Terms of reference – Charitable funds committee

1. Constitution

North Tees and Hartlepool NHS Foundation Trust was appointed as Corporate Trustee of the Charitable Funds under transfer order SI 2002 (Number 2271) and its Board of Directors serves as its agent in the administration of the Charitable Funds held by the Trust.

The Committee has been formally constituted by the Board of Directors in accordance with the Trust’s Standing Orders, with delegated responsibility to monitor arrangements for the control and management of the Trust’s Charitable Funds and will report to the Board of Directors.

2. Membership

The Committee will comprise and include a minimum of three Non-Executive members of the Board of Directors, one of which will be the Chairman of the Charitable Funds Committee. The Committee will also comprise of two Executive members of the Board of Directors, the Chief Executive and the Director of Finance.

The Charitable Funds Committee Chairman will be a Non-Executive Director with a financial/and or commercial background.

3. Quorum

No business will be conducted at a meeting unless one Non-Executive Director and one Executive Director (either Chief Executive or nominated deputy, or Director of Finance or nominated deputy) are present.

4. Attendance at meetings

For advice, support and information the Committee may require routine attendance at meetings from:

• Managers of the Trust;
• Deputy Director of Finance, and;
• Investment specialists.

5. Frequency of meetings

The committee shall be held not less than twice per year. Ad hoc meetings may be arranged to discuss specific issues at short notice.

Any Non-Executive Director may request a meeting if they consider it necessary.

6. Overview

The Charitable Funds Committee has been established by the Board of Directors to make and monitor arrangements for the control and management of the Trust’s Charitable Funds.

7. Scope and duties

The scope of the Committee is to be within budget, priorities and expenditure criteria determined by the Trust as Trustee and consistent with the requirements of the Charities Act 2006 (or potential modification to the Act) to apply the Charitable Funds in accordance with their respective governing documents.

To ensure that the Trust’s policies and procedures for Charitable Funds investments are followed. To make decisions involving the sound investment of Charitable Funds in a way that both preserves their capital value and produces a proper return, consistent with cautious and sensible investment and compliance with the:

• Trustee Act 2000;
• The Charities Act 1993;
• The Charities Act 2006, and;
• Terms of the funds governing documents.

To receive at least twice per year reports for ratification from the Director of Finance on investment decisions and action taken through delegated powers upon the advice of an Investment Adviser.

To oversee and monitor the functions performed by the Director of Finance as defined in the Standing Financial Instructions (SFIs).

To monitor the Trust’s scheme of delegation for expenditure levels:

• Up to £1000;
• £1000 to £5000;
• Between £5000 and £25,000, and;
• £25,000 to OJEU

Expenditure over the OJEU threshold must have Board of Director Approval.

The charitable fund accounts and associated management will be subject to external audit, a report of which will be received by the Charitable Funds Committee.

8. Delegated powers and duties of the director of finance

The Director of Finance has prime responsibility for the Trust’s Charitable Funds as defined in the SFI’s, section 17, and shall ensure that each Trust Fund which the Trust is responsible for managing is managed appropriately with regard to its purpose and to its requirements.

In particular:

• To identify any new charity which may be created (of which the Trust is Trustee) and to deal with any legal steps that may be required to formalise the trusts of any such charity;
• Provide guidelines with respect to donations, legacies and bequests, fundraising and trading income;
• Responsibility for the management of investment of funds held on trust;
• Ensure appropriate banking services are available, and;
• Prepare reports to the Board of Directors including the annual accounts.

9. Authority

The Charitable Funds Committee (CFC) has responsibility for:

Operational management of the investments of the Charitable Funds in accordance with the investment strategy agreed from time to time by the Trustee and the requirements to oversee and monitor the functions performed by the Director of Finance as defined in the Standing Financial Instructions (SFIs) provided that;

The CFC shall have power to appoint an Investment Manager to advise on investment matters. In exercising this power, the CFC must ensure that:

• The scope of the power delegated is clearly set out in writing and communicated to the persons or organisation who will exercise it.
• That there are in place adequate internal controls and procedures which will ensure that the power is being exercised properly and prudently.
• That they review regularly the performance of the person or persons exercising delegated power.
• That where an Investment Manager is appointed, the person is regulated under the Financial Services Act 1986.
• The acquisitions or disposal of a material nature must always have written authority of the CFC or Chairman of the CFC in conjunction with the Director of Finance.
• The banking arrangements for the Charitable Funds should be kept entirely separate from NHS funds.
• Separate current and deposit accounts should be minimised consistent with meeting the expenditure obligations.
• The amount to be invested or redeemed from the sale of investments shall have regard to the requirements for immediate and future expenditure commitments.
• The CFC will operate an investment pool when this is considered appropriate to the charity, in accordance with charity law and the directions and guidance of the Charities Commission. The CFC will recommend the basis to the Board of Directors for applying accrued income to individual funds in line with charity law and relevant guidance by the Commission.
• The CFC will obtain appropriate professional advice to support its investment activities. The Trust’s professional adviser/Investment Manager should only be appointed after a competitive tender exercise has been performed in accordance with the Trust’s SFI’s.
• The CFC shall regularly review investments to see if other opportunities or managers offer a better return, with due regard to the financial risks, Trust’s ethical investment policy and climate at the time.
• When investing, the CFC has a duty to do so in a way that furthers the purposes of the Charitable Fund. The CFC will avoid investing in a particular business that may damage the health of the wider community or conflict with wider NHS objectives, for example, tobacco companies. Trustees can therefore pursue an ethical investment policy that may detract from trustees’ duty to obtain the best financial return. Investments will be reviewed at least twice a year to ensure compliance with the Trust’s ethical investment policy.

10 Agenda and reporting

The Agenda will be agreed by the Chair of the CFC in consultation with the Director of Finance.

The Secretary shall circulate Agenda papers and subsequent minutes for each meeting and a copy, for information, to the Chair of the Board and the Chief Executive.

The minutes of the CFC will be submitted to the next available Board of Directors Meeting.