GIFTS Contents: Scope Key Points Background Finance Approval Budget Act Authority VAT Record of Gifts Reporting in Accounts Sponsored Bodies Hospitality Gifts
Scope 1. This section gives guidance on the procedures to follow where gifts of cash or other resources are either made or received. The guidance is aimed primarily at the constituent parts of the Scottish Administration (including the core Scottish Government and Executive Agencies). However, other organisations to which the Scottish Public Finance Manual (SPFM) is directly applicable, including bodies sponsored by the Scottish Government, must ensure compliance with any relevant provisions and arrange for procedures consistent with the guidance to be put in place.
Key Points 2. The prior approval of the relevant portfolio Finance Team is required for the making of any gift not covered by a specific delegated authority. Gifts made should, where practicable, be authorised by Budget Act (as revised by Budget Amendment Order) and Budget Documents should be appropriately footnoted. 3. Where it is not practicable, for reasons of urgency, to secure Budget Act authority gifts made by the Scottish Government may be undertaken using Ministers' contingency powers. 4. Gifts made by the Scottish Government should be reported in notes to the annual accounts. Individual gifts of more than £250,000 should be noted separately.
Background
5. A gift is something voluntarily given or donated without the expectation of receiving anything in return and generally without preconditions. In the context of this guidance gifts made by the Scottish Government (SG) can be defined as: payments to individuals or bodies other than grant or grant in aid or payments made in the normal course of business; the extent to which assets are sold or transferred (including the sale or assignment of leases) to individuals or bodies at less than market value i.e. the best price reasonably obtainable in the market; income foregone where individuals or bodies are given the use of SG resources at concessionary rates; and other transactions which are virtually indistinguishable from gifts e.g. the loan of an asset for its expected useful life.
6. In the context of this guidance gifts received by the SG can be defined as the donation of cash or other resources with a current market value. 7. Losses and special payments should not be regarded as gifts. Nor should any transfers or transactions between constituent parts of the Scottish Administration. However, transfers or transactions of the sort described in the preceding paragraphs between the SG and UK Government Departments or other public bodies should be regarded as gifts with the exception of any transfers of assets related to transfers of functions.
Finance Approval 8. The prior approval of the relevant portfolio Finance Team is required for the making of any gift not covered by a specific delegated authority.
Budget Act Authority 9. Gifts made should, where practicable, be authorised by Budget Act (as revised by Budget Amendment Order). Under Resource Budgeting the resource costs of gifts made by the SG score against the Delegated Expenditure Limit (DEL). Gifts of cash received by the SG may, where appropriate, be scored as retained income subject to the existence of the necessary powers to undertake the activity giving rise to the expenditure. 10. The Parliament should be made aware of any transaction outside the normal course of the SG's business. Budget Documents should therefore be footnoted to the effect that £X of Y budget relates to a gift made in respect of Z. In the case of a particularly large or potentially controversial gift, business areas, in liaison with their portfolio Finance Team, should consider the need for a separate report to the Parliament's Finance Committee and relevant Subject Committee. 11. Where it is not practicable, for reasons of urgency, to secure Budget Act authority gifts made by the SG may be undertaken using the Scottish Ministers' contingency powers - provided that these are available. Ministers' contingency powers are described in the section on Expenditure without Parliamentary Authority. This would normally involve Ministers laying a report before the Parliament at least 14 calendar days before undertaking any relevant gift in accordance with a Written Agreement between the SG and the Parliament's Finance Committee. The report should set out briefly the nature of the gift, its value, the circumstances in which it is being given, and the recipient. Should the requirement to use the power arise during a recess, a report will be presented to the Parliament as soon as the Parliament returns from recess.
VAT 12. Business areas should be aware that making gifts of goods with a current market value in excess of £50 may have VAT implications for the SG. Advice should be sought on a case by case basis from the Financial Management Branch.
Record of Gifts 13. Business areas should ensure that Finance Teams are made aware of all gifts made or received to enable them to maintain a record and to assist with the compilation of notes to the annual accounts. Business areas should also arrange for Property Advice Division and the Financial Reporting Unit to be informed of any gifts involving fixed assets to enable the SG Property Database and the SG Fixed Assets Register to be updated.
Reporting in Accounts 14. Gifts made by the SG should be reported in notes to the annual accounts. Individual gifts of more than £250,000 should be noted separately. Gifts received by the SG need not be noted in the accounts unless there is a particular reason for bringing them to the attention of the Parliament. The Government Financial Reporting Manual provides for the specific treatment of assets donated by third parties, either by gift of the asset or by way of funds to acquire assets.
Sponsored Bodies 15. The arrangements for bodies sponsored by the SG making gifts within specified limits should be set out in the framework document (Management Statement / Financial Memorandum) and any proposals to make gifts in excess of these limits should be approved by the sponsoring unit in consultation with the relevant portfolio Finance Team.
Hospitality Gifts 16. Guidance on the acceptance of gifts, etc by individual members of staff and Ministers is included in the SG Staff Handbook and the Scottish Ministerial Code respectively. Guidelines on the Provision of Hospitality by Officials is available on the SG Intranet. Back to top Page Published/ Updated: September 2007 |