Memorandum submitted by the Olympic Lottery
Distributor
OLYMPIC LOTTERY
DISTRIBUTOR—OVERVIEW
The Olympic Lottery Distributor will provide
half of the funds required for the £2.375 billion Public
Sector Funding Package required for the London 2012 Olympic Games
and Paralympic Games. On the face of it, our job is a rather simple
one. The task of creating the vast range of facilities and infrastructure
necessary to host the Games falls to the Olympic Delivery Authority
and we envisage that they will be the main recipient of the funds
at our disposal.
However control of such large sums of public
money rightly brings a range of responsibilities and accountabilities.
First and foremost we are accountable to the Lottery players whose
money we are spending. We have a duty to see that their money
is spent wisely and well. We see our job as ensuring that the
money we dispense achieves the laudable objectives set out in
the Candidature File which on that memorable day in July 2005
won London the right to host the 2012 Games. In particular we
want to see those objectives around legacy and social and environmental
sustainability achieved. We also want the London Games to live
up to the promises we made to the international community for
an inclusive Games built on our strengths derived from the our
diversity and our long history of welcoming the world to London.
Therefore, we cannot be a simple conduit for
Lottery money flowing from players to those responsible for delivering
the Olympic vision. In considering applications for grant we must
satisfy ourselves that the objectives for which grant is sought
match up to the ideals which were set out in our bid. In monitoring
how grant is spent we must be vigilant in checking that the objectives
for which grant was awarded are delivered.
We know that over the next six years many problems
will be encountered and pragmatic solutions will need to be found
but we must work with others to ensure that the longer term benefits
of the Games are not sacrificed in the pursuit of short term expediency.
In carrying out this role we are very aware
of the need to minimise any burden we place on those to whom we
provide grant and the pace at which those responsible for delivering
the Olympics will need to work. The best way of minimising such
burdens and avoiding delay, whilst respecting the unavoidable
responsibility we bear, is to build a close and open relationship
between the OLD and the agencies responsible for delivering the
Olympics. We are pleased with how our relationships have been
developing with the ODA in this respect. However, we remain of
the view that we need to be more closely integrated with the deliberations
of the Olympic Board and the Olympic Board Steering Group. Aside
from the point of principle—that the provider of half the
Public Sector Funding Package should be represented at these meetings—is
the practical point that if we are involved in these meetings
we will be better informed about how the project is developing
and can make our views known at an early stage rather than possibly
having to react later in a way which may cause delay and add to
costs. We hope therefore that the Board will feel able to include
us in these meetings.
More broadly the number of bodies concerned
with the Olympics is large and their interrelationships are complex.
Perhaps this is inevitable but the potential for problems arising
from these arrangements will be reduced by openness and good information
flows.
OLD only has the money which is made available
by Lottery players. While it is not for us to sell Lottery tickets
we have an interest in people continuing to play the Lottery.
We see our role in helping make sure Lottery players know where
their money has gone and we are in discussion on this complex
issue with the ODA and LOCOG. More broadly we see ourselves as
having a duty to safeguard the reputation of the Lottery insofar
as it is supporting the Olympic vision behind which much of the
nation united last year. We see our role of playing an active
role in ensuring that Lottery money delivers Olympic objectives
as helping in this respect. We are also anxious that the London
Olympics are seen as another reason to play the Lottery and that
the prospect of the Games will help grow the Lottery's income.
We are part of the wider Lottery family and we are not indifferent
to concerns that the funding requirements of the Olympics will
deprive the other Good Causes and we know that damage to the reputation
of the Lottery may make us all poorer. We hope therefore that
the Olympics can be used as a high profile positive message in
Lottery marketing.
We also think it is important that sectors such
as heritage and the arts as well as sport are able to take advantage
of the Olympics. Given that the Olympics is a sporting and a cultural
initiative, this is entirely in line with the Olympic tradition.
On a more narrow basis, given the importance to our economy of
the arts, heritage and broader culture, it surely makes sense
to make these sectors a part of our Olympic experience at a time
when the UK will be on show to the world. Therefore we will encourage
other Lottery Distributors to see the Olympics as an opportunity
for them too and we applaud the work some of them have initiated
in this area.
In conclusion, the OLD will play an active part
in the delivery of the Olympics. While we do not wish to create
unnecessary additional burdens, the remit given to us by Parliament
does not allow us to be passive. There may be times when circumstances
demand we voice our concerns and seek changes but by working closely
and openly with our partners from the outset we trust that we
can work together in harmony and with a successful outcome.
INTRODUCTION
1. The Olympic Lottery Distributor
The Olympic Lottery Distributor (OLD) is an
independent, UK-wide, Non-Departmental Public Body which distributes
Lottery Funds from the Olympic Lottery Distribution Fund to support
the provision of facilities, services and functions necessary
for the hosting of the 2012 Olympic Games. It is expected that
OLD will be responsible for disbursing approximately £1.2
billion of Lottery funds in total. The OLD's funds form part of
the Public Sector Funding Package (PSFP). This submission describes
the powers, function, policies, funding and procedures of the
OLD.
2. OLD in Context: The Public Sector Funding
Package
The PFSP amounts to £2.375 million to which
OLD is contributing although there will be significant additional
expenditure on major infrastructure projects. A Memorandum of
Understanding (MoU) defining the PSFP exists between DCMS and
the Mayor. It explains what public money is allocated to the Olympics,
where it comes from, and when it will become available. This MoU
does not refer to Departmental expenditure. It states that £1.5
billion will come from the National Lottery and it is anticipated
that £1.16 billion of this sum will come from OLD with the
remainder coming from the established Sports Lottery bodies: £289.5
million of the PSFP will be available from existing national Sports
Lottery Distributors and will be spent across the UK. Whilst the
£289.5 million contributes to the PSFP, it is not directly
related to the provision of infrastructure and services. An additional
£50.5 million will, however, be made available from Sport
England for Olympic facilities—specifically the Aquatic
Centre and the Velodrome. With funding from the GLA and LDA of
up to £875 million, the total Public Sector Funding Package
will be £2.375 billion.
Should these sums prove insufficient, the intention
is that, subject to agreement between the Mayor and the Government
the costs are shared between the Mayor and the Lottery.
POWERS AND
FUNCTIONS OF
THE OLYMPIC
LOTTERY DISTRIBUTOR
1. Statutory Framework
The Olympic Lottery Distributor was established
under section 29 of the The Horse Racing, Betting and Olympic
Lottery Act 2004. This Act made provision for the establishment
of both an Olympic Lottery Distribution Fund (OLDF)—into
which money raised by Lottery games dedicated to the Olympics
will be paid—and an Olympic Lottery Distributor (OLD) which
would disburse this money. The Olympic Lotteries (Declaration
that London is to host the 2012 Olympic games) Order 2005 which
was made on 6 July 2005 and came into force on 8 July 2005, allowing
the relevant provisions of the Act to commence.
The purpose of OLD, as defined in s30 of the
Act, is to distribute money received by way of grant or loan where
it considers this necessary or expedient for the purpose or in
connection with:
"(a) the provision of facilities which
are necessary or expedient if London is to be the host city of
the 2012 Olympic games, or
(b) any other service or function which it
is necessary or expedient to provide or undertake if London is
to be the host of the 2012 Olympic Games."
The Act goes on to state that a grant or loan
may in particular, be related to:
"(a) facilities outside London;
(b) cultural and other events held in accordance
with a provision of the Olympic Charter or in accordance with
an agreement entered into by or on behalf of the International
Olympic Committee."
The five Board members were appointed by the
Secretary of State for Culture, Media and Sport; the Chair in
March 2006 and the remaining Board members April 2006. A list
of Members is at Annex A. All Board members are appointed until
2010.
Section 30 (6) of the Act empowers the Secretary
of State, by regulation, to determine that a specified class of
expenditure is or is not eligible for support by OLD. This power
relates to eligibility alone—the decision to approve or
refuse individual applications for grant lies with the OLD Board,
rather than the Secretary of State. Similarly, it is for OLD to
determine whether grant offered should be paid or withheld. OLD
is more, therefore, than simply an administrative mechanism for
moving funds from OLDF to the Games. It has statutory discretion
to exercise—and a duty to do so properly and regularly.
In addition to the power to determine eligibility,
Schedule 5, Part 2, s14 (1) conveys the right for the Secretary
of State to issue Directions to OLD which the latter "shall
comply with".
These directions may, in particular:
(a) relate to the management or control of
monies received;
(b) relate to the terms and conditions of
grants or loans;
(c) require OLD to obtain Secretary of State
consent before taking certain actions;
(d) require OLD to provide information;
(e) relate to the employment of staff;
(f) relate, with Treasury consent, to the
form of accounts or accounting methodology.
Decisions on the way in which these Directions
are implemented, and decisions on individual applications for
funding, are made by OLD independently of Government.
2. Where does the money come from?
The OLD disburses money from the Olympic Lottery
Distribution Fund (OLDF). Camelot operates certain Games which
are allocated to the Olympic Lottery Distribution Fund, namely
the Dream Numbers draw game, online draw games, and a number of
scratchcard games (not all of which have Olympic branding).
These games are planned to produce an income
of at least £750 million for the OLDF by the end of 2012.
Income in the first year (2005-06) was slightly above target at
£16 million. The operator of the National Lottery, Camelot
plc, has estimated that income during 2006-07 will be £96
million and this has been endorsed by the National Lottery Commission.
(See annex B for a year on year estimate of income) To date £37.4
million has been received in 2006-07.
There is no guarantee that Camelot's estimates
will be delivered and the simple transfer of income from existing
games to achieve the 2006-07 target may be problematic for other
Lottery Distributors—something which OLD would wish to avoid
in the wider interests of the reputation of the National Lottery.
However, In the year 2006-07 OLD has offered grants totalling
£77 million to the ODA and has paid £15 million to date.
Therefore we can be confident that our income will be sufficient
to meet our commitments this year. (Our estimate of running costs
for 2006-07 is £749,000.)
Nevertheless, any shortfall in income would
cause problems in future years as the ODA's needs grow. In future
years, OLD will not have unspent income to cushion it from variations
in the performance of the Games allocated to the OLDF. There are
three strategies to mitigate impacts of a shortfall. The first
is to ensure that there is close liaison between ODA, OLD, the
National Lottery Commission and the operator of the National Lottery
so that there is a clear understanding of the projected income
and expenditure of OLD. This should ensure that ample warning
is given of any cashflow problems. The second is to revise the
shares of income from specific games going to the NLDF and the
OLDF. This would be a temporary measure which could assist in
overcoming temporary cashflow difficulties. It simply brings forward
the point at which the £750 million target is reached. Whilst
such transfers would not increase the overall financial impact
of the OLD on other Lottery Distributors, they could concentrate
those impacts and reduce income within the year, possibly creating
planning difficulties for other Distributors. This is not therefore
an ideal solution from the point of view of OLD, and we are also
mindful that the National Lottery Commission will, rightly, scrutinise
such proposals carefully for this reason. The third strategy is
to ensure that alternate sources of funding are identified and
secured in good time.
As OLD is expected to contribute £1.16
billion in total to the PSFP, even with an income of £750
million from games dedicated to the Olympics, an additional sum
of up to £410 million will need to be transferred from the
NLDF to the OLDF. The Horse Racing, Betting and Olympic Lottery
Act allows for this to be done by means of payments from the National
Lottery Distribution Fund (NLDF). Section 25 (1) of the Act empowers
the Secretary of State to make an order permitting themselves
to make payments from the NLDF to the OLDF. However, before making
such an order, the Secretary of State must consult with the other
Lottery Distributors—and the order is subject to the Positive
Resolution process, meaning that it must be laid before each House
of Parliament and subject to their approval before it takes effect.
3. Relationship with Government
The Government Olympic Executive (GOE), which
sits within DCMS, is OLD's sponsor body. As the head of GOE is
Accounting Officer for the Olympic Lottery Distribution Fund,
they also have an oversight function in that capacity. DCMS therefore
sign-off OLD's systems and procedures.
The Olympic Programme Support Unit (OPSU) is
an independent body of secondees from stakeholders, lying, for
administrative purposes, within DCMS but answering to all stakeholders.
It provides support, secretariat and monitoring functions for
the Olympic Board.
In its capacity as a funding body, GOE liaises
closely with OLD. Staff from both bodies meet on a monthly basis
to discuss progress and identify issues. GOE also chairs a funders'
meeting which provides a forum for the funding bodies and ODA
to meet and discuss cash requirements, etc.
4. Relationships with Stakeholders
4.1 Committee structures
The Stakeholder bodies are the Government, the
BOA, the GLA and LOCOG. The most senior representatives of these
bodies form the Olympic Board, which co-ordinates the work of
LOCOG and ODA, and liaises with Government and Agencies at local,
regional and national level. There is also a Cabinet-level security
committee which works with the Olympic Board. The Olympic Board
is not a legal entity but rather an informal committee of the
interested parties. OLD is not represented on the Olympic Board
but believes it would be in every ones interest for it to be included.
The Olympic Board established an Olympic Board
Steering Group (OBSG), with a programme direction and conflict
resolution role. OBSG's membership comprises the Chief Executive
of GOE, who is the chair; the Chief Executives of BOA, BPA, LOCOG,
and ODA; the Director General of DCLG; the Director of OPSU; the
Business Planning and Regeneration Director of GLA; and a Director
of GOE. The primary functions of OBSG are:
— resolving and determining issues
raised by members of the Olympic Board to ensure the delivery
of commitments given in the Host City Contract or the Guarantees;
— overseeing the delivery of the Olympic
Vision and Strategic Objectives; and
— ensuring that a sustainable legacy
is achieved through staging the London 2012 Olympic and Paralympic
Games.
OBSG receives monitoring reports on the wider
Olympic Programme and oversees all aspects of the delivery. OLD
has been seeking representation on the OBSG but this has not yet
been achieved although the Chief Executive of OLD has been offered
a briefing on the outcome of OBSG meetings by the head of OPSU.
In addition OPSU has agreed to make available summaries of the
direct reports they receive from ODA; high level progress reports
including a dashboard summary and risk assessment; Gateway Reviews
and any other Strategic Reviews as carried out; any reports on
the overall delivery of the Games, including those dealing with
essential but "Non Olympic" infrastructure; and strategic
reports dealing with LOCOG's work on an exception basis, should
difficulties occur.
OLD remains of the view that, as the largest
contributor to the PSFP, it has a manifest interest in the deliberations
and discussions of the Olympic Board and the Olympic Board Steering
Group. It considers that the current arrangements may create a
needless obstruction to the free and timely exchange of programme
information. This could potentially result in delayed payments
or increased administrative expenditure on nugatory work. Furthermore,
financial discussions taking place in these fora without OLD's
presence will not be fully informed discussions as the major public
sector funder will be not be present. OLD remains of the view
that it should be represented at these Committees.
The Olympic Lottery Distributor is represented
on the Olympic Projects Review Group (OPRG). Its primary purpose
is to assess the value for money and affordability of projects
above the ODA's financial delegation limit (£20 million),
and to assess whether they can be recommended to HM Treasury and
the Secretary of State for Culture, Media and Sport for approval.
OLD has observer status on the OPRG (OLD is solely a grant giving
body and must restrict its exercise of discretion to its statutory
purpose).
4.2 Olympic Delivery Authority (ODA)
The London Olympic Games and Paralympic Games
Act 2006 provided for the creation of an Olympic Delivery Authority,
which may take any action it thinks necessary or expedient for
preparing for the Olympics, ensuring suitable premises are constructed,
adapted or acquired for the Olympics, and ensuring that adequate
transport arrangements are met; the ODA is also the Olympic Transport
Authority (OTA). The ODA is at present the OLD's sole grant recipient.
Relations between the two bodies are therefore largely concerned
with the drawdown and monitoring of grant, and are governed by
the Grant Memorandum issued by OLD, although informal managerial
contacts exist and are being further developed.
4.3 London Organising Committee for the Olympic
Games (LOCOG)
LOCOG is a Company Limited by Guarantee established
as a joint venture by DCMS, the Mayor of London, and the BOA.
Its job is the planning, organising, staging and monitoring of
the Olympic and Paralympic games. It is the main interface with
the IOC and the IPC and is a party to the Host City Contract.
LOCOG is therefore the operator of the games and is the main point
of contact for the IOC—the "client" of ODA. LOCOG
does not receive grant from OLD but there are, nevertheless, good
contacts between the two organisations.
4.4 Other bodies
The Olympics will also require the ongoing involvement
of the LDA and TfL, the relevant Government Departments (particularly
ODPM and DTp), the five "Olympic" Boroughs (Tower Hamlets,
Hackney, Newham, Waltham Forest and Greenwich) and bodies such
as the Thames Gateway London Partnership, which will all need
to work closely with ODA and LOCOG.
5. RELATIONSHIP
WITH THE
PUBLIC
OLD is acutely aware that it is spending Lottery
players' money and, through Parliament, it is accountable to them.
OLD has a duty to ensure that the lottery-playing public are aware
of what it has done with that money. It does not intend to expend
significant sums in marketing itself or advertising its work but
it is taking steps to secure recognition of the role of the Lottery
in funding the 2012 Games, by inserting clauses in the ODA Grant
Memorandum requiring appropriate recognition by ODA. This is not
a straightforward matter as the Olympic and Paralympic Games have
a high degree of legal protection in the UK and many decisions
relating, for example, to the relationship of Lottery recognition
to the Olympic Brand, are ultimately in the hands of the IOC,
for whom LOCOG effectively acts as an agent. OLD is working closely
with LOCOG and ODA to ensure that there is an appropriate level
of recognition for Lottery funding across ODA's work.
6. DISTRIBUTION
POLICY
S.31 of the Act gives the Secretary of State
power to require OLD to develop a policy for the distribution
of money and to review and revise the policy. The policy must,
in particular:
— Estimate OLD's annual income;
— Specify the sources of that income;
— Specify matters in respect of which
OLD thinks it will/may make grants or loans;
— Estimate, where possible, the amounts
of such grants/loans.
In requiring such a policy, the SoS can include
a provision about the form, or content of the policy.
Drafts must be submitted to the SoS and OLD
must consult the National Lottery Commission, the Mayor, the BOA
and the British Paralympic Association. Completed Policies must
be circulated to the consultees. There is no requirement to consult
the Olympic Board or the London Organising Committee for the Olympic
Games (LOCOG) but OLD can choose to consult whatever bodies it
considers appropriate.
A draft outline funding policy document was
circulated in January 2006. This draft did not contain financial
information as it was not possible at that time to develop a meaningful
financial plan for OLD. Comments were received from the British
Paralympic Association. On 18 July 2006 Board Members endorsed
the outline funding policy, which will be revisited later in the
autumn.
The Policy identifies the Strategic Priority
of OLD as being to assist in the achievement of the four main
themes which the Candidate File stated will underpin the 2012
Olympic Games and Paralympic games.
OLD has adopted Funding Objectives which are
to support those bodies which are tasked with delivering or implementing
the plans of the Olympic Board. In providing funding, OLD will
actively seek to fund activities related to the implementation
of those plans which:
— Ensure the timely and cost-effective
delivery of the 2012 Olympic Games and Paralympic Games;
— Directly relate to requirements incorporated
in the Host City Contract;
— Contribute to the infrastructure
and sports legacy of the games;
— Contribute to a legacy that demonstrates
social inclusivity;
— Support wider Community and Regeneration
benefits;
— Contribute to the delivery of Games
which are Low carbon, Zero waste, conserve biodiversity and promote
environmental awareness and partnerships.
OLD has established an allocated grant programme
to meet the costs of delivery of the capital and infrastructure
element of the Olympic Board's plans. It does not intend to operate
open funding rounds or to solicit applications. OLD will initially
restrict its funding to those organisations which are directly
involved in the delivery of the Olympic plans, which will be eligible
to apply for ongoing revenue support for the overall business
case of the applicant organisation, as it has done in the case
of ODA. Other organisations may subsequently be invited to make
applications but this will be the subject of review at a later
date.
OLD normally pays grants quarterly and in advance,
and seeks to impose the most efficient and effective monitoring
systems possible whilst striving to minimise the administrative
burden on grant recipients.
7. OLD'S
FUNDING PROCESS
7.1 Income and Expenditure Projections
Income
OLD's income (including interest) was £15.7
million in 2005-06 and is projected to be £96 million in
2006-07. Camelot has produced income projections which indicate
how they expect the £750 million to be received over time.
Given the freedom which the Lottery Operator (Camelot) has to
vire income from a range of games into the OLDF stream if necessary,
OLD shares the view that, all other things being equal, £750
million will be raised for the OLDF. OLD does, however, have possible
concerns with regard to cashflow. Although there is some scope
for Camelot to manage Lottery cashflow in the medium term, it
is difficult to do this within a financial year—so short
term cashflow problems can be difficult for them to respond to.
The main area of flexibility in this regard is the ability to
draw on other funding sources in the PSFP early in the year whilst
Lottery reserves are recovering. This is an area which is being
very carefully watched and as budgets mature and become more robust,
the funders will liaise closely to manage cashflow issues.
Expenditure
To date OLD had paid £15 million in grant
to ODA and had incurred just under £94,000 on running costs
since its inception in July 2005. The low running costs were achieved
by running OLD as a very small organisation in its early days,
utilising surplus staff capacity from the Millennium Commission.
ODA are entitled to seek drawdown of a further £60 million
in grant during the year 2006-07 and have indicated that they
expect to do so.
7.2 OLD Grants
To date, applications for grant have been received
from OPSU and from ODA.
OPSU
OLD were asked to fund the running costs of
OPSU (then called the Olympic Board Secretariat). Historic costs
of £792,137 were applied for, and a further grant of £1,237,140
to cover projected expenditure for 2006-07 was sought. The OLD
did not support the principle of funding the OPSU because it was
of the view that the running costs of OPSU as it was then envisaged
constituted a core Government expense and should not be met from
Lottery funds. They believed it was not what lottery funding was
being made available to support. OLD therefore rejected the applications.
ODA grants—
(i) Historic
The initial costs of the Olympic Delivery Authority
had been met by DCMS and they invoiced ODA to cover this "historic
expenditure", which related to the recruitment of the ODA
Board, recruitment and payment of staff, and accommodation. ODA
applied to OLD for grant of £2,616,153 to cover these invoices,
and OLD's Board approved the grant on 4 May 2006. In making this
grant the Board of OLD were aware that a further application may
be made for historic costs in the region of £200,000. They
agreed to consider such an application but emphasised that they
would not determine any other applications for historic costs
after that point. The Historic grant has not yet been paid to
ODA as they are still seeking outstanding supporting information
from third parties.
(ii) Interim
The Olympic Delivery Authority also applied
to OLD for an interim grant to support operations in the year
2006-07. The grant was sought to enable the ODA to continue its
operations whilst their Corporate Plan was being developed, and
to permit essential time-critical development work to progress.
ODA estimated that their cash flow requirement for the year was
£233.4 million, comprising £224.2 million to fund their
activities; £8.5 million for repayment of expenditure incurred
by TfL and LDA of their behalf in 2005-06; and a working capital
balance of £0.7 million. £101.3 million of this would
come from Central Government and £132.1 million from the
PSFP, of which £2.1 million would come from Sport England
and £55 million from the GLA. The £75 million balance
of the PSFP contribution was sought from OLD.
OLD considered the application on 4 May 2006.
They noted that the Corporate plan and associated business case
which ODA intended to deliver during 2006-07 would be the basis
of the main grant application ODA would make to OLD. The Interim
Finance Director of ODA was present and was questioned on their
financial plans. We would normally expect to award such a grant
against an approved business plan but Board members were told
that long term plans, and the business plan for 2006-07, could
not be finalised at that time. While the Board were concerned
that the business plan for 2006-07 was not in place they did have
access to the approved budget and judged it prudent to make an
interim grant to allow essential work to be taken forward. The
interim grant is therefore conditional on the 2006-07 business
plan being made available to OLD by November 2006 at the latest,
as the Board had originally expected to receive the business plan
earlier in the year. On the basis of the latest reports from ODA,
we understand that this condition will be complied with.
Terms and Conditions of Grant
In addition to the specific condition outlined
above, OLD's commitment to pay grant of up to £75 million
to ODA was subject to general terms and conditions set out in
a Grant Memorandum issued to ODA on 3 August 2006. The Grant Memorandum
governs the use of funding obtained from OLD. The general aim
of the Memorandum is to ensure proper and effective use of Lottery
funds by ODA, applied to achieve the agreed purpose, and drawn
down in accordance with an agreed schedule on the basis of need,
to maximise cost efficiency.
The framework is the standard one for NDPB sponsorship
and set out the mechanisms by which OLD would oversee its grant,
the sanctions at OLD's disposal, and the obligations OLD was placing
of ODA. OLD has six main tools to ensure that its objectives in
giving grant are being achieved, ie:
(i) a corporate plan produced by ODA each
year, demonstrating that the company has coherent operational
and financial strategies for the medium term. It is the OLD's
intention to appraise the plan in detail, especially the lifetime
budget and critical path, drawing on independent consultancy support
from specialist advisers;
(ii) a programme for the immediate year ahead,
defining the key milestones and their target dates;
(iii) budget for the immediate year ahead,
demonstrating that grant will be drawn down within prudent financial
forecasts;
(iv) quarterly grant claims supported by
financial monitoring information, to demonstrate that grant is
being drawn down in accordance with need within the budget and
providing certification that the terms and conditions of grant
have been and will be complied with;
(v) a requirement for the Commission to approve
novel or contentious expenditure by ODA, following systems checks
to ensure that expenditure is incurred necessarily and consistently
with the strategies and objectives set out in the business plan,
and that proper procedures have been followed to achieve value
for money; and
(vi) progress reporting, monitoring and audit
to check progress , ensure that the grant terms are being complied
with and confirm that ODA is conducting its financial management
properly, as a public body. The main methods for achieving this
are progress reports and meetings.
The memorandum reserves for OLD the discretion
to terminate or withhold grant in certain circumstances but its
key purpose is to ensure that this is unnecessary, by establishing
clarity and transparency in the relationship between OLD and ODA.
Whilst it secures OLD's legal position, the Grant Memorandum is
made as simple and unoppressive as possible. OLD's intention is
to achieve a clear understanding of the work of ODA primarily
by establishing a close and transparent relationship.
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