A National Audit Office report of June 2005 on the relationships between government departments and third sector organisations highlighted the inconsistency of funding arrangements in all aspects. In particular, they highlighted that funders were often confusing terms appropriate for grant-funding arrangements with terms appropriate to a contract arrangement. For example, charities negotiating contracts should not have to disclose all their budget information, nor repay unused funding at the end of the contract if they have delivered all the services specified. One point made in the report is that government departments should follow their own procurement processes for contracts, whereas their own application process should be suitable for grants.
