Issue

Content

Supporting Document

Date of Issue

Existing rules of using LSG and LSG Reserve

“According to LSG Manual, the level of cumulative reserve (including interest but excluding PF reserve) at the end of the financial year should not exceed 25% of the NGO’s operating expenditure (excluding PF expenditure) for that year. Any amount above the 25% cap has to be returned to the Government in the following financial year, unless the NGO has applied to, and obtained the permission of, the SWD to lift the cap. Exemption en bloc was granted for three years from 2004-05 to 2006-07, to enable NGOs to save, without limit, surplus TOG and SOG in a separate account, basically for meeting contractual commitments in future.”

App 1 - LSG Manual - Reserves,- P.21-P.22 point 2.33-2.35

October 2000

Recommendation 9: In managing their reserves, NGOs should take into account their Snapshot Staff commitments, as well as the need for service enhancement and staff development.

App 2 - Review Report on the LSG Subvention System, Chapter 4 Financial Issues and Interactions between the Government and NGOs, P. 42-P.46, point 4.21-4.26

December 2008

App 3 - Circular no 8 - Guidelines for NGOS to Invest the Lump Sum Grant reserve

July 2003

App 4 - Circular no 9 - Use of Lump Sum Grant and Lump Sum Grant Reserve

December 2003

Arrangement of the cumulative LSG Reserve (2007)

LSG Reserve as at 1 April 2007 would be taken as ZERO and the clawback arrangement would be resumed by adopting again the 25% cap.

App 5 - Minutes of 24th meeting of LSG Steering Committee

November 2007

App 6 – letter to NGOs receiving Special One-off Grant

November 2007

The Spirit of using LSG

NGOs subvented on LSG were given autonomy and flexibility on deploying the additional resources as long as they were spent on enhancing the administrative capacity and/or enhancing the service quality within the Funding and service Agreement.

App 7 - Minutes of 26th meeting of LSG Steering Committee, Point 25 and 32

March 2008

As a matter of principle, LSG Reserve must be used on FSA activities and the related support services.

App 2 - Review Report on the LSG Subvention System, Chapter 4 Financial Issues and Interactions between the Government and NGOs – LSG Reserves, P. 42, point 4.22

December 2008

Issue

Content

Supporting Document

Date

Provident Fund Reserve

Provident Fund Reserves can only be used for PF commitments in the future and the NGO will absorb all financial consequences arising from the use of the reserves

App 2 Review Report on the LSG Subvention System, Chapter 4 Financial Issues and Interactions between the Government and NGOs ?– PF Reserves, P. 45, point 4.31-4.33 and Recommendation 11

December 2008