Compliance is a central tenet of the Quality Framework and applies to all relevant legislation and charities regulations where appropriate. In particular, the obligations placed on directors by the various Companies Acts and Insolvency Acts must be adhered to.
You will also be required to acknowledge Scottish Arts Council funding in all your publicity (you will receive a Credit Kit explaining how you can do this). Failure to credit the Scottish Arts Council will affect payment of your grant.
We would expect all organisations to comply with the following, as basic financial good practice
- The board reviews financial matters regularly
- Accurate management accounts are produced at least quarterly for the review by board
- Annual accounts are audited*, solvent (ie no negative reserves) and have a reasonable cash position
- Budgetary control and monitoring procedures are specified and maintained
- All policies and procedures comply with statutory and organisational requirements and guidelines
* The Scottish Arts Council accepts accountant’s reports from organisations below the threshold of statutory need ie gross annual income of less than £500,000 or assets under £2,800,000. We recognise that there is no statutory obligation by organisations with an income below £90k to produce accounts, but would expect funded organisations to provide us with accountant’s reports annually. We would also expect quarterly management accounts.
We expect funded organisations to remain solvent during the period covered by our grant and to pay all debts as they become due. Your attention is drawn to the duties imposed by the Insolvency Acts and related legislation as set out in our booklet Care, Diligence and Skill. Neither the Scottish Arts Council nor any of its members, advisors, or officers can in any way be held responsible for the affairs of your organisation.
Accumulation of provisions and reserves is encouraged as long as these aim to support activities which come within the scope of our subsidy and are reasonably required to aid financial management of the organisation.
Organisations in receipt of funding, must consult with the Scottish Arts Council about any proposals to distribute assets and/or surplus available on winding up.
Risk Register must be agreed at board level and maintained to contain a list of potential risks that could affect the organisation.
- Charities should refer to the Charity Commission
- Other businesses will need to comply with requirements of the Companies Acts which mirror the charities guidance.
The business review from the directors must address risk . The Scottish Arts Council will expect compliance with guidance from Charities Commission and Office of the Scottish Charities Regulator (OSCR) and companies legislation. We would recommend that all boards review risk at least annually and document their review process. All potential risks should be evaluated by the likelihood of occurrence, possible impact and suitable counter-measures recorded for all potential risks.