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CH207-Social Fund Management and Distribution Policy

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Registration Number: {{org_field_registration_no}}

Social Fund Management and Distribution Policy

1. Purpose

The purpose of this policy is to provide clear, lawful and practical guidance on the establishment, management, oversight and closure of any social fund operated for the benefit of people living at {{org_field_name}}. The policy sets out how contributions are requested, received, recorded, stored, spent, reviewed and reported so that all arrangements are person-centred, transparent and safe.

This policy is intended to support compliance with the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014, including Regulation 11 (Need for consent), Regulation 13 (Safeguarding service users from abuse and improper treatment), Regulation 16 (Receiving and acting on complaints) and Regulation 17 (Good governance), together with the Mental Capacity Act 2005, UK GDPR and the Data Protection Act 2018.

This policy also makes clear the distinction between a pooled social fund used for shared or agreed individual benefit and the separate management of an individual person’s own money, property or financial affairs, which must be governed by the organisation’s managing service user finances policy and any relevant legal authority.

2. Scope

This policy applies to all staff, agency staff, volunteers, managers, senior leaders and any other person acting on behalf of {{org_field_name}} in relation to a social fund for people living at the care home. It also applies to residents, relatives, friends, advocates, attorneys, deputies, appointees and external donors where they are involved in making contributions, requesting expenditure, reviewing records or raising concerns about the fund.

The policy applies to all monies and items received into a social fund, including cash, bank transfers, card payments, online donations, petty cash floats and monies raised through internal or external fundraising specifically intended for the benefit of residents.

This policy does not authorise staff to manage an individual resident’s personal money or property except in accordance with the organisation’s separate policy on managing service user finances, the resident’s care plan, a valid Lasting Power of Attorney, deputyship, appointeeship or other lawful authority.

This policy applies whether the proposed expenditure is for shared group benefit or for an agreed individual benefit from the fund.

3. Related Policies

4. Policy Statement

{{org_field_name}} is committed to promoting inclusion, dignity, choice, wellbeing and meaningful occupation for people living at the care home. Where a social fund operates, it must be managed in a way that is open, accountable, auditable and centred on the wishes, needs and rights of the people who may benefit from it.

Participation in the social fund, including any contribution, donation, fundraising activity or decision about expenditure, must always be voluntary. No person’s care, treatment, accommodation, relationships with staff, access to activities or quality of service will be affected by whether they contribute to the fund or choose not to contribute.

The social fund must never be used to replace the provider’s own responsibility to fund core service delivery, staffing, equipment, routine hospitality, maintenance, utilities, statutory requirements or any other business cost. The fund must never be used for staff gifts, staff benefits, loans, cash advances, unauthorised petty cash use or any purpose that does not clearly benefit the residents for whom it is held.

The provider will ensure that all decisions relating to the fund are made with valid consent where the person has capacity, and where a person lacks capacity, in accordance with the Mental Capacity Act 2005, any lawful representative authority and, where appropriate, best-interests decision-making.

The provider will maintain accurate records, effective oversight, segregation of duties, complaint routes and safeguarding processes so that misuse, error, financial abuse, conflicts of interest and poor practice are prevented, identified quickly and acted on without delay.

5. Key Principles and Implementation

Definition and Purpose of the Social Fund

For the purpose of this policy, a social fund means a separately identifiable pooled fund made up of voluntary contributions or donations that are intended solely for the benefit of people living at the service. The social fund is not provider income, is not part of the organisation’s operating budget and must not be mixed with the organisation’s business accounts except through a clearly recorded and auditable transfer into an appropriately designated fund account or ledger.

The social fund may be used for communal activities, celebrations, outings, entertainment, cultural or religious observance, small agreed purchases for the benefit of residents, or agreed individual benefits where this is fair, documented and consistent with the purpose of the fund.

The social fund does not include an individual resident’s personal spending money, pension income, benefits, savings, property or valuables. These must be managed separately under the relevant finances policy and only where lawful authority and proper records are in place.

Where donations or fundraising income are given for a specific stated purpose, those monies must only be used for that purpose unless the donor has agreed otherwise and the change is fully documented.

Voluntary Contributions

No resident, relative or representative is under any obligation to contribute to the social fund. Staff must not pressure, encourage, repeatedly prompt, shame, persuade or influence any person to donate. Any suggestion that care, attention, inclusion in activities or staff attitude may be affected by a decision not to contribute is prohibited and will be treated as a potential safeguarding concern.

Before any contribution is accepted from a resident, staff must be satisfied that the resident has capacity to make that specific financial decision, understands that the contribution is voluntary and understands that the money will not be returned unless this has been expressly agreed beforehand. Where the resident lacks capacity, staff must not accept a contribution unless the decision is made lawfully by a person with appropriate authority or is otherwise lawful and properly documented.

Where a contribution is made by an attorney, deputy, appointee or other representative, staff must check the scope of that authority where relevant and record the name of the person making the payment, the basis on which they are acting and any restrictions that apply.

Every contribution must be receipted, recorded on the same day or as soon as reasonably practicable, and capable of being traced from receipt to banking and from banking to expenditure.

Capacity, Consent and Representative Authority

Before accepting a contribution from a resident or using the social fund for an individual resident’s benefit, staff must consider whether the resident has capacity to make the relevant decision at the time it needs to be made. Capacity assessments must be decision-specific and recorded where there is doubt or where the decision is significant.

Where a resident has capacity, staff must obtain and record that person’s consent. Where a resident lacks capacity, staff must follow the Mental Capacity Act 2005 and consult any attorney, deputy or other lawful representative where applicable. Staff must not assume that a relative can authorise financial decisions unless there is lawful authority or another proper legal basis.

Best-interests decisions relating to the use of the social fund must be fully documented and must show the decision to be made, the people consulted, the resident’s past and present wishes and feelings, the options considered and the reasons for the decision reached.

Transparency and Record-Keeping

The provider must maintain a dedicated Social Fund Register and supporting records sufficient to provide a complete audit trail for every transaction. Records must include, as a minimum: the date; amount; method of payment; source of the money; name of the donor or contributor unless anonymity has been expressly agreed and can be justified; purpose of the contribution where relevant; receipt number; running balance; details of expenditure; authorisation; invoices or receipts; and the names of staff involved in receiving, recording, approving, reconciling and checking the transaction.

Social fund monies must be kept separately from the provider’s own business monies and separately identifiable from any individual resident finances. Cash holdings must be minimised and stored securely in accordance with the organisation’s cash handling procedures. Banked funds must, wherever practicable, be held in an account clearly designated for the fund or otherwise separately coded within the provider’s financial systems so that all transactions are visible and traceable.

The balance of the fund must be reconciled at least monthly, and more frequently where activity levels or risk indicate this is necessary. Reconciliations must be reviewed and signed by a senior person who was not the original recipient of the monies where possible. Any unexplained discrepancy, missing receipt, delayed banking, altered record, unusual transaction or deficit must be escalated immediately to the Registered Manager and investigated without delay.

Records relating to the social fund must be retained, stored securely and made available for internal audit, quality assurance, complaint investigation, safeguarding enquiry or CQC inspection on request, subject to data protection and confidentiality requirements.

Use of Funds and Distribution Decisions

All proposed spending from the social fund must be clearly linked to the benefit, wishes, preferences or social wellbeing of residents. Decisions about expenditure must be based on evidence of resident involvement wherever possible, for example resident meetings, key worker discussions, activity planning, consultation records, care plan reviews, relative feedback or individual preference records.

Where a resident has capacity, their consent to an individual benefit funded through the social fund must be obtained and recorded. Where a resident lacks capacity, the provider must follow the Mental Capacity Act 2005 and record how the decision was made, who was consulted, whether the person has a lawful representative and why the expenditure is considered to be in the person’s best interests.

Expenditure must be proportionate, fair and properly authorised. The policy should be read alongside the provider’s financial scheme of delegation, and the following minimum controls apply unless stricter internal limits are in place: routine low-value expenditure must be approved by the designated senior member of staff responsible for the fund; any significant expenditure, exceptional purchase, cash withdrawal or non-routine item must be authorised in writing by the Registered Manager; and any expenditure that may materially affect the balance of the fund must also be reviewed through governance or quality assurance processes.

Social fund monies must not be used for staffing costs, food or drink that the provider is ordinarily required to supply, routine décor, maintenance, transport costs that form part of commissioned care, replacement of statutory equipment, loans to residents or staff, or gifts or payments to staff.

Protection from Financial Abuse

The provider recognises that social funds can create a risk of financial abuse, coercion, theft, fraud, false accounting, conflicts of interest and misuse of position. Staff must not borrow from the fund, hold fund monies at home, use the fund for convenience purchases, round figures inaccurately, delay recording transactions, retain change, combine receipts, ask residents to sign blank forms, or arrange purchases for themselves or others from fund monies.

A minimum of two-person oversight must be used for cash counting, handover, reconciliation or high-risk transactions wherever practicable. No staff member may both authorise and reconcile the same significant transaction without independent review.

Any suspicion, allegation, concern or evidence of financial abuse, coercion, exploitation, theft, misappropriation or improper treatment must be treated as a safeguarding matter, reported immediately in line with the safeguarding policy, recorded on the incident system and referred externally where required. Immediate protective action must be taken to secure records, preserve evidence and reduce further risk.

Individual Benefit and Equity

The provider will take reasonable steps to ensure that the social fund is used fairly, inclusively and in a way that reflects the diverse needs, identities, communication needs, cultures, religions and preferences of residents. Equality does not necessarily mean identical spend for every individual; however, where expenditure benefits some residents more than others, the rationale must be reasonable, person-centred and documented.

Individual benefit from the fund may be appropriate, for example for a birthday acknowledgement, a culturally significant item, bereavement support, a meaningful outing or a small item that promotes wellbeing. Where this occurs, the record must show why the expenditure is appropriate, how consent or best-interests decision-making was addressed, and why the decision is fair in the context of the overall operation of the fund.

Auditing and Governance

The social fund must form part of the provider’s governance framework and be subject to regular assurance activity under Regulation 17. This must include routine checks of receipts, transaction records, balances, reconciliations, authorisations, consent records, complaint themes, safeguarding concerns, staff practice and learning from incidents.

Formal audit of the social fund must take place at least quarterly, with an annual overview report to the Registered Manager and, where applicable, the Nominated Individual or wider governance structure. Audit findings must identify good practice, deficits, unexplained variances, overdue reconciliations, policy breaches, repeated documentation errors, training needs and actions required.

The provider must maintain an action plan where deficits are identified, monitor completion of actions and re-audit to confirm improvement. Governance records must show who reviewed the fund, what was found, what decisions were made and how risks were reduced.

Conflicts of Interest and Staff Conduct

Staff must declare any actual, potential or perceived conflict of interest relating to the social fund, including where they have a personal relationship with a donor, supplier or beneficiary, where they are involved in fundraising linked to a private cause, or where they could gain directly or indirectly from a decision.

Staff must not select suppliers, make purchases or influence spending decisions where a conflict exists unless this has been declared and independently managed. Gifts, rewards, discounts, incentives or hospitality linked to purchases from the social fund must not be accepted except in accordance with the organisation’s gifts and hospitality rules.

Any breach of this section may be managed as a disciplinary matter and, where relevant, a safeguarding or fraud concern.

Complaints, Concerns and Escalation

Any resident, relative, representative, advocate, donor, staff member or professional may raise a concern or complaint about the operation of the social fund. Information on how to complain must be easy to access and available in formats people can understand.

All complaints relating to the social fund must be recorded, acknowledged, investigated and responded to in line with the organisation’s complaints policy. The provider must distinguish between complaints, safeguarding concerns, disciplinary concerns and suspected criminal matters, while ensuring that issues are escalated promptly where more than one process applies.

Where a complaint identifies poor practice, a discrepancy, potential abuse, inaccurate recording or unfair decision-making, immediate protective action must be considered and the matter reviewed through governance processes. Lessons learned must be documented, shared appropriately and used to improve the operation of the social fund.

Communication with Stakeholders

Clear and accessible information about the purpose, voluntary nature, governance and use of the social fund must be made available to residents and, where appropriate, their relatives, representatives and advocates. Information must be provided in a format that people can understand, taking account of communication needs, sensory needs, language, literacy and cognitive impairment.

Residents and their representatives must be able to ask how the fund operates, who authorises spending, how balances are checked, how concerns can be raised and how they can request information about transactions relevant to them or to the fund more broadly, subject to confidentiality and data protection requirements.

Monitoring, Review and Quality Indicators

The provider will monitor the operation of the social fund using quality and governance indicators, which may include timeliness of banking, reconciliation completion rates, number of unexplained variances, missing receipts, complaint themes, safeguarding referrals, staff training compliance, resident involvement in spending decisions and audit outcomes.

Results must be reviewed regularly by the Registered Manager and, where applicable, reported through the provider’s governance systems. Patterns, trends and recurring weaknesses must be analysed and acted upon.

The provider must be able to demonstrate, if requested by CQC or another relevant body, how it assesses, monitors and improves the safety, fairness and transparency of the social fund arrangements.

Closure or Change of Fund

If the social fund is to be closed, suspended, merged, materially changed or transferred to a different operating arrangement, the provider must first complete a final reconciliation, identify all outstanding commitments, consult residents and relevant representatives, and document the reasons for the change.

Any remaining balance must continue to be used solely for the benefit of the residents for whom the fund was held, unless there is a clearly documented lawful basis for an alternative arrangement that is consistent with donor restrictions and resident interests. Remaining monies must not be absorbed into business income, used to offset service deficits, or transferred to another purpose without proper consultation, approval and record keeping.

A final closure statement must be prepared showing the opening balance, final income, final expenditure, closing balance, method of disposal of remaining monies, dates of consultation and the names of those authorising closure. This statement must be retained with the fund records.

6. Staff Training and Responsibilities

Only staff who have been deemed competent and authorised by the provider may receive contributions, record transactions, hold fund monies, arrange purchases, reconcile balances or approve expenditure from the social fund.

Training for relevant staff must include, as a minimum: safeguarding adults and financial abuse; Regulation 11 consent requirements; Mental Capacity Act 2005 and best-interests decision-making; accurate record keeping; confidentiality and data protection; complaints handling; conflict of interest; cash handling and reconciliation; and escalation of concerns.

The Registered Manager is accountable for implementation of this policy, for ensuring appropriate delegation, oversight and review, and for taking timely action where concerns, discrepancies or poor practice are identified. Senior staff with delegated fund responsibilities must understand the limits of their authority. All staff must report concerns immediately and cooperate fully with audits, investigations and safeguarding processes.

7. Policy Review

This policy will be reviewed at least annually and sooner where required by changes to legislation, CQC guidance, safeguarding learning, complaints, audit findings, incidents, financial discrepancies or service development. The review must consider whether the policy remains accurate for the type of service provided, whether staff are following it in practice, whether controls remain effective and whether residents and representatives can understand and use the arrangements described.

Any revision to this policy must be approved through the provider’s governance arrangements, communicated to relevant staff and implemented through supervision, training and audit.

Responsible Person: {{org_field_registered_manager_first_name}} {{org_field_registered_manager_last_name}}
Reviewed on: {{last_update_date}}
Next Review Date: {{next_review_date}}
Copyright © {{current_year}} – {{org_field_name}}. All rights reserved.

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