Good Causes Fund’s cash all taken up by 2014 commitments

The Auditor General has presented the Speaker of the House with an analysis of the National Lotteries Good Causes Fund, commissioned by finance minister Edward Scicluna, in which it found that the fund had been "significantly over-committed" under the former administration.

In addition to other shortcomings identified, the NAO concluded that commitments made out of NLGCF effectively bound funds well into the future, to the possible detriment of other deserving causes.

"NAO's analysis indicated that honouring all commitments entered into between January 2011 and March 2013, that are plausibly or actually due by 2013 and 2014, will entail the utilisation of approximately all of the NLGCF's available funds up to end 2014."

The fund was set up under the Lotteries and Other Games Act and is intended to support and partially fund projects and initiatives of a philanthropic, cultural, sports, educational, social, religious or civic nature, or other deserving causes, proposed by individuals and non-governmental organisations.

An Advisory Board is appointed to administer the fund, with applications for funding reviewed by the board and recommended for the approval or refusal of the minister. The fund generates its income through a percentage contributed from tax payable on gaming activity, unclaimed prizes and interest earned on its account. The average annual income of NLGCF amounts to approximately €1.7 million.

"Although NAO is fully aware of the fact that the guidelines for the approval of projects and initiatives are not legally binding, good governance would dictate further efforts at adhering to the Guideline's provisions," the Auditor General said.

Shortcomings including instances where the funding parameters were not respected, with instances where the thresholds for grants out of the fund were surpassed. Reasons for approval of funding outside of the parameters established by the guidelines were not always clearly indicated in the board's report.

Data relating to the fund, although maintained, was fragmented, with no one comprehensive source that included all the relevant information for each application. Since the fund is accounted for on a cash basis, it rendered the task of keeping track of all commitments that had previously been made when approving new applications even more onerous.

Various recommendations put forward by NAO are directed at addressing the shortcomings identified with respect to the administration of this fund. The NAO recommended that a time limit on commitments be introduced, whereby a date from the issue of the commitment letter is stipulated as the deadline for the completion of the project and consequent entitlement to funding.