7027 Thornbury Castle

Finally got home from holiday to a copy of the accounts, a few interesting things popped up...

• As you suggest, why transfer £13k from the unfinished 1014 project to the even more unfinished 47xx project?
• These projects which have spent more in the year than their income have received the balance from somewhere else within GWS funds, its not clear where - I notice that for instance the Saint fund has now been cleared out (I assume as it has been finished?) but its not clear where that £37k has been transferred to, and a cynic would ask why that restricted funding has not been kept in that fund towards the next overhaul?
• The admittedly small amount of money in the Dean Single Fund has been transferred out to the Fire Fly fund which I suppose makes sense?

One interesting thing came from the notes of the general questions at the 2022 AGM last October, a question was asked 'what safeguards were now in place to prevent autonomous groups within the GWS from spending a significant amount of money that they didn't have and leaving the GWS liable' it was answered that 'there have been quite a few meetings over the last few weeks regarding this, and the board has now set a limit of £10k without prior board approval' - so looks to have confirmed that the GWS knew nothing of the actions of the 47xx group and had been left in an awkward position, but at least something positive can be taken from that with measures in place to prevent it happening again.

Anyway, what's done is done, 7027 has gone, or is going, to Tyseley so possibly moving on.

 

It seems remarkable to me that a group could make an expenditure of even £9,999 without board approval.

As for transfers between funds - one assumes that the relevant permissions have been obtained from donors for such transfers. If I really wanted to see 1014 built and had donated into a restricted fund accordingly, I’d be miffed to see that money go to another project. (If I just wanted to support the GWS and didn’t care too much about how, I’d have donated to the general (unrestricted) fund instead. Restricted funds are restricted for a reason).

Tom

 

You have to admit, it looks to be a bit of a mess, I'ts as if, the GWS, has no real control over what is spent on what, and some funds are not as they seem, donate to 1014, and it gets given to 4709, Donate to the Saint, Oh, look, thats now been given to 4709, It's as if the GWS, is nothing more than an money pit, where donations, end up being spent on someone's pet project, I wonder, how many of these recreations are going to get an overhaul in 10 years? my expectation is zero, that instead, another recreation will be dreamed up using the spare parts bin, and instead that will be prioritised.

 

I don't disagree with much of your post, although to be honest that might just be the Stockholm Syndrome setting in given how many times you've now written it on this thread... If stopped at random in the street, and asked totally out of context by an interviewer 'what does martin1656 think about the Night Owl?' I could probably quote you!

But just on the bit I've quoted here, you do seem to have set this benchmark up as something that matters apparently deeply to you, but in the context of railway preservation as a whole, and in the context of a museum in particular, does it/should it matter? Leaving aside the 'spare parts bin' jibes, if a group builds a machine, gets ten years out of it in steam, then said machine retires to a potentially long retirement under cover where the public can look at it, is that so very heinous? And if so, why?

Where you're on slightly stronger ground potentially is if money is being transferred to pay for it without the consent of the donors, but that's only running as a hare on here since today.

I am not a GWS member, nor Night Owl donor.

 

What would you expect the limit to be, out of interest?

Better still, are there any "best practice" guidelines out there that might suggest a figure?

Or would it be normal for the board to need to explicitly approve everything, no matter the cost?

 

Well, if I have understood the context correctly in the quote by @GWR4707 the suggestion is about autonomous groups making spending commitments for funds they don’t have (and thus drawing on the unrestricted fund). I’d suggest the limit there should be £0. Otherwise there is a risk that the fund gets overspent if several groups all independently make funding commitments from the central fund.

For restricted funds, it’s more appropriate to have a degree of autonomy (though I’d still expect spending to go through project governance mechanisms).

It seems axiomatic to me that you can’t spend money that isn’t yours; and if you are one group under a broader umbrella organisation, the unrestricted fund isn’t yours; it can only be allocated by the trustees.

Tom

 

Unless it was repeat spend, which this would not have been, then at my company you would have not been able to just commit to £10K of expenditure without some capital approval process.

 

Moreover, drawing down on that fund needs to consider the availability of cash - it may not all be in a current account.

I’m with @Jamessquared in the view that any expenditure for the purposes of a restricted fund to be drawn on unrestricted funds should be board approved. The limit of £10k seems more appropriate as a limit to spending of any kind by an “autonomous group” without seeking trustee sanction.

The fact that this conversation is necessary is in itself a sign to me that there’s a major weakness in Didcot’s governance arrangements, based on an apparent failure to recognise that, in the context of a single charity, there is no such thing as an “autonomous group”, and that the trustees of the charity retain full accountability for what is done by “their” organisation.


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Ah, good point, I was (without consciously realising it) only thinking about money from the restricted funds.

Although there is a desire to move away from using restricted funds (per page 18 of the 2022 annual report) to (as I understand it) avoid having money tied up in dormant projects. But I guess you can allocate a chunk of money from the unrestricted funds to a project, that it would be allowed to use as if it were restricted.

 

Ahh, thanks for sharing that link to the 2022 AR, the 2023 AR we all received and are discussing is also on the website here (the Restricted funds movements are on Page 14, the comment re spending limits page 20), but I would never have found it if you hadn't linked the 2022 version!

https://indd.adobe.com/view/209119e9-53c3-4919-afc9-f003b6cfdb5a

Interesting the comment in the 2022 version regarding the need to contact everyone who had contributed if closing a restricted fund to ask if they wanted the cash spent on something else or returned, that doesn't appear to have really been followed in spirit in 2022-23?

 

I think one of the things I found a bit concerning was the suggestion that funds had been moved between restricted funds; that should only really happen with the consent of the original donors.

I can understand the issue about small amounts in restricted funds that are essentially unusable; however, a charity isn’t duty bound to accept any donation that is offered. If I came along with £100 which I explicitly wanted to be put towards putting a new engine in the gas turbine loco, it is down to the trustees whether they think that is the catalyst that will see that come to fruition, or whether it is basically pie in the sky. If the latter, they would be best advised to politely refuse the donation.

In the Bluebell Railway Trust, FWIW, there is the concept of a “designated” fund which is basically a movement from the unrestricted fund to a specific project. But it is still technically unrestricted; really it’s a bit like a commitment in a budget. If the project then raises sufficient to cover the amount, the funds can move back from designated to unrestricted. It thereby allows the unrestricted fund to underwrite spending by a project, but at the discretion of the trustees. The main benefit seems to be to allow a project to take advantage of a time-limited opportunity quicker than they could otherwise raise funds.

Tom

 

I have no idea what transfers were made for what reason, but it occurs to me that, for example, if one project had transferred a quantity of parts or materials to another project then a transfer of money in the opposite direction would be expected, entirely appropriate and doesn't seem to me to be a misuse of restricted funds.

 

I personally don’t think it’s fair to second guess the accounting practices of the GWS here.

Bear in mind that we’re all volunteers and balancing the books is a difficult business at the best of times. I have full sympathies for their finance team (or, indeed, treasurer).

It’s at times like this I wish we had a forum for discussing best practice in charity accounting for railways. I know how I do it for the MNLPS suits us but it might not suit others, and we can always learn from others.

 

We too make a distinction between 'designated funds' and 'restricted funds' with the GWRT, so one presumes (hopes!?) that these funds for the Saint, County etc. that have had money transferred out are the former and not the latter. Otherwise as you say you get into rather murky territory.

 

Restricted funds are, per Charity Commission guidance, effectively independent charities and movements need to be done with great care. Designated funds carry a moral obligation, but lack the legal rigour and can be useful for ring fencing.


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You seem to have misunderstood my post #3556 as critical of the P2 project. It is clear that the original P2s had some issues, which prompted their rebuilding, but I thought the accusation of a "spreading the track" was false. Anyway I understand very well that the changes in the new one are for the better. I was only enquiring about how much of @ilvaporista's "certification and paperwork" (post #3555) is needed in what circumstances. (And BTW I am a founder member too.)

 

The certification and paperwork would need to be clarified with the relevant authorities.
My business is in the automotive sector. For this sort of work charges are around €120 / hr for a junior engineer upto €280/hr for the chief engineer, plus the costs of any relevant testing, inspection and external consultation. I would guess that the rail industry has about the same cost level, if not higher, as it is a more specialist field.
How much time would be needed? I have no clear idea, but I would estimate hundreds of hours, rather than tens.

 

No, not at all, my apologies if that’s how it came across. In terms of the paperwork, the P2 exceeded the A1 significantly I am led to believe. Both in design and manufacturing - the world has moved on significantly from the start of the A1 build.

 

Looks like Star has snook back onto the Agenda then and the cash has ben raised to pay for 7027. https://www.railadvent.co.uk/2023/0...progress-report-on-steam-locomotive-4709.html

 

Hang on, didn't the GWS say they had no plans to build a star, So that raises more questions, Where is this boiler for a star coming from? can't exactly fit a spare number 1 can you, and 2, exactly who is running GWS, the committee, or the 4709 group, It does sound like someone is using the GWS funds, and calling the shots, when the 4709 group are supposed to be an at hands length organisation, If the GWS are a charity maybe the Charity commission need to look at their finances and how funds are being used,