Annual Report and Accounts 2009-10 - Welfare Reform impact ...

i) Grants to individuals
Grants to individuals are discretionary grants made within the terms of
the Trust Deed. Grants are paid four-weekly in arrears on the basis of
authorised awards. Amounts due but unpaid at the end of the financial
year are accrued in these accounts. The accrual is calculated from the
awards made by the end of the financial year but not fully paid up to the
end of the financial year.
Unused grants returned by individuals in the normal course of business are
recognised on receipt and there is no accrual for potential future returns of
unspent grants.
j) Formal recovery of grants to individuals
Although grants to individuals are discretionary payments, formal recovery
is sought where the provision of incorrect information has led to incorrect
payment or where the grants have not been used for the intended
purpose. The ILF seeks to recover all amounts where it is cost-effective
to do so unless it will cause hardship to the individual. Recovery
procedures appropriate to the value and circumstances of the case
are used, in accordance with the ILF’s guidelines and procedures.
A receivable is only recognised in the accounts when it has been agreed
with the individual and there is considered to be a reasonable prospect
of recovery. For the recovery of sums over £4,000, the ILF obtains a signed
settlement agreement from the individual to support the existence and
valuation of the amount receivable.
The receivable recognised is disclosed as a reduction to expenditure in
the year in which it is recognised. Receivables are assessed at the end of
each accounting period and reduced to the estimated recoverable amount
where there are circumstances that indicate full recovery is uncertain.
The recoverable amount is discounted to present value where material,
at the standard Treasury rate of 3.5% (3.5% for 2008-09).
This accounting policy was introduced from April 2008 to reflect the formal
recovery process established for the ILF. Prior period figures have not been
restated because the work required to provide management estimates was
not considered to be cost-effective.
80 Independent Living Fund (2006)