Procedural Documents
Charitable Funds Staff Meals & Functions
Policy
Key Words (to aid with searching)
Donations, Legacies, Charitable Expenditure
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-1-
CONTENTS
QUICK REFERENCE GUIDE .............................................................................................. 3
1.0 INTRODUCTION ........................................................................................................... 4
2.0 PURPOSE ..................................................................................................................... 4
3.0 SCOPE .......................................................................................................................... 4
4.0 DEFINITIONS ................................................................................................................ 6
5.0 DUTIES AND RESPONSIBILITIES ................................................................................ 6
6.0 PROCESS ..................................................................................................................... 8
7.0 TRAINING.................................................................................................................... 26
8.0 REFERENCES AND ASSOCIATED DOCUMENTATION ............................................ 26
9.0 EQUALITY IMPACT STATEMENT .............................................................................. 27
10.0 MONITORING COMPLIANCE WITH, AND THE EFFECTIVENESS OF,
PROCEDURAL DOCUMENTS .......................................................................................... 27
APPENDIX A – Contact points ........................................................................................... 28
APPENDIX B – Details of Structure and Registration of Funds.......................................... 29
APPENDIX C – Internal Governing Document ................................................................... 30
APPENDIX D – Authorisation of Charitable Expenditure .................................................... 31
APPENDIX E – Charitable Fund Financial Codes .............................................................. 32
APPENDIX F – Example of a Receipt for a Charitable Donation........................................ 33
APPENDIX G (i) – Flow chart of Receipt of Donation via Ward/Department ...................... 33
APPENDIX G (ii) – Flow chart of Receipt of Donation via Cashiers ................................... 34
APPENDIX H (i) – Ward/Department Donation Register.................................................... 35
APPENDIX H (ii) – Example of a completed Donation Register ......................................... 36
APPENDIX I – Cashiers Donation Register ....................................................................... 37
APPENDIX J – Application for Charitable Fund Expenditure in excess of £5,000 .............. 38
APPENDIX K (i) – Fund-raising Authorisation Request Form ............................................ 39
APPENDIX K (ii) – Explanatory Notes to Appendix K (i) .................................................... 40
APPENDIX L – Investment of Charitable Fund Policy ........................................................ 41
APPENDIX M – Application for the creation of a new charitable fund ................................ 43
APPENDIX N – Charitable Funds Committee Terms of Reference .................................... 44
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-2-
QUICK REFERENCE GUIDE
This policy must be followed in full when developing or reviewing and amending Trust
procedural documents.
For quick reference the guide below is a summary of actions required. This does not negate
the need for the document author and others involved in the process to be aware of and
follow the detail of this policy.
1. Only charitable donations must be paid into the charitable funds and a Receipt for a
Charitable Donation must be supplied to the donor.
2. Only the Director of Finance is authorised to deal with legacies received by the Trust.
3. There are restrictions on what constitutes charitable expenditure. There are various
authorisations required depending on the level of the proposed spend.
4. All fund managers are required to submit an annual spending plan for review by the
Charitable Funds Committee.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-3-
1.0 INTRODUCTION
This Code of Procedures reflects charity law and guidance issued to NHS bodies by the
Charity Commissioners for England & Wales. The issue by the Charity Commissioners of the
“NHS Charitable Funds Guide” sets out in some detail the legal requirements and best
practice to be followed by NHS bodies.
All activities conducted by our Charities must comply with charity law and the Statement of
Recommended Practice, issued by the Charity Commission.
This Code of Procedures replaces or, where appropriate, incorporates all previously issued
Procedures relating to the Charitable Funds of the Trust. They will be continually monitored
and updated as and when necessary. These Procedures should be read in conjunction with
the Trust’s Standing Financial Instructions, which are available on the intranet.
Authorising Officers are required to ensure they familiarise themselves with the procedures
and comply with them at all times. They must also ensure staff who deal with the day to day
running of the funds are aware of the requirements contained within the procedures.
It is essential that these Procedures are followed and if any member of staff is in doubt about
any matter relating to the receipt, ordering or payment of any item relating to Charitable
Funds, then they should contact the Charitable Funds Accountant or other officers listed in
Appendix A of this document.
2.0 PURPOSE
To provide clear guidance to staff when dealing with charitable funds, especially procedures
around income and expenditure.
3.0 SCOPE
The Charity Commission
The Charity Commissioners for England & Wales is the organisation responsible for
overseeing all charitable organisations. Under the Charities Act, the Commission is required
to :a)
b)
c)
d)
e)
Keep a register of charities
Promote the effective use of charitable resources
Give charity trustees information or advice
Change trustees of a charity where necessary
Investigate and check abuse
The Commission does not have power to administer charities and will not normally interfere
with the trustee’s exercise of their discretion.
NHS Charities are within the jurisdiction of the Commission and are regulated by them.
All NHS Charities have to be registered with the Commission. The details of Portsmouth
Hospitals NHS Trust (PHT) registration are included in Appendix B.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-4-
The Trust is also obliged in addition to registration to set out a governing document, which
details each charity’s purpose(s). (Appendix C)
Charitable Purpose
Health Service bodies are not themselves charities, only the funds and property they hold on
trust for exclusively charitable purposes constitute charities.
For a fund to be a charity it must have purposes which according to the law in England &
Wales are exclusively charitable. Four main criteria are accepted :a)
b)
c)
d)
The relief of those in need, by reason of ill health or disability
The advancement of education
The advancement of religion
Other purposes beneficial to the community not falling in a), b) or c)
The Portsmouth Hospitals Charity is not set up for the relief of financial need.
Charities administered by Health bodies fall into category a) the relief of those in need, by
reason of ill health or disability.
A purpose is not charitable unless it is for the public benefit. It must be of actual benefit, and
must benefit the public as a whole or a sufficient section of the public. A purpose is not
charitable if it is wholly or mainly for the benefit of specific individuals.
The Charity Commission allows expenditure on staff where it clearly enhances patient care.
Advancement of education - this is a charitable purpose where it enhances staffs knowledge
above and beyond that which is required to carry out their duties. It includes funds for
charitable medical research and the professional development of staff. If medical research is
being financed by a charitable fund, the useful results of the research must be published so
that the public will benefit.
Hospital staff welfare and amenity funds - these are charitable only because their immediate
non-charitable purpose of providing benefits to the employees of the Trust, is perceived as
being conducive to the furtherance of the charitable purposes of the Trust i.e. relieving
people who are ill. The benefits must not go beyond what a good employer would consider
reasonable to provide for its staff. The Charity Commission does not give specific guidance
regarding what is reasonable.
More detailed guidance on charitable purposes is given in the NHS Charitable Funds Guide
to which members of staff should refer if necessary. A copy is held by the Charitable Funds
Accountant.
Structure, Registration and Objectives of funds
The Trust has registered with the Charity Commission, the “Portsmouth Hospitals NHS Trust
General Charitable Fund” as an NHS Umbrella Charity.
Within the Umbrella Charity, the Trust has registered individual Special Purpose Charities.
Each Charity may include several “internal” funds, which have been allocated to it. The
details of these Charities, including the objectives of each one, are shown in Appendix B.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-5-
The funds are a means of earmarking monies internally within the Trust for a specific
purpose and are not separately registered with the Charity Commission.
Each Charitable Fund must have written objectives, which state the purpose(s) for which the
fund is to be used and all payments from each fund must be in accordance with these. The
objectives for each Charitable Fund must be approved by the Charitable Funds Committee
and accord with the definition of charitable purposes (see above). Appendix C gives an
example of a Portsmouth Hospitals NHS Trust Charitable Fund “internal” governing
document.
Appendix E details the income and expenditure codes to be used for charitable funds.
Charitable Fund subjective codes and cost centres (which begin with 2248 - - or 2249 - -)
must not be used in connection with exchequer codes or cost centres.
‘In the event of an outbreak, flu pandemic or major incident, the Trust recognises that it may
not be possible to adhere to all aspects of this document. In such circumstances, staff should
take advice from their manager and all possible action must be taken to maintain ongoing
patient and staff safety’
4.0 DEFINITIONS
Corporate Trustee - If an NHS body holds charitable funds as sole corporate trustee the
board members of that body are jointly responsible for the management of those charitable
funds. Members of both the Trust Board and Charitable Funds Committee are not individual
trustees under charity law but act as agents on behalf of the corporate trustee.
Fund holders/managers - key staff in particular wards/departments/services who “advise”
the trustee on spending the charitable funds within those work units. They have delegated
authority to make spending decisions within defined spending limits.
Reserves - the resources the charity has or can make available to spend for any or all of the
charity's purposes once it has met its commitments and covered its other planned
expenditure.
5.0 DUTIES AND RESPONSIBILITIES
This policy complies with Charity law and the Trust’s Statement of Financial Instruments.
All members of staff who deal with charitable funds are responsible for following this policy
and must ensure they adhere to it.
The Charitable Funds Committee acting as Trustee’s for the charity are responsible for the
development, management and implementation of the policy, with the assistance of the
Charitable Funds Accountant and the Finance Team.
TRUSTEES – Role and function
Where an NHS body has exercised its powers to accept, hold or administer trust property or
funds for exclusively charitable purposes, they will be acting as charity trustees in respect of
that property or funds.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-6-
Portsmouth Hospitals NHS Trust (PHT) holds and administers charitable funds and does so
as a corporate body (known as the corporate trustee).
TRUSTEES - Duties and responsibilities
The Trust is the sole corporate trustee of the Charity and the individual persons who, from
time to time are responsible for the management of the corporate body, i.e. the Trust Board,
are not themselves trustees of the charity. The duties, responsibilities and liabilities of
trusteeship lie with the corporate body.
The corporate body must act through individuals to express its will, and therefore if the
corporate body commits a breach of duty as trustee, it will have done so as a result of a
breach by the directors or other officers of their duties towards the corporate body.
The Trust has wide statutory powers to delegate administration of its trusts to officers,
committees or sub committees. Where such powers are exercised the corporate body will
remain as sole trustee and will be accountable for actions taken on its behalf. The Trust
Board has delegated significant powers relating to Charitable Funds to the Charitable Funds
Committee.
The Charitable Funds Committee
This is a standing committee of the Trust, which oversees the Charitable Funds activity within
the organisation. It has powers to recommend changes in the way Charitable Funds are
invested and spent, and reviews the systems in operation.
Membership of the committee comprises two voting members (one non-executive director
and one executive director) and six non-voting members (two accountants, the company
secretary, the fund-raising co-ordinator and two divisional representatives). See Appendix O
for the Terms of Reference of the Committee.
Authorising Officers and the Charitable Funds Accountant
For each Charitable Fund within the Trust, day to day responsibility must be vested with at
least two members of Trust staff (Authorising Officers). These must be staff of a reasonable
level of responsibility. The Charity Commission allows delegation but only to the extent that
responsibility for exchequer budgets is delegated.
An up to date record of these members of staff must be held by the Charitable Funds
Accountant, who must be informed of required changes to fund signatories before a new
signatory starts authorising expenditure. This should include the names, designation and
sample signatures. The Charitable Funds Accountant simply verifies expenditure (see
section 6.17) and is NOT an Authorising Officer.
The Standing Financial Instructions (SFI’s) set out the rules which regulate the financial
arrangements within the Trust. The SFI’s apply equally to Charitable Funds and, therefore,
must be understood and applied by the Authorising Officers. In addition, members of staff
should apply normal ordering, receipting and payment for goods and services procedures to
charitable fund purchases.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-7-
6.0 PROCESS
6.1 SOURCES OF FUNDS – General
Charitable Funds must be kept separate from NHS Exchequer monies. Neither NHS
organisations nor Exchequer funds can make donations to Charitable Funds.
Monies must not be accepted for the personal benefit of any individual staff member. All
members of staff must account for donations and gifts in kind received. See section 6.7
“Non Cash Gifts”
Any donations or other income received is held in trust and must be paid promptly into
Charitable Fund bank accounts, via the Cashiers Office, Queen Alexandra Hospital.
6.2 SOURCES OF FUNDS - Donations
The receipt of any donation for Charitable Funds must be acknowledged to the donor
by way of a “Receipt for a Charitable Donation” (See Appendix F). These receipts are
individually numbered CONTROLLED STATIONERY. Cashiers keep a log showing
where receipts have been sent. Receipts should be kept in a safe place within
departments. Cashiers must be sent any spoiled receipts, as no further receipts can
be sent to a department until all the numbers previously sent have been accounted
for.
When a donation is received it is important to identify the area of benefit and to ensure that
any condition or direction attached is noted and is able to be complied with. Non-charitable
income, ie. payment for a good or service supplied by the Trust or one of its employees must
not be paid into the charitable funds. All donations are reviewed and income identified as
potentially non-charitable income will be queried with the department concerned. The income
will be transferred into the departmental exchequer budget/clinical trial budget if no details
are supplied upon request or the information provided shows that the income is not
charitable.
As far as possible, there must be an avoidance of the creation of new funds and where
possible, funds of a similar nature should be amalgamated. Requests for new funds will be
considered by the Charitable Funds Accountant but will not be set up for anticipated
donations of less than £10,000. It is also necessary to avoid establishing impossible,
undesirable or administratively difficult objectives from any donation received.
If members of staff require advice on any problems relating to donations given or offered
they should contact the Charitable Funds Accountant.
Donations may be received in a number of different ways and the following sections outline
the actions to be taken by members of staff in particular circumstances. See Appendix G i &
ii for flowcharts of the various procedures for dealing with donations.
Donations received by a Ward or Department (in person)
When a donation is handed in to a Ward or Department by the donor, a “Receipt for a
Charitable Donation” must be completed (see Appendix F).
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-8-
The “Receipt for a Charitable Donation” is sequentially numbered and is three parts, with the
TOP COPY going to the donor, the second copy to Cashiers, with the donation, and the
third copy being retained in the Ward or Department.
All boxes on the “Receipt for a Charitable Donation” MUST be completed. The area of
benefit must be included to the donor’s satisfaction. If there are any queries on completing
the “Receipt”, the Charitable Funds Accountant or the Cashiers Office should be contacted.
If payment is to be made by cheque, the donor should be advised to make the cheque
payable to “Portsmouth Hospitals NHS Trust Charitable Fund”.
Where payment is made by cash, the money must be counted and checked by two members
of staff, one of whom should be the member of staff in charge. Both members of staff must
sign the Receipt for a Charitable Donation so that in case of query it is clear who
received the donation.
On completion of the “Receipt for a Charitable Donation”, the TOP COPY must be given to
the donor.
The donation should then be recorded in the Donation Register held in the Ward or
Department (see Appendix H i & ii)
The donation, along with the second copy of the “Receipt” must be forwarded to Cashiers
within one working day.
Cashiers will issue an official receipt and send this to the Ward or Department concerned.
The official receipt should be attached to the Ward or Department’s copy of the “Receipt for
a Charitable Donation” and the Donation Register updated with the Cashiers receipt number.
It is expected that a personal letter of thanks be sent to the donor.
For ease of tracking donations received in memory of a patient, the patient’s name should be
written in the appropriate column of the Donation Register.
Donations received by a Ward or Department (Not in person i.e. by post)
When donations are received by a Ward or Department it is important :a)
to identify the area of benefit that the donation is intended for
b)
where there is any doubt about the area of benefit, to contact the Charitable Funds
Administrator
c)
that if cash is received, the amount is checked immediately by two members of staff
one of whom should be the member of staff in charge. Both members of staff must
sign the Receipt for a Charitable Donation so that in case of query it is clear who
received the donation.
A “Receipt for a Charitable Donation” must be completed (see Appendix F) and the donation
recorded in the Donation Register held in the Ward or Department (see Appendix H i ii)
The “Receipt for a Charitable Donation” is sequentially numbered and is three parts, with the
TOP COPY going to the donor, the second copy to Cashiers with the donation and the third
copy being retained in the Ward or Department.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
-9-
All boxes on the “Receipt for a Charitable Donation” MUST be completed.
The donation, along with the second copy of the “Receipt” must be forwarded to Cashiers,
within one working day.
Cashiers will issue an official receipt and send this to the Ward or Department concerned.
The official receipt should be attached to the Ward or Department’s copy of the “Receipt for
a Charitable Donation” and the Donation Register updated, with the Cashiers receipt number.
A personal letter of thanks must be sent to the donor, together with the donor’s copy
of the “Receipt for a Charitable Donation”.
For ease of tracking donations received in memory of a patient, the patient’s name should be
written in the appropriate column of the Donation Register.
Donations received by Cashiers directly (in person or via external mail)
When donations are received by Cashiers, a “Receipt for a Charitable Donation” must be
completed, and an official receipt must be issued, including the appropriate Financial
Account and Cost Centre code, together with a brief description of the area of benefit the
donation is intended for.
The official receipt, together with the top copy and third copy of the “Receipt for a Charitable
Donation” and the original supporting letter or other document(s) must be sent to the Ward or
Department concerned within one working day. A copy of the documentation and official
receipt must be retained by Cashiers in the normal way. The donation should then be
recorded in the Cashiers’ Donation Register (see Appendix J).
On receipt of the documents detailed above, by the Ward or Department, the donation must
be recorded in the Donation Register. The official receipt should be attached to the Ward or
Department’s copy of the “Receipt for a Charitable Donation”. A personal letter of thanks
must then be sent to the donor, with the TOP COPY of the “Receipt for a Charitable
Donation”.
Any query in respect of a donation received by Cashiers will be directed to the appropriate
Ward or Department.
6.3 SOURCES OF FUNDS - Other Forms of Donations
Donation Leaflet
Donations leaflets are available from the Head of Fundraising. The leaflets provide donors
with information on how to donate to Portsmouth Hospitals. The leaflet includes a section for
donors to complete a gift aid declaration where applicable.
Gift Aid
From 6 April 2000 substantial changes regarding donations given under the Gift Aid scheme
came into effect. If a donor is a tax payer it is now easier to reclaim tax on their donation, the
Trust merely needs to obtain a Gift Aid Declaration from the donor. The Charitable Funds
Administrator has these forms, one for the donor to sign if present and one to be sent to the
donor if their declaration is made verbally. The basic information needed is the donor’s full
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 10 -
postal address and the number of the Receipt for a Charitable Donation, the donor’s National
Insurance number is not required. The Gift Aid Declaration can relate to a specific donation
or to all donations made after the date of the declaration, provided the donor clearly informs
the Trust that further donations have been made. It is however vital that the donor
themselves sign the form otherwise the Trust will not be able to reclaim tax. If a donation is
from a couple it is important that both parties sign the declaration.
Deed of Covenant
From April 2000 the Deed of Covenant scheme was replaced by the Gift Aid scheme.
Payroll giving
Under the Payroll Giving scheme, employees can authorise their employer to deduct
charitable donations from their pay before calculating Pay As You Earn tax. This way, the
employee automatically gets tax relief at his or her top rate of tax.
From 6 April 2000, the £1,200 per year ceiling on the amount that an employee can give was
abolished. There is no limit on the amount that can be given under the scheme.
If any member of staff is interested in this method of giving they should contact the Payroll
department and a form can be supplied for completion.
Charity Aid Foundation (CAF) Voucher
If a CAF voucher is received, it should be sent to the Charitable Funds Accountant as the
voucher is not a cheque and cannot be paid into a bank account. The Charitable Funds
Accountant will process the voucher and arrange payment into the appropriate charitable
fund.
Just Giving
The Trust commissions a “Just giving” website (www.justgiving.com/rockyappeal and
www.justgiving.com/porthospcf ), which allows donors/fundraisers to make donations
over the internet. This is extremely useful for fundraisers who may receive donations from all
over the country or world. Details of the website are provided on the donations leaflet and the
Trusts external website.
6.4
Medical Report Income – NON-CHARITABLE INCOME
The income generated from signing medical reports, CANNOT be paid into the charitable
funds. If this work is undertaken in Trust time, the income must be paid into the departmental
revenue budget where the doctor is charged. If work is undertaken in the individual’s private
time, the fee, which is assessable income for tax and NI purposes, must be paid to the
doctor. If the doctor would like the net income to be paid into the charitable funds, this must
be actioned via a personal cheque (or cash) from them. Under no circumstances should a
cheque from a patient or insurance company be paid directly into a charitable fund.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 11 -
The following is the excerpt from the NHS Executive Funds held on trust guidance:
If staff wish to donate fees received to the charitable funds of the Trust, they may do so.
However, they are responsible for paying tax on these fees and would therefore only pay the
‘after tax’ amount to the charitable funds. Provided the charity receives the gift with the
correct documentation (eg Gift Aid Declaration) then it can reclaim the basic rate of tax on
the donation.
If fees are donated then the donor can restrict the donation to particular limited purposes.
However it will be up to the Trustees to decide whether to accept the donation and, if
accepted, how it is to be spent. Although the donation may be passed on to medical staff
who donated it to administer (eg because the specified purposes is in that person’s area of
responsibility) the decision on spending is the Trustee’s and not the donor’s.
If a donor were to provide a gift to a charity under a gift aid arrangement and then gain
personal benefit by the way in which that gift was used, this could invalidate the gift aid
arrangement.
Under current legislation, it is unwise for a charity to enter into an arrangement whereby a
third party (eg a patient) makes a payment directly to a charity for services provided by
another party (eg a member of staff). The payment is the taxable income of the service
provider and must be declared by them to the Inland Revenue.*
* Now HM Revenue and Customs
6.5 Staff approaching an outside organisation
A member of staff should not approach an outside organisation for financial/non-financial
support/sponsorship to undertake charitable activities without prior approval of the Trustees.
This approval may be gained by :a)
contacting the Fundraising Co-ordinator who will require detailed information
concerning the request for support
b)
The Fundraising Co-ordinator will satisfy himself as to the charitable nature of the
request, that it fits in with the charitable objectives of the individual fund concerned or
the overall charitable objectives of the Trust.
c)
The Fundraising Co-ordinator may refer the request to the Chief Executive if
appropriate.
d)
The Fundraising Co-ordinator will ensure that the request for approval is placed on the
next Charitable Funds Committee agenda, if appropriate.
6.6 Organisations approaching staff
A member of staff who is contacted by an outside organisation should refer the organisation
to the Trust Fundraising Co-ordinator, who is responsible for ensuring that:



the offer is of a charitable nature,
that it meets the charitable objectives of the individual fund and the overall Charity
that it does not impose any legal requirement on the Charitable Funds
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 12 -
The Trust Fundraising Co-ordinator will ensure that the request is placed on the next
available Charitable Funds Committee agenda, if appropriate.
6.7 Non-Cash Gifts
Small gifts of a personal nature e.g. boxes of chocolates, bouquet of flowers, where the
whole ward or department is to benefit need not necessarily be refused. However, gifts
given specifically to an individual for their sole use should be politely declined. Where
possible staff should encourage donors to stipulate that such gifts be given to a whole ward
or department. Gift Vouchers should always be politely declined.
Gifts may be offered to a ward to be used for instance, in a raffle. Where gifts exceeding £10
in value are received, the members of staff should inform the Charitable Funds Accountant in
order to record the gift.
Any ward/department wishing to hold a raffle should contact the Trust Fundraising Coordinator for advice.
All staff should ensure they follow the Trust’s policy relating to ‘Standards of Business
Conduct’ which are available on the intranet.
6.8 SOURCES OF FUNDS - Legacies and Bequests
A significant level of income to the Charitable Funds arises from legacies or bequests, where
a hospital or department is specified as a beneficiary in a Will.
If any member of staff is approached by, or receives correspondence from, a solicitor/the
Executors of a Will concerning a legacy they MUST refer the information to the Director of
Finance who will ensure the legacy/bequest is passed to the Charitable Funds Accountant to
administer and reclaim tax where applicable. Only the Director of Finance can extinguish
liability and discharge a legacy.
Appropriate records of all legacies received, together with information on potential legacies
must be kept by the Charitable Funds Accountant. The Charitable Fund Accountant will
provide advice in respect of the wording of Wills.
6.9 SOURCES OF FUNDS - Investment Income
The principal source of dividends and interest are those derived from the Charitable Funds
Investment Portfolio held with the Trust’s investment brokers.
The Director of Finance is responsible for the recovery of tax from the HM Revenue and
Customs Charities Division in appropriate cases where such interest is received net of tax.
Interest is also received from funds held in the Trust’s Charitable Funds Business Reserve
bank account.
Distribution of Investment Income to individual Charitable Funds is made annually at the end
of March, based on the average monthly balance of each fund over the past financial year.
Details of the Charitable Funds Investment Policy are included at section 6.33 of these
procedures.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 13 -
6.10 SOURCES OF FUNDS - Fund-raising
Fund-raising traditionally includes activities such as jumble sales, bazaars, fetes, lotteries,
raffles and special appeals.
Fund-raising for the general purposes of an existing Charity does not create a new charity
and fund-raising is not a charitable purpose in itself. It has to be carried out in support of
charitable purposes (see section 3 of these procedures for the definition of a charitable
purpose).
The Trust as Trustee to the Charitable Funds, is responsible for ensuring that:
a)
b)
c)
d)
fund-raising is properly carried out;
expenditure is properly validated ;
all funds raised are properly accounted for ;
they are not seen to be speculating with charitable funds and that the costs of fundraising are not excessive.
In order that the conditions set out above are achieved, the Trust has a Fundraising Team to
deal with all matters relating to fund-raising throughout the Trust. Any member of staff who
is proposing to carry out a fund-raising project must, in all instances, contact the
Fund-raising Team prior to any action being taken. A Fund-raising Authority Request
form needs to be completed and returned to the Fundraising Co-ordinator (see Appendix L i
& ii). See Appendix A for details of how to contact the Fundraising Co-ordinator.
For all fund-raising activities the Fundraising Team will need the following information:
a)
b)
c)
d)
e)
f)
name and designation of the fund-raiser
the name of the Ward/Department/Group or organisation
contact address, telephone/fax number
purposes, nature and period of the fund-raising
the estimated cost of the fund-raising activity
the amount expected to be raised
No commitment to fund-raising should be made until approval has been given by the Fundraising Co-ordinator.
Members of staff and other organisations who wish to fund-raise independently of the Trust
Charitable Funds must make clear to potential donors that they are doing so independently
and not on behalf of the Trust. Members of staff must comply with the conditions detailed
above.
More detailed information about the issues relating to fund-raising for charitable funds is
contained in the Charity Commission Guide number CC20. A copy of this Guide is kept by
the Charitable Funds Accountant.
The Fundraising Co-ordinator should be contacted for advice regarding the running of a raffle
in accordance with the Lotteries and Amusements Act 1976, as amended by the National
Lotteries Acts of 1993 and 2006.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 14 -
6.11 SOURCES OF FUNDS - Trading
Charity law does not permit charities to exercise a trade on a substantial or regular basis
simply for the purpose of raising funds. Trading is only allowed if it is undertaken in
pursuance of the principle charitable objectives of a charity, for example training and
education by a school run as a charitable foundation. The principal objective of the PHT
charity is the relief of those who are ill; therefore we are NOT permitted to trade.
The following will generally be regarded as the exercise of a trade:
a)
b)
c)
the provision of services for reward
the sale of goods which have been bought in
donated goods which have been altered or improved prior to sale
The straight forward sale of donated goods will not generally be regarded as the exercise of
trade.
Members of staff should therefore, seek advice from the Charitable Funds Accountant before
considering any form of Charitable Fund activity which could be regarded as trading.
The HM Revenue and Customs is the primary arbiter of what constitutes a “trade” for tax
purposes and the fact that all profits or surpluses are to be used for charitable purposes is
irrelevant. A tax liability arises if any surplus/profit results from the trade.
6.12 SOURCES OF FUNDS - Income from other NHS organisations
Where income is generated from non-charitable activity, this income must be credited to
the Exchequer funds of the Trust and NOT to Charitable Funds.
Income from other NHS Organisations will usually relate to Exchequer funds, as NHS
organisations are not able to make charitable donations.
If a member of staff is in any doubt about the source of such an item of income generated to
the Trust, they should contact their Finance Manager or the Charitable Funds Accountant for
clarification.
6.13 SOURCES OF FUNDS - Grants
Where members of staff are aware of any grants received from government and public
bodies which are attributable to Charitable Funds (i.e. for a charitable purpose) these grants
must be identified as charitable and not included in Exchequer funds of the Trust. The
Charitable Funds Annual Accounts must identify separately all such grants and it is therefore
essential that members of staff make this information available to the Charitable Funds
Accountant.
Grants that are received from non-public bodies for a charitable purpose are treated as
Charitable Fund donations, and therefore should be identified as such.
6.14 SOURCES OF FUNDS - Intangible Income
This occurs when a charity receives assistance in the form of donated facilities or beneficial
loan arrangements. This will only apply if the Charity would otherwise have to purchase the
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 15 -
donated facilities and the benefit is quantifiable and material, for example, the use of free
accommodation.
Members of staff should advise the Charitable Funds Accountant of any assistance given
that they are aware of, in order that this information can be recorded in the Charitable Funds
Annual Accounts.
6.15 SOURCES OF FUNDS - Gains on disposal of Intangible and Tangible Fixed
Assets
The Annual Accounts of the Charitable Funds must record all gains on the disposal of
Intangible and Tangible Fixed Assets.
Based on current definitions there are no intangible or tangible fixed assets held within the
PHT Charitable Funds.
The only examples of Intangible Fixed Assets so far identified are copyrights and logos.
6.16 APPLICATION OF FUNDS - General
The Trustees for the Charitable Funds have a general duty to protect the Charity’s property
and must exercise overall control over its financial affairs. This duty is carried out through the
monitoring role of the Charitable Funds Committee and also through the procedures set out
below.
Expenditure for all funds must be in accordance with the charitable purpose agreed for the
fund and in the spirit of the donor’s wishes. It is inappropriate for Charitable Funds to be
used for personal gain or benefit. This does not preclude the use of funds in support of
individuals in the field of education. This is a charitable purpose, particularly as the benefit of
such education should be experienced by the public in terms of improved health care.
The use of funds specifically given for the benefit of health service staff in social functions is
an accepted charitable purpose. The aim should be to improve staff morale with the indirect
benefit of improved care being felt by patients. Please refer to the Charitable Funds staff
meal and functions policy for up to date guidance. However, great care and discretion
should be exercised in the use of funds in this way and the Trustees will be pleased to
provide guidance in specific cases. See section 6.26 ‘Staff Welfare and Amenities’ for
further advice.
Guidance can never cover every specific instance and for this reason these procedures have
been written in general terms.
Members of staff who are authorised to commit expenditure of Charitable Funds must only
do so when expenditure is:
a)
b)
c)
d)
within the authorised limits set out in Appendix D
of a charitable nature
within the objectives of the fund
capable of being met by the existing fund balances
Authorised Officers must clearly understand the purpose and objectives of the funds for
which they have responsibility.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 16 -
6.17 APPLICATION OF FUNDS – Requisitions, Orders, Payment Requests, Cheques
with Orders and Petty Cash
The Trust’s usual Ordering, Receipt and Payment for Goods and Services procedures apply
to both Charitable Funds and Exchequer funds. They must be complied with on all occasions
charitable funds are to be committed. In all cases, the Charitable Funds Accountant must
be aware of orders being placed against Charitable Funds. All expenditure from
Charitable Funds must be within the terms of any general and specific restrictions
placed upon the relevant funds. All requisitions, payment requests etc. must be
verified by the Charitable Funds Accountant following authorisation by one fund
signatory. All authorising officers should ensure they have access to SBS and i-proc in order
to process requisitions and receipt goods.
The Charitable Funds department require at least 10 clear working days to process cheques
with orders.
Purchases should not be undertaken until the Charitable Funds Accountant has seen and
authorised the proposed expenditure.
6.18 APPLICATION OF FUNDS - Authorisations
Appendix D sets out the authorisation requirements for committing Charitable Funds.
Where proposed expenditure exceeds £5,000, an “Application for Approval of Expenditure
from Charitable Funds in Excess of £5,000” form must be completed (see Appendix K).
Purchase of computer equipment must be authorised by the ICT department. The Charitable
Funds Accountant will forward the requisition to ICT once all necessary checks on the
proposed expenditure have taken place.
6.19 APPLICATION OF FUNDS – Medical equipment purchases
All requests for the purchase of non-disposable medical equipment must be approved by the
Trust Planning Committee and the Medical Devices Management Committee. The
appropriate ME form (available from the MDMC Co-ordinator) must be completed and sent to
Clinical Engineering, along with a completed Authorisation of Expenditure from Charitable
Funds form if the proposed purchase exceeds £5,000 per item (see 6.18 above). Clinical
Engineering will approve the request and then forward on to the Charitable Funds
Accountant.
6.20 APPLICAION OF FUNDS – Value Added Tax (VAT)
Certain purchases from charitable funds require completion of a VAT Exemption Declaration
form. The VAT Exemption Declaration forms are held by the Charitable Funds Accountant,
who will complete the form, where applicable, and ensure the requisitioner attaches it to theiproc requisition.
There is no general relief from VAT for charities. However, zero rating can be obtained on
the purchase of medical, scientific, computer, video, sterilising, laboratory or refrigeration
equipment which will be used in medical research, training, diagnosis or treatment. The
equipment must be purchased wholly from charitable funds in order to obtain the relief.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 17 -
6.21 APPLICATION OF FUNDS - Charitable Fund Payment Requests
A letter/memo to the Charitable Funds Accountant containing details of the reason for the
request (with supporting documentation) and signed by one fund signatory, will ensure a
cheque is raised.
Payment requests are only to be used in an emergency when an urgent cheque is
needed. The Trust’s ordering system should be used in normal circumstances.
Where the payment is due to a member of staff on the Trust payroll, the completed form will
be sent directly to the Payroll section once verified by the Charitable Funds Accountant.
Payment will then be made through the Payroll facility. Receipts/supporting documentation
must be provided for reimbursements. Where payment is made in a currency other than
British Pounds, using a credit card, the reimbursement will take place on production of the
credit card statement showing the exact sterling amount charged. For foreign currency
payments not made on a credit card, the exchange rate on the day the reimbursement
request is received by the Charitable Funds Accountant will be used to calculate the amount
owed.
Travel/mileage must be claimed using the Trusts travel and subsistence form as the amount
reimbursed is calculated by Payroll, based on vehicle size and distance travelled.
Payment by cheque outside of the payroll system is not allowed.
6.22 APPLICAION OF FUNDS - Cheque/Payment with Order
On receipt of the requisition marked “Cheque with Order” the Charitable Funds Accountant
will request a cheque to be raised by NHS Shared Business Service.
All payment requests must be verified by the Charitable Funds Accountant.
6.23 APPLICATION OF FUNDS – Petty Cash
Petty Cash should only be used in exceptional circumstances. The Trust ordering
system should be the usual method of procurement.
Disbursements from Petty Cash may be made for Charitable Funds expenditure when
adequate supporting documentation is provided ie. receipts. In addition to the usual
authorisation for each fund the Charitable Funds Accountant must verify any request before
payment can be made. Not all expenditure is appropriate for the Petty Cash system and in
these cases, reimbursement will be via Payroll.
6.24 APPLICATION OF FUNDS - Internal Purchases
Any proposed expenditure from Charitable Funds which is to be carried out internally within
the Trust (e.g. by the Medical Photography), must be approved under the criteria set out in
“Authorisation of Expenditure from Charitable Funds” (see Appendix D & K). All approved
orders given to the appropriate department must show evidence of that approval, together
with an appropriate account and cost centre code. The Charitable Funds Accountant
must also verify all ‘internal’ recharges.
No requisition for internal services which are to be met from Charitable Funds must be
accepted, unless approval has been obtained, and evidence of that approval shown.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 18 -
6.25 APPLICATION OF FUNDS – Patient Welfare and Amenities
Any proposed expenditure from Charitable Funds on patient welfare must be a development
over and above the operational level of the Trust. There is no specific guidance regarding
what is over and above the operational level of the Trust. As a “rule of thumb”, expenditure
should not be charged to Charitable Funds purely because there are insufficient Exchequer
funds. The Charitable Funds Accountant will be pleased to offer advice.
Purchases that are allowable and that are not deemed part of normal day-to-day expenditure
include medical equipment, furniture and fittings, patient comforts and benefits above the
standard required for operational purposes.
6.26 APPLICATION OF FUNDS - Staff Welfare and Amenities
Any proposed expenditure from Charitable Funds on staff welfare and benefits must not go
beyond what a good employer would consider reasonable to provide.
Expenditure may include :
a)
education - training and courses provided for PHT employees, which are above and
beyond requirements for an operational level
b)
improving staff facilities
c)
contributions towards staff social events. Contributions will be made only for staff with a
Portsmouth Hospitals NHS Trust contract.
No allowance is payable if a member of staff does not actually attend the function, for
whatever reason.
Payments made directly to staff from Charitable Funds must only be for non-taxable
reimbursements. All such payments must be supported with adequate documentation,
original receipts and properly authorised. The Trust’s ordering system should be used in
normal circumstances. Staff will not be reimbursed any VAT element of expenditure that
would not have incurred VAT had the correct procedures been followed.
Examples of payments to staff which are not allowed because they are non-charitable
include :
a)
b)
c)
individual gifts to staff (including birthday/wedding/retirement gifts). These would be
deemed as taxable benefits by the Inland Revenue, and are non-charitable as the
benefit is not public. Such gifts should be purchased using colleague contributions.
enhancements or supplements to members of staff (however, see Section 6.32)
payment of personal membership subscription, including those to obtain journals
Retirement Functions are funded from exchequer funds, with the amount available
determined by the employee’s length of service. If charitable funds are to be used to “top
up” the amount available, this will form part of the staff function/meal annual
allocation per member of staff (please see Charitable Fund Staff Function/Meals Policy
for up to date guidance). A list of staff members attending will be required.
Remember: expenditure on staff must be linked back to improvement in patient care,
thereby meeting the objective of our charity, being the relief of those who are ill.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 19 -
6.27 APPLICATION OF FUNDS - Research
Medical research financed from Charitable Funds must only be commenced when there is
the intention at the outset that the results will be published, for example as an article in a
professional journal.
Medical research is not always successful, and therefore there would be no point in
publishing the results unless it is likely to assist future research. However the Research and
Development Office and Support Unit (RDSU) will monitor and review the progress of all
research and the planned programme of payments.
The support by a charity of private commercial research is not permitted.
A research project funded by Charitable Funds must be for the public benefit and not for the
benefit of a private individual or organisation (ie. where the results are owned by the
sponsoring drug company). Such research projects are exchequer income generation
schemes.
Details of any proposed research to be met from Charitable Funds must be approved by the
Director of Research & Development prior to commencement.
The Research and Development Support Unit will be pleased to advise and assist on any
proposed research projects.
Below is an excerpt from the NHS Executive’s Funds held on trust guidance
Where charitable funds are used to provide grants or other funding for research, the
Trustees have a duty to ensure that they have power to do this and that the research they
are funding is charitable.
In any case of charitable research to which the charity devotes any resources, the basic
duties of Trustees are to ensure that:
a)
b)
c)
d)
the research falls within the scope of the charity’s purposes and its powers, and is an
effective way of fulfilling those charitable purposes
the research is well managed and cost effective
the research is good quality and
the research is used with the aim of achieving public benefit.
These duties are onerous and should not be undertaken lightly.
Charitable purposes are those that the law acknowledges as carrying a public benefit in their
fulfilment. It is important to understand that there is nothing charitable, and no inherent public
benefit, in conducting research or in paying someone else to conduct it. A body whose
purpose is merely to conduct or fund research in a particular field is not a charity. The
charitable element, and the realisation of public benefit, lies in the use of research and its
products to achieve the broader purpose, recognised as charitable. The task of charity
trustees is to ensure that the useful products of the research which the charity has resourced
are devoted to the active fulfilment of their charity’s purposes and, thus, to the realisation of a
public benefit.
When a drug company contracts with a researcher to undertake a clinical trial on its behalf,
the contract, which is made between the researcher and the drug company, invariably makes
it clear that the results are owned by the drug company. Therefore, even if in due course the
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 20 -
results are made available to the public, it is the drug company that receives the results first
in order to see if they are capable of being exploited commercially. This is therefore a
business service undertaken by the researcher or by the NHS trust (depending on who
signed the contract) and not a charitable activity.
If such research is being undertaken on NHS premises, using NHS resources, then the NHS
Trust may be entitled to recover its costs – dependant on the terms of the agreement
between researcher and NHS Trust. Any such income should be accounted for within its
exchequer funds as income generation and should not pass through NHS charitable funds –
even as a matter of convenience.
If it is the researcher rather than the NHS trust which signed the contract then at the end of
the drugs trial, and after deducting any allowable costs including those due to the NHS, the
researcher may be left with an amount of “profit”. This clearly has tax implications for the
researcher. They can defray some (or all) of this tax liability by making an outright gift of the
amount into one of the charitable funds registered with the NHS trust – the donation should
follow the tax rules eg gift aid.
6.28 Fund-raising/Publicity
All proposed fund-raising schemes for Charitable Funds must be approved by the
Fundraising Team (see Section 6.10)
Any proposed fund-raising scheme application must clearly identify all estimated costs in
carrying out the scheme, including those of publicity and give an indication of anticipated
income.
All publicity in respect of Charitable Funds must be approved in advance by the Public
Relations Department and the Fundraising Team..
6.29 Trading
The PHT Charity is not set up to undertake trading activities. If any member of staff is
proposing any fund-raising activity, which could be construed as trading, to provide for
Charitable Fund income, they must in the first instance consult the Charitable Funds
Accountant and Fund-raising Co-ordinator.
6.30 Management and Administration
Management and Administration costs incurred by Charitable Funds includes central
management and administration costs, which include the costs of legal advice, audit fees,
payroll, creditors, financial information etc.
Costs are recharged to each fund on an annual basis, in proportion to fund balances. This is
achieved by netting the costs against the Investment Income due to each fund. (See section
6.9).
6.31 Brokers Fees
Brokers’ fees are charged for the management of the investments within the Charitable
Funds Investment Portfolio. These costs are included in the cost of buying or deducted from
sales. Therefore Investment Income shown in fund balances is net of these costs.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 21 -
6.32 Staff Charged to Charitable Funds
Fund Managers must inform the Charitable Funds Accountant of all proposed temporary and
permanent staff appointments that are to be charged against a Charitable Fund. Prior to the
issuing of a contract, the Charitable Fund Accountant must give authorisation.
Staff may only be charged to funds if they are undertaking charitable research or a
complimentary service to patients, which exceeds the NHS treatment which must be
provided to them.
The funds may occasionally be used to “pump-prime” a service for two to three years. If
during this time no commissioner is willing to purchase the service, it must cease when the
charitable funding period ends.
6.33 INVESTMENT OF FUNDS
General
The Trust, in its capacity as Charity Trustee, has the general duty of properly managing and
protecting the funds of the Charities. In particular it should :
a)
invest money not needed immediately, or place it on deposit to earn interest if
expenditure is expected in the near future;
b)
invest the funds in a way which aims to both preserve their capital value and produce a
proper return consistent with prudent investment.
c)
not place the fund at risk by speculative investment; and
d)
invest only as permitted by the investment powers of the Charity.
In order to carry out these duties, the Director of Finance on behalf of the Trust is
responsible for all aspects of the management of the investment of Charitable Funds.
An official pooling scheme is operated for the investments. The Scheme was registered with
the Charity Commission on 17 March 1998, named the Portsmouth Hospitals NHS Trust
(Expendable Funds) Common Investment Fund.
The procedures agreed by the Trust Board relating to the investment of Charitable Funds are
set out in Appendix M to these procedures. The Trust must also be aware and take into
account, advice and guidance given in respect of investments and investment management
by the Charity Commission.
The Charitable Funds Committee is responsible for reviewing the performance of the Trust’s
stockbrokers.
Brokers Information
The Trust’s brokers who currently have responsibility for managing the Charitable Fund
Investment Portfolio are Hume Capital Management Limited.
Brokers are appointed by the Trust Board on the recommendation of the Charitable Funds
Committee.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 22 -
Realised Gains and Losses/Unrealised Gains and Losses
Gains and losses from the sale of investments and unrealised gains and losses (the
difference between book cost and current market value of investments) on the Charitable
Funds portfolio are reviewed by the Charitable Funds Committee.
6.34 Banking arrangements
All banking arrangements for Charitable Funds must be in line with the procedures set out in
the SFI’s section 5 and the Code of Financial Procedures section 4.2.
All income to the Charitable Funds must be deposited in accounts held by HSBC. One is held
for the Rocky Appeal and one for all other Charitable Funds.
The Director of Finance is responsible for ensuring that bank account balances do not
become overdrawn or excessively high. Surplus funds are invested in the Charitable Funds
Business Reserve account or the investment portfolio held by the broker (see Section 6.39 Cash Management).
The Director of Finance is responsible for ensuring the secure operation of all Charitable
Fund bank accounts.
6.35 REPORTING
Monthly Statements
All Fund Holders should access their fund statements using Business Intelligence section of
the Oracle applications system supplied by NHS SBS.
It is the responsibility of all authorised officers to ensure the accuracy of Account Statements
and to raise any queries with the Charitable Funds Accountant.
A written record should be kept of all agreed amendments that are required to be made in
order that these amendments can be checked against subsequent Statements.
Statement on Unrealised Gains and Losses
Unrealised gains and losses on investments of Charitable Funds are included in the Annual
Accounts at the end of each financial year. Any significant unrealised loss on the value of the
investments may require specific action by the Trustees to temporarily curtail any further
expenditure on all the charitable funds (See also Section 6.36 below).
Accruals
Account Statements include the value of orders received but not yet paid. It is imperative
therefore, that all orders against Charitable Funds are made through the official ordering
system and that goods received against these orders are promptly recorded in the system
i.e. booked in.
6.36 The Reserve Policy and annual spending plans
The Trustee is expected to ensure that charitable funds are spent, on the purpose for which
they were donated, within a reasonable timescale, unless funds are being amassed for a
large piece of expenditure. Delays in spending funds may result in a breach of Trust.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 23 -
Account balances are continuously monitored. The Charity Commission can hold the trustees
in breach of trust if they accumulate funds without good reason.
Fund Managers are required to forward their spending plans for the next financial year to the
Charitable Funds Accountant in line with the requested deadline, for collation and
presentation to the Charitable Funds Committee.
6.37 Annual Accounts & Annual Report
The Trust must submit an Annual Report and the Director of Finance is responsible for
producing Annual Accounts for Charitable Funds. These reports must be submitted to the
Charity Commission to the deadline set and must comply with all charity law and the
Statement of Recommended Practices issued by the Charity Commission.
6.38 ACCOUNT MAINTENANCE AND SIGNATORY APPROVALS
General
Trustees have a duty to exercise control over the Charity’s financial affairs. A part of this role
is to approve the creation, merger and deletion of funds and to approve the members of staff
who may authorise expenditure from Charitable Funds. The responsibility for account
maintenance is delegated to the Director of Finance.
By definition, a Charitable Fund cannot be treated as “my private fund”. Charitable Funds
will only be accepted as such and benefit from charitable status if they accord with the
definitions given by the Charity Commission (see section 3).
Creating new accounts, merging and deleting existing accounts
Each Charitable Fund must be allocated a separate accounting cost centre.
Any member of staff wishing to create a new Charitable Fund must apply to the Finance
Department via the Charitable Funds Accountant, using the form “Application for the creation
of a new Charitable Fund” (see Appendix N). The form will be returned if it has not been fully
completed and a new fund will not be created unless a material amount of funding is to be
paid in. Care should be taken to ensure the charitable purpose of the proposed new fund is
not already covered by an existing fund.
The merger of existing funds is encouraged by the Charity Commission where their purposes
are very similar. Where the purposes of a fund have been met and there is no need to
continue the fund, it should be closed. The Fund Manager should continually monitor funds
and inform the Charitable Funds Accountant if there is a case for the merger or deletion of a
fund.
Funds that have continuously had a balance of less than £1,000 will be merged with another
fund of a similar purpose.
Fund balances
Donations and legacies are generally given for the benefit of patients and staff. Trustees
have a duty to apply the funds unless the objects give them the power to accumulate income
or there is a specific application in mind.
Charitable Fund accounts should not, therefore, be allowed to accumulate income unless
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 24 -
there is a specific purpose approved by the Trustee (via the Charitable Funds Committee) to
do so. (See section 6.36 above).
Approval of Signatories
Proposed expenditure of up to £5,000 from any fund requires the authorisation from one
approved signatory plus the Charitable Funds Accountant (See Appendix D)
The Chief Executive, on behalf of the Trust must give approval to signatories.
A list of approved signatories will be held by the Charitable Funds Accountant, who MUST be
informed of any proposed changes so that an updated Internal Governing Document can be
produced (see Appendix C) (see also Section 3).
Authorisation must comply with the requirements given at section 6.17
A random sample of fund expenditure will be analysed by Internal Audit and/or External
Auditors.
6.39 CASH MANAGEMENT
In general there should not be a mix between Charitable Funds and Exchequer funds.
Separate bank accounts exist for both funds (see Section 6.34).
Where the Exchequer account makes payments on behalf of Charitable Funds a
reimbursement must be made by the Director of Finance from Charitable Funds as soon as
practicable. This should be on a monthly basis as a minimum.
Ideally fund managers should indicate any known timing of expenditure so that cash
forecasts for Charitable Funds can be carried out by the Director of Finance to ensure the
liquidity of the total Charitable Funds cash. This will identify any funds that could be safely
added to the Charitable Funds Investment Portfolio or alternatively identify funds that need to
be returned from the portfolio. The forecasts must include all outstanding reimbursements
due to Exchequer funds and any grants, donations, fund-raising receipts or legacies which
have not been received but which are certain.
The information highlighted at section 6.36 will provide the information needed to assist the
process of cash and investment management.
6.40 AUDIT
External Audit
The Charity Commission requires that our charity has an independent audit.
External auditors are now required to report separately to the Charity Commission on any
matters of concern.
Internal Audit
All systems within the Trust relating to Charitable Funds are subject to continuous internal
audit. All records within departments relating to Charitable Funds should be made available
whenever required by internal audit staff.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 25 -
Monthly Analysis
All charitable income and expenditure is reviewed on a monthly basis. If you are asked to
provide further information about income or expenditure you must do so. If any transaction
(income or expenditure) appears to be non-charitable and no explanation is provided to the
Charitable Fund Accountant, the transaction will be removed from the funds and coded to the
department’s exchequer budget.
6.41
EXTERNAL FUNDS/BANK ACCOUNTS
Any charitable monies which are generated by a person’s association with the Trust must be
held within the Portsmouth Hospitals NHS Trust Charitable Funds and so covered by the
registration held by the Trust with the Charity Commissioners for England and Wales.
In the past, some funds have been placed in external bank accounts as a means of avoiding
the apparent “bureaucracy” legally imposed to ensure charitable money is safeguarded.
Where members of staff hold bank accounts, or are aware of bank accounts held externally
to Exchequer or Charitable Funds, these must be recorded in the Register held within the
Trust.
If funds have been given to benefit the Trust’s patients or staff, or have derived income by
using Trust resources or actions carried out on Trust premises, this money MUST be held
and administered by the Trust. Staff not complying with this requirement may be referred to
the Counter Fraud Specialist and risk disciplinary action.
The Charity Commissioners and Audit advice is that these funds should be held in the Trust’s
umbrella charity registration, due to the association with the Trust.
If monies are placed in an external bank account which is not registered as a Charity, the
donor must be made aware of the account’s non-charitable status and the name of any such
account must in no way be linked with the Trust nor use the Trusts premises as its legal
address.
Members of staff wishing to hold charitable money, which is not linked with the Trust, can
contact the Charity Commission for advice regarding setting up a charity.
7.0 TRAINING
Training is available from the Charitable Funds Accountant at the request of the Charitable
Fund Managers.
8.0 REFERENCES AND ASSOCIATED DOCUMENTATION






Charity Commission website for guidance documents
Trust Standing Financial Instructions
Charitable Funds Committee Terms of Reference
Charities Statement of Recommended Practice 2005
Body of charity law including Charities Act, Trustee Investment Acts 1961 and 2000
Charitable Funds Staff Meals & Functions Policy
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 26 -
9.0 EQUALITY IMPACT STATEMENT
Portsmouth Hospitals NHS Trust is committed to ensuring that, as far as is reasonably
practicable, the way we provide services to the public and the way we treat our staff reflects
their individual needs and does not discriminate against individuals or groups on any grounds.
This policy has been assessed accordingly
10.0 MONITORING COMPLIANCE WITH, AND THE EFFECTIVENESS OF, PROCEDURAL
DOCUMENTS
The Charitable Funds Committee meets bi-monthly and is responsible for monitoring the
management of charitable funds. The Trust Board receives the Committee minutes and has
overall responsibility for taking any action required to ensure the effective running of the
charity.
The charity is also subject to internal and external audit scrutiny.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 27 -
APPENDIX A – Contact points
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 28 -
APPENDIX B – Details of Structure and Registration of Funds
Portsmouth Hospitals NHS Trust
How our charitable funds are registered with the Charity Commission
NHS Umbrella Charity
Portsmouth Hospitals NHS Trust General Charitable Fund Charity (1047986)
NHS Special Purpose Charities (linked to the umbrella charity)
Portsmouth Hospitals Rocky Appeal
Portsmouth Hospitals Cardiology
Portsmouth Hospitals Dermatology
Portsmouth Hospitals General Medicine
Portsmouth Hospitals Renal Medicine
Portsmouth Hospitals Accident & Emergency
Portsmouth Hospitals Orthopaedics
Portsmouth Hospitals Rheumatology
Portsmouth Hospitals General Surgery
Portsmouth Hospitals ENT
Portsmouth Hospitals Maxillofacial
Portsmouth Hospitals Intensive Therapy
Portsmouth Hospitals Ophthalmology
Portsmouth Hospitals Radiotherapy
Portsmouth Hospitals Endoscopy
Portsmouth Hospitals Imaging Services
Portsmouth Hospitals Pathology Services
Portsmouth Hospitals Paediatrics
Portsmouth Hospitals Gynaecology
Portsmouth Hospitals Maternity
Portsmouth Hospitals Urology
Portsmouth Hospitals Department of Medicine for Older People
Portsmouth Hospitals Other Services (umbrella)
Portsmouth Hospitals General – Unrestricted (umbrella)
Portsmouth Hospitals NHS Trust (Expendable Funds) Common Investment Fund (pooling
scheme)
The objectives of our charitable funds are registered as:
PHT General Charitable Fund
The trustees shall hold the charitable fund upon trust to apply the income, and at their discretion, so
far as may be permissible, the capital for any charitable purpose or purposes relating to the National
Health Service.
PHT Rocky Appeal
The trustees shall hold the charitable fund upon trust to apply the income, and at their discretion, so
far as may be permissible, the capital for the relief of sickness by the development, improvement and
maintenance of clinical services provided by the Portsmouth Hospitals NHS Trust.
PHT “Specialty” Charities
The trustees shall hold the charitable fund upon trust to apply the income, and at their discretion, so
far as may be permissible, the capital for any charitable purposes relating to the [Specialty] services
provided by Portsmouth Hospitals NHS Trust.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 29 -
APPENDIX C – Internal Governing Document
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 30 -
APPENDIX D – Authorisation of Charitable Expenditure
Portsmouth Hospitals NHS Trust General Charitable Funds
Registration Number 1047986
Authorisation of expenditure from Charitable Funds
Set out below are the core principles to support the authorisation of expenditure :
(a) No Charitable Fund shall be overdrawn.
(b) All expenditure from Charitable Funds must be in accordance with the purpose of
that fund and use the provided ordering/payment procedures of the Trust.
(c) The authorisation threshold for all Charitable Funds is as follows:
£
Authorisation
up to £4999
£5000 - £50000 *
over £50000 *
Charitable Fund Signatories (one required) PLUS Finance or Trustee
Chief Executive or Director of Finance or Trustee
Trustee
* An 'Application for Approval of Charitable Funds Expenditure in Excess of £5000 must be completed
if an item exceeds £5000, to ensure that any revenue conseques are highlighted and approved by the
Divisional Finance Manager. (See (d) below)
(d) Potential costs to Exchequer of any expenditure from Charitable Funds must be
identified prior to seeking authorisation of expenditure.
(e) A Charitable Fund portal statement is available to view by the charitable
fundholder. Any queries should be highlighted to the Charitable Funds Accountant.
(f)
Charitable Fund transactions are audited and a monthly review is undertaken by the
Charitable Funds Accountant.
All requests for expenditure from Charitable Funds (ie. requisitions, cheques requests, internal
recharges, petty cash vouchers) MUST be forwarded to the Charitable Funds Accountant for
verification before a commitment to spend is made.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 31 -
APPENDIX E – Charitable Fund Financial Codes
Charitable Funds Financial Codes
Income
A Receipt for a Charitable Donation MUST be completed and distributed as indicated in the
Procedures and on the Receipt itself.
Legacies/bequests MUST be forwarded to the Director of Finance to be dealt with and tax
reclaimed where applicable.
Other income: income for research/clinical trials which is funded by a non-public body is not
charitable, and so must not be paid into a charitable fund. The Finance Manager for the
Directorate concerned will set up a cost centre outside the charitable fund structure to hold the
income and expenditure relating to the project.
Income subjective codes:
Donations
4571.
Legacies
4572.
Cashiers will identify the appropriate sub analysis 1 code for charitable income.
Expenditure
Expenditure subjective codes:
Patient Welfare & Amenity
Patients – Other Expenditure
Patients – Furniture
Patients – Christmas
Staff Welfare & Amenity
Staff – Course Fees
Staff – Educational Materials
Medical Equipment
Other Equipment
7952.29454
7952.29460
7952.29459
7952.29458
7954.29461
7954.29462
7954.29464
7952.29456
7952.29457
ONE authorised signatory is required for ALL expenditure PLUS a finance signature for
verification.
The authorisation thresholds need to be borne in mind. These may result in further signatures
being needed.
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 32 -
APPENDIX F – Example of a Receipt for a Charitable Donation
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 33 -
APPENDIX G (i) – Flow chart of Receipt of Donation via Ward/Department
PHT Charitable Funds: Codes of Procedure - Issue 6 May 2012. Review date May 2013
- 33 -
APPENDIX G (ii) – Flow chart of Receipt of Donation via Cashiers
PHT Charitable Funds: Codes of Procedure - Issue 9 2. Review date May 2013
- 34 -
APPENDIX H (i) – Ward/Department Donation Register
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 35 -
APPENDIX H (ii) – Example of a completed Donation Register
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 36 -
APPENDIX I – Cashiers Donation Register
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 37 -
APPENDIX J – Application for Charitable Fund Expenditure in excess of £5,000
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 38 -
APPENDIX K (i) – Fund-raising Authorisation Request Form
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 39 -
APPENDIX K (ii) – Explanatory Notes to Appendix K (i)
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 40 -
APPENDIX L – Investment of Charitable Fund Policy
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 41 -
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 42 -
APPENDIX M – Application for the creation of a new charitable fund
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 43 -
APPENDIX N – Charitable Funds Committee Terms of Reference
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 44 -
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 45 -
PHT Charitable Funds: Codes of Procedure - Issue 7 July 2013. Review date July 2014
- 46 -