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

10 Financial instruments and associated risks
As the majority of the ILF’s cash requirements are met through grants
in aid, financial instruments play a more limited role in creating and
managing risk than would apply to a non-public sector body. The majority
of financial instruments relate to contracts to purchase non-financial items
in line with the ILF’s expected usage requirements, so the ILF is exposed
to little credit, liquidity or market risk.
Financial assets – loans and receivables
31 Mar 2010 31 Mar 2009 1 Apr 2008
£,000 £,000 £,000
Grants under formal recovery 1,054 1,103 -
Cash and cash equivalents 11,599 7,307 7,970
Other receivables 7 11 48
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12,660 8,421 8,018
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Grants under formal recovery: For individual amounts over £4,000, a signed
settlement agreement is held to minimise the risk of non-recovery. Further
details of the risks related to grants under formal recovery are provided in
note 11.
Cash and cash equivalents: Represents money with Lloyds TSB held
in current accounts to minimise the risk.
Other receivables: Represents moneys due in the short term and
generally expected to be received within three to six months.
Receivables are used to offset the amount of grant in aid required for
the following month. The ILF is therefore not exposed to risks related to
non-receipt whilst there is sufficient funding to meet the expected cash
requirements throughout the year. Forecast cash payments are monitored
actively in year to ensure demand remains within the available funding.
88 Independent Living Fund (2006)