Finance

Ordinary grants

Your local institute is funded by the CII on an annual basis via an ordinary grant, paid in two tranches – the first in January and the second in July / August.

This Ordinary grant is paid in accordance with Article 6 of the CII’s Charter which states:

The Institute shall support the activities of independent insurance institutes which have been or may be established locally in any part of the United Kingdom, the Channel Islands or the Isle of Man by Members and which have been approved by the Council insofar as those activities will further the objects of the Institute. In particular the Institute shall contribute annually to the funds of each such independent institute a grant at a rate or rates to be decided from time to time by the Annual General Meeting and may make such other contributions as the Council may from time to time determine.

Terms of grant provision: Each institute must meet specific reporting and audit requirements set out across Network Know-How to ensure sufficient financial controls are in place to safeguard CII grant income and ensure expenditure meets specific grant requirements.

Please note for 2021 local institutes have been asked to consider an alternative funding proposal due to the ongoing pandemic.

More information can be found here.

Special grants

Please note a revised special grant process for 2021 will soon be communicated to all local institutes via Network News. For more information contact your Regional Membership Manager.

Special grants

In addition to the ordinary grant awarded each year, local institutes may also apply for a secondary grant known as a special grant.

A special grant is to cover planned exceptional expenditure that cannot be met by the ordinary grant and are only awarded for exceptional expenditure.

Due to the revised funding proposal for 2021, special grants can now be applied for throughout the year. These are provided as a one-off payment and are awarded on a case-by-case basis.

Applications are subject to review by the Local Institute National Forum, and CII Board approval.

Examples of the types of activities local institutes apply for are as follows: development of regional conference, increase in local CPD activities, local employer engagement, qualification uplift initiatives, centenary celebrations, and the development of groups such as young professional committees.

Please note that special grants will not be awarded to cover institute staff and office costs.

Before submitting a special grant application, local institutes should firstly assess the level of accumulated reserves to ensure these do not exceed six months operating costs. Where they do, the CII would look for these funds to be utilised in the first instance and any successful special grant application would be adjusted accordingly.

To apply for a special grant, you need to submit the special grant application form below - the form is fully interactive - simply type into each box.

Please return completed application form to specialgrants@cii.co.uk

If you need more information simply contact your Regional Membership Manager. Please note you will receive a response to your application within ten working days.

Calculation, payment dates, and adjustments

The ordinary grant is performance related, in line with protocol developed by local institute volunteers and now overseen by the Local Institute National Forum.

A grant of up to 14% of membership income attributed to a local institute can be paid annually; this is based on an institute’s membership calculated at June month end in the prior year - (e.g. 2020 grant based on membership volumes and income at 30-06-19).

The percentage of grant awarded is either 10%, 12%, 13% and 14% based on the previous local institute assessment score.

Institutes are allocated into three groups depending on size of their membership (≤1000, 1001-2000, ≥2001) and the assessment scores are compared within these peer groups. An institute will be awarded a grant of either 10%, 12%, 13% or 14% of their membership income depending on their performance within their specific peer group.

As previously stated, the annual grant is paid in two instalments; the first instalment is 50% of the annual grant and is paid at the end of January. The second instalment is 50% of annual grant less any reserves adjustment (see below). This is paid in July/August (dependent on how quickly institutes return their annual financial returns).

Reserves adjustment

The ordinary grant is intended to meet the day to day operational requirements of local institutes and are not intended to be carried forward to future financial periods. The CII obviously recognises the financial necessity to keep a level of reserves as a contingency – e.g. available for unintended budgetary requirements or to cover short term cash flow requirements.

To avoid the unnecessary and inefficient build-up of reserves the CII will make an adjustment to the second grant instalment should a level of reserves exceed 12 months of an institute’s operational expenditure.

These reserves and operational expenditure (operational being CII grant expenditure, i.e. excluding social event expenditure)are taken from the latest complete financial period; if operational expenditure exceeds the level of reserves the second grant instalment will be reduced by 50% of the excess.

Reporting requirements and record keeping

The CII expects each institute to keep accurate accounting records of all CII grant expenditure – i.e. amounts and details as well as underlying invoices and receipts. Annual financial accounts and other annual returns are expected to be received by CII HQ by 31st May of every calendar year – this includes an end of year bank statement.

There is a standard format that the CII annual return should take and can be found within the MYLI tab.

An accounting tool is also available for all local institute treasurers and is encouraged to be used to record all financial transactions of the institute. This tool also links automatically to the CII annual return.

If this tool is used this would be the only finance document (along with end of year bank statement) to be filed to CII HQ subject to the required audit/review requirements detailed below.

If this tool is not used a local institute is expected to file with CII HQ annual financial accounts in a recognised accounting format and the CII annual return by the 31st May of each calendar year.

Financial controls

Institutes are required to ensure that CII grant monies are not misappropriated and are spent according to the terms outlined above.

A secure financial control environment should be created, including but not limited to:

Dual sign off/approval on any outgoing payments – e.g. online banking/cheque/DD setups
Quarterly committee review of all institute financial transactions for the period
Sign off from officers independent of those producing the records and/or conducting the payments

The CII appreciate some institutes, due to resources available, will operate with sole users controlling outgoing payments, it is imperative in such an environment that quarterly reviews, at the least, are conducted and recorded by independent officers of the institute.

Audit and review requirements

The treasurer shall keep or cause to be kept a proper account of the receipts and payments of the Institute and of the matters in respect of which such receipts and payments take place and the property, assets and liabilities of the Institute, in the form agreed by the Council, and shall submit a statement of accounts to the Council for adoption at each AGM as part of the Local Institute’s annual returns.

The accounts of the institute made up to the end of the financial year, which unless the Council otherwise determines, shall end on 31 December. For institutes with incomes above £250k, these accounts should be audited by a professional auditor.

For all other institutes, the accounts should be independently examined by an individual who is a member of one of the UK’s accountancy bodies, with the exception of Institutes with an income of less than £7k who may appoint an examiner who is not a member of one of the accountancy bodies but who must demonstrate sufficient financial awareness, numeracy skills and relevant experience to carry out the work and make the judgements required.

Local Institute Accounts Tool

Local Institute Accounts Tool

The LI Accounts Tool is now established as an effective and user-friendly way to record an institute’s income and expenditure, as well as act as your annual financial return. We are pleased to see that the majority of local institutes now use the tool.

If you do not currently use the Accounts Tool, we request that you adopt it for your institute’s accounts for 2021.

Why? Because the tool brings benefits to you as local treasurers, and to us in being able to assess a consistent set of financial annual returns. You save time on your end-of-year tasks and the tool facilitates your annual return.

The 2021 version, and the User Guide, can be downloaded below for you to customise to your institute and start using.

In addition, please note the additional tips below:

1. READ THE INSTRUCTIONS PAGE (Instructions tab) and follow the 8 step instructions - Set up your bank(s) details properly (Bank Accounts tab) and insert the name of your LI because it activates all your further or future activity in the tool. If you don’t, it won’t work.

2. Close down your year-end accounts by checking off all items appearing on the end of business day bank statement. When complete, check that your accounts balance i.e. the bank account balances match the balances shown on your accounts on the tool. If not, the tool will highlight the discrepancy in red on each account that does not match, to allow you to identify the items missing and reconcile your accounts successfully.

3. Remember, while you are only ever reporting the current activity in any given year (1st January to 31st December), the tool creates a rolling process, to ensure outstanding items from previous years are not forgotten.

4. Year-end can be a very busy time for LIs where accounts transactions are concerned, particularly where transactions straddle the old and new year, so you need to transfer the “outstanding” items on to your new year’s tool, prior to any further work.

5. To do this, you can filter the appropriate items and copy and paste the transactions to your new 2021 spreadsheet:
At 31/12 close your bank and copy over all ‘N’ items (accepting that 'N' in the cleared bank cell on the income worksheet identifies this as a debtor’s item, and 'N' in the cleared bank cell on the expenditure worksheet identifies a creditor’s item).
So, therefore, you copy the 'N' items from the 2020 income worksheet to the 2021 income worksheet and the 'N' items from the 2020 expenditure worksheet to the 2021 expenditure worksheet.

6. It is advisable to do this immediately, as you may get confused if you wait until the items appear in the bank. NOTE: you DO NOT go back to the 2020 tool and update any 'N' items to 'Y' items.
There should be no alterations to the previous year tool once you have transferred the 'N' items and reconciled the year end.

It is important that you check that all bank entries have been entered and you are reconciling your bank statements regularly.

7. Transactions should be attached to the year of activity, not the year the transaction is raised.

8. If users fail to enter which bank account a transaction relates to (column C in ‘income received’, ‘payments made’), there is potential for this to flow into any bank account tab which does not have a selected bank account and further into the CII annual return). This column is highlighted as mandatory but please be aware as it is a potential area for error.

The Accounts Tool presented is ‘locked’, as it is important that the key elements and components are not altered, as this will affect how we assess and analyse your financial returns. We do however understand that some of you may wish to adjust column widths etc., so if you wish to make cosmetic tweaks, you can unlock by using the password ‘dp’. Please do not change any fundamental components or formulae.

Auditing with the Accounts Tool
The Accounts Tool is self-checking, however in line with guidance provided in the local institute model constitution, it is advised that all institutes, apart from those with an income below £7k, will be required to have their accounts either audited by a professional auditor or independently examined by someone who is a member of one of the UK’s accountancy bodies.

This is consistent with the approach taken by other organisations and seeks to protect the Institutes’ key officers and particularly the Treasurer who are handling large sums of money on behalf of Institute members:

• Income above £250k: audit by a professional auditor.
• Income £7k-250k: accounts independently examined by an individual who is a member of one of the UK’s accountancy bodies.
• Below £7k: accounts examined by an individual who must demonstrate sufficient financial awareness, numeracy skills and relevant experience to carry out the work and make the judgements required.

If you have any questions or need support in using the Accounts Tool, please contact matt.ward@cii.co.uk

2021 Accounts Tool

LI Accounts Tool User Guide