Charities - Accounting for grants on behalf of service users

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Hi

As a charity we have a situation where we can be applying for a small grant on behalf of one of our service users.
Such grants are awarded only to the referring organisation as individuals are not allowed to apply.

I was curious as to the best way of accounting for this if;
1. We receive the grant then distribute to the service user in cash or cheque to buy the equipment?
2. We receive the grant then by the equipment on the service user's behalf?

Many thanks
 

Fidget

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The conditions of application should tell you how you have to do it. By the sounds of it though, the grant is actually awarded to the organisation rather than the individual, but for use on that individual. In which case account for it in the normal way of accounting for grants based on the conditions of the grant (look up FRS102 - Government Grants in UK GAAP for more info, or IAS20 for international standards. Doesn't need to be a Gov grant - the same principles apply to all grants.)

If there's no such stipulation, then you could just pay it over to them if you want, although that method is ripe for fraud, so having the organisation see it through would make sense. Mind you, this is the UK - any lunacy is possible! :D
 

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