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How to manage a project underspend

A few Fair Share Trust (FST) areas have experienced leftover funding from their grants in recent months. Though an underspend is not anticipated as an ideal outcome, it is not always a negative thing and if the issue is dealt with appropriately the funds can be used to further benefit the area. Wales Community Foundation, Local Agent for Fair Share Trust, experienced underspend in the Wrexham area, read on about their strategy to re-allocate the funds.

Helen Fagan from the Community Foundation Wales shares her experiences below.

1

Why did the underspend occur?

The Wrexham Refugee ESOL Project was awarded £88,516 of which they claimed £81,080.55, leaving £7,435.45 of their committed value unspent. As the project had finished and the staff involved had left the organisation, there was no option of extending the project. The money was therefore put back in the pot for the local panel to review and re-allocate.

2

What solutions did you propose?

18 months ago it was decided that the panel would review the priority and impact achievements to date and identify gaps that FST funding had not had the chance to broach. The panel also looked at previously funded projects and their current status to see whether with a bit more budget they could succeed in achieving sustainability as set out in the FST objectives.  Those projects identified as prospects for receiving the remaining budget were commissioned to complete a proposal in the first instance, which was then discussed at a panel meeting to develop the potential applicant’s ideas and probe into areas of concern or help determine the focus of the project. These interested parties were then invited to submit a full application for funding.

3

How will you efficiently implicate solutions?

A detailed timetable of claims is kept within my spreadsheets for the remaining projects and if any group is delayed in claiming (or submitting justified claims or monitoring reports) I will chase them until I get the information required.

4

What further challenges did you face?

With the length of time that the local panel has been operating they have become a very strong unit. However, these conversations demanded strong leadership from ourselves as Local Agent underpinned by a clear vision for the local priority and always having an eye on achieving sustainability. The Foundation had encountered similar situations previously - despite good planning it is extremely rare for everything to go exactly to plan, particularly with projects that are multi-year. The Foundation has therefore seen the benefits of being a flexible donor and nurturing projects whilst balancing the commitment to the client.

5

What advice would you give to local agents to prevent the problem?

We had conducted an exercise with the panel approximately 18 months ago to review the programme and identify any gaps which had allowed us to focus our final spend. This proved extremely useful when we had the unexpected budget remaining. A strong panel with a good amount of local knowledge and a good knowledge of the issues which the priority addressed is also invaluable as is a relationship of trust and collaboration and a focus which is needs based.

6

Other examples and learning from FST areas

Ashfield

A group funded by FST in Ashfield had an underspend from a volunteer coordinator post that was mismanaged. The local panel requested an audit of the project and the Local Agent held the funds. However, the panel was keen to help the group rather than simply claw back the money, so they established a new grant agreement that set actions/targets for realistic volunteer development that the group could achieve, along with monthly monitoring. 

Darlington 

Predicting possible small underspend across projects and realizing the need for further support and capacity building and training; the Local Agent developed a sustainability small grants scheme.  It allocates funds to make awards for specialist training and will incorporate any under spend from projects in the area.

Doncaster

The Local Panel is looking to reallocate an underspend into to a small capital project to purchase play equipment for a park.

Waveney

The Local Agent plans to link the underspend to the sustainability work by offering small grants up to £200 to funded groups for marketing purposes. Organisations would, via a very simple application form, indicate how the fund would benefit them, particularly in relation to their medium to long term sustainability.

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Page last edited Jul 05, 2017 History

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