Accounting for your grant

Accounting for your NZCT grant

What do we need to do if our grant is approved?

NZCT has a legal obligation to check the grant funds we’ve distributed have been used for the purpose for which the funds were granted. We need all grant recipients to send us copies of appropriate documents that show us how and when their grant money was spent. We call this our ‘accountability’ documentation.

We would appreciate it if you would reconcile your accountability documentation before you send it to us. If there is a discrepancy between the amount charged and the amount paid, you’ll need to provide an explanation and documentation to support this.

Do we need to account for funds received?

All NZCT grants must be accounted for within 90 days of receiving the funds. If you need longer, call our accountability team on 0800 44 69 28 to discuss your options.

What is an ‘authorised purpose’?

‘Authorised purpose’ is the purpose, such as sports uniforms or a coach’s salary, which we’ve agreed to fund and the grant money must be used for only that purpose. If the money is spent on other things, we will ask for a refund. Your grant approval letter will detail the specific items we have agreed to fund. Ensure your grant is used to buy only these items.  

Can we amend the authorised purpose?

We’ll consider changing an agreed ‘authorised purpose’ only in exceptional circumstances. Send us a written request for such a change before you spend any of your grant money.

What are appropriate payment types?

All grant money must be spent by cheque, credit card or electronic transfer through your organisation’s bank account. We can’t accept receipts for cash payments. 

Any costs incurred or payments made before your grant was approved, including any payment made by a third party on behalf of your organisation, can’t be funded after the fact. We won’t accept any accountability documents that show retrospective dates. You’ll be asked to refund these grant funds.

Who are appropriate payees?

If a member of your organisation pays for the goods or services for which NZCT funding has been approved, and then they seek reimbursement, this is classed as a ‘third party’ payment. We prefer you don’t use a third party to pay the invoices for your grant items. However, we understand that there are times when you have no option.

In this case, we require:

  • a tax invoice
  • the third party’s bank statement showing that he/she has made the initial payment
  • the organisation’s bank statement showing the reimbursement to the third party.

 

What is appropriate documentation?

Tax invoices and bank statements are appropriate accountability documents, but quotes, receipts, pro forma invoices, ledger reports and Excel spreadsheets are not. When accounting for your grant, the following documentation is required. 

  • For goods or services (e.g. sports uniforms, accommodation), we need to see tax invoices and bank statements showing all or full payment(s) of the invoice you are claiming.
  • For salaries, we fund the gross amount as per the employment agreement submitted with your grant application. Even if you use a payroll company (e.g. Datacom or I Payroll) to administer your salaries, we require an IRD Schedule (IR345 and IR348), a bank statement showing all wages paid each month and a bank statement showing the PAYE paid. If the wages are paid in a bulk amount, we will require copies of the batch list making up the bulk amount, so we can see the funded employee’s payment.

If you are claiming only part of any given month, you must give written clarification of this, but still provide a list of all wages paid, so we can reconcile them against the gross amount in the IRD return. 

For cumulative grants of $100,000 or more in NZCT’s financial year, we will need confirmation from the recipient’s external auditor (a chartered accountant with a certificate of public practice) that funds were used only on the authorised purposes approved and that any amount unspent has been returned to NZCT. The threshold for this requirement was raised from $50,000 to $100,000 in the February 2017 review of our grants criteria.

If our grant is to pay a salary and the employee leaves, can we spend the grant money on the new employee’s salary?

Generally, yes. However, you must let us know about this change so we can approve it. Just send us written confirmation of the change of employee and a copy of the new signed employment agreement and we’ll confirm the change is okay from our end. You’ll need to supply details, such when the original employee finished and when the new one started in the role.

What accountability documentation do we have to provide if our grant is for contractors’ fees?

We will need to see a copy of the contractors’ invoices to the grant recipient. We expect these invoices will contain, at a minimum:

  • the words ‘tax invoice’ in a prominent place
  • the name, address and GST number of the supplier (the contractor)
  • the name and address of the customer (the grant recipient)
  • the date of issue
  • a description of the goods and services and their volume (e.g. hours of labour, number of items)
  • the GST-exclusive price, the amount of GST charged and the GST-inclusive price.

If the contractor or supplier isn’t GST registered, which they must be if their annual turnover exceeds $60,000, we want to see equivalent documentation, including the supplier’s IRD number instead of their GST number. A supplier who is not registered for GST mustn’t charge GST. 

What about funding given to schools?

When a school receives funding from NZCT and they use an outside provider to pay their accounts (e.g. Education Services), we need copies of their bank statements showing they have on-paid the funds to the supplier.

Can we use suppliers who are not quoted in our application?

Generally yes, but you must contact us to advise of this change and the reason why it’s necessary before spending the grant funds. The items you want to buy must be the same as those specified in your grant application.

What do we do if the purchase price is less than the amount funded?

You must return the difference to us. Likewise, you must return any unspent funds. You can do this by depositing the excess funds into our bank account or by sending a cheque to NZCT, PO Box 10857, Wellington 6143. If you need our bank account details, call us on 0800 44 69 28, option 3.

Can we spend any remaining funds on other items?

Any unspent funds must be returned to NZCT. Your grant has been approved on the understanding that the funds will be spent only on the items detailed in your grant approval letter. If you want to buy other things, you’ll need to send us a new grant application for them.

When is a refund needed?

We will ask you for a refund if your grant funds have been spent on:

  • items that haven’t been specifically authorised (refer to your grant approval letter to see which items have been approved)
  • retrospective payments (i.e. your grant funds have been used to pay for goods or services that were bought before your grant was approved)
  • items that have been funded by another trust (we call this double dipping – where applicants apply to more than one trust for the same items)
  • items where the purchase price is less than the amount granted.

What is a retrospective payment?

A retrospective payment is where your grant funds have been used to pay for goods or services that were bought before your grant was approved. We don’t fund retrospectively. Any funds granted for items that have already been paid for will have to be refunded. 

Do I claim the GST-inclusive or GST-exclusive amount of my invoices?

If your organisation is GST registered, you can claim the GST-exclusive amount of the invoice. If your organisation is not GST registered, you should claim the GST-inclusive amount of the invoice.