Arrangements for financial management

Banking Arrangements for Commons Association and Commons Stewardship Groups

For ELM schemes the Agreement Holder will be the Commons Association or Stewardship / Graziers Group. This is the same as most HLS and CS Agreements.

Proper financial management of these payments received is essential to ensure funds are safely received, correctly distributed, accounts can be examined and reported on. It is also necessary that procedures and provisions are in place in the event of a breach in the scheme resulting in a penalty or reclaim from the Rural Payments Agency.

The arrangements for financial management should be set out in the internal agreement between the parties. This should include:

• Bank Accounts

Decision to Make: Should the Association / Group have its own bank account or use the regulated client account of a land agent, accountant or solicitor? There are pros and cons to both so consider what works for your circumstance. Click below for more information about these advantages and disadvantages.

• How many signatories are required to make payments?

  These funds are public funds given for the delivery of public goods and are to be split among a number of parties and should be treated as funds held on trust. It is recommended that two non connected parties are required for all payments. This a) reassures beneficiaries that proper oversight occurs, b) protects those authorising the payments c) allows any errors to be picked up before signing.

• Management of Funds

  The Association / Group may wish to undertake the calculation of payments themselves but it is advised that as most officers have a personal financial stake in the scheme that an independent bookkeeper / land agent or accountant is used to as a minimum review the schedule before distribution. This reduces liability to the Officers.

• Schedule of Distributions

  Each time a distribution of payments each party receiving a payment should be sent a schedule of the distribution with full transparency of who received what. Full disclosure encourages confidence in management and also allows errors, if any, to be picked up.

• Annual Examination of Accounts

  Most internal agreements will require the Association’s accounts to be independently examined by an accountant / bookkeeper and for the accounts to be presented to all group members. This is good practice to keep the books transparent and is a time for an annual review of funds held and any remaining obligations such as maintenance of capital works.