1. Purpose

The purpose of due diligence is to provide assurance that organisations receiving Pride in Place funding by way of a grant agreement:

• Are properly constituted.
• Have suitable governance arrangements.
• Are financially viable.
• Can deliver the proposed activity.
• Can manage public funding appropriately.
• Present an acceptable level of risk to the Programme and the Council as Accountable Body.

2. Proportionate Approach

The level of due diligence should reflect:

• The value of funding requested.
• The complexity of the project.
• The level of risk.
• The experience and capacity of the organisation.

Public Sector Bodies

The due diligence requirements set out in this Policy are principally intended for funding provided to voluntary organisations, community organisations, charities, social enterprises and other external funding recipients. Where funding is provided to public sector bodies, including local authorities, NHS organisations, Integrated Care Boards and other statutory public authorities, they will not normally be subject to the full due diligence requirements contained within this Policy.

Where funding is awarded to a public sector body, the Council may rely upon the organisation's existing statutory governance, financial management, audit, regulatory and assurance arrangements. The Council may nevertheless seek such information as it reasonably requires to satisfy itself that:

• The proposed activity is eligible for funding (including subsidy control implications).
• Appropriate arrangements are in place for the management and monitoring of public funds.
• The organisation has the capacity to deliver the proposed activity.
• Relevant reporting and monitoring requirements can be met.

The level of assurance required will be determined on a proportionate basis having regard to the nature of the organisation and the funding proposal.

3. Low-Risk Grants

Example: Community grants under £10,000 

Require:

• Constitution or governing document.
• Bank account verification.
• Safeguarding declaration (if relevant).
• Signed funding agreement.

4.  Medium-Risk Grants 

Example: £10,000 - £100,000 

Require:

• Constitution/governing document.
• Accounts (last 12 months)
• Trustee/director details.
• Policies (as appropriate).
• Delivery plan.
• Evidence of financial controls.
• Signed funding agreement.

5. Higher-Risk Grants

Example: Over £100,000

Require:

• Full financial assessment.
• Latest accounts
• Management accounts.
• Cashflow forecast.
• Procurement arrangements.
• Subsidy control assessment.
• Governance review.
• Risk assessment.
• Monitoring framework.
• Formal grant or contract documentation.

6. Governance Checks

The Council may request:

• Constitution or Articles of Association.
• Charity registration details.
• Companies House information.
• List of trustees/directors.
• Declaration of Interests.
• Evidence of governance arrangements.

7. Financial Checks

The Council may review:

• Audited accounts.
• Bank statements.
• Financial policies.
• Budget forecasts.
• Existing funding sources.
• Outstanding liabilities.

8. Policy Checks

Where relevant, organisations may be required to provide:

• Safeguarding Policy.
• Equality and Diversity Policy.
• Health and Safety Policy.
• Data Protection Policy.
• Anti-Fraud Policy.

9. Project Delivery Assessment

Applicants may be required to demonstrate:

• Relevant experience.
• Appropriate staffing and volunteer capacity.
• Project management arrangements.
• Partnership agreements.
• Realistic delivery plans.

10. Funding Agreements

All organisations receiving funding must enter into a written agreement setting out:

• Approved purpose of funding.
• Payment arrangements.
• Monitoring requirements.
• Reporting requirements.
• Record retention requirements.
• Clawback provisions.
• Procurement obligations.
• Subsidy control requirements.

11. Risk Rating

Each application should receive a risk rating:

12. Monitoring Requirements

Recipients may be required to provide:

• Progress reports.
• Financial returns.
• Evidence of outputs and outcomes.
• Monitoring information requested by MHCLG.
• End-of-project evaluation.

13. Approval

The final due diligence assessment should be reviewed by:

• Strategy and Policy Team or other Team nominated by the Council from time to time (on behalf of the Pride in Place Programme)
• Finance
• Legal (where appropriate)
• Procurement (where appropriate) before any funding is released.

14. Contracts

In the event that a contract for works or services is procured to deliver interventions authorised by the Neighbourhood Board, the contract will be procured under the Council’s Contract Procedure Rules and Financial Regulations.