LOCAL ASSOCIATIONS have reacted strongly against plans from Great George Street to reduce their grants and encourage them to spend their individual bank account reserves.
Following the ICE's 1998 audit, concern was raised over large sums of money which have been left in local association bank accounts without being directly monitored by Great George Street. Some of the money is profit raised from local association events, but most of the balances represent money allocated in the past by the ICE in cash transfers which has not been spent.
In the past, LAs have kept their own accounts, with the ICE making annual grants to each. This system has now been altered, partly in response to the new SORP (Statement of Recommended Practice for Charities) which the ICE must comply with by law.
SORP states that branch expenditure and income must be consolidated into the ICE financial statements, where it is audited. The ICE has proposed to reduce the budgets of the LAs to allow them to spend their reserves. Profit raised from local association events would be kept centrally but allocated back to the associations who raised it.
Chairman of general finance policy committee Norman Haste told Council: 'We must remember that the local associations' membership is created by the Institution. We are one body but we are in danger of becoming 16 fragmented units. Fund managers can invest the money far better centrally.'
However, the LAs have perceived the proposed move as an unnecessary budget cut and an attempt by headquarters to lay hands on money raised by local entrepeneurial activity. Territorial member for the South East Peter Cousins told Council that the proposed plans have 'caused some real problems at grass roots level. We have had our schools liaison budget cut.'
ICE president George Fleming said: 'We should be absolutely encouraging schools liaison. We have a lot of money in the banks which has sat there for many years and should be used.'
He continued 'I'm very keen to ensure we have a performance-related budget plan. I would like to encourage an enterprise culture in the LAs and at the ICE.'
Fleming returned the paper explaining budget changes to the chief executive with the recommendation that it be discussed by a small group including some local association treasurers. Council approved the principle of restricting grants to local associations, obliging them to spend their accumulated cash balances. It also agreed in principle that any money raised through LA events should be reallocated back to the individual associations.