Recently the Charity Commission have issued several press releases reminding trustees of their responsibilities over the filing of Annual accounts and Trustees annual reports.
The Charity Commission emphasise that filing accounts is key to transparency and public trust in Charities. Not only are responsible for ensuring that accounts are filed on time, they are also responsible for ensuring that they conform with the requirements of Charity Legislation.
Research in 2015 by the Charity Commission found that 32% of accounts submitted were not of ‘adequate quality’ in the 12 months up to 31 March 2013 – based on a random sample.
Trustees of a Charity with income over £25,000 must file accounts with the Charity Commission. It is a collective responsibility of the entire trustee body to ensure that the accounts are filed.
Amongst excuses made are : ‘I don’t have access to the internet’ – sent via email!; ‘I already did it ... last year’; ‘I am not involved with this charity’s requirements, I am a trustee’; ‘It’s the accountants responsibility not mine’; ‘I’m only a volunteer’. There are many more excuses listed, but they are not acceptable when the filing deadline is 10 months after the year end.
The Charity Commission is regularly naming charities as part of a class inquiry into those charities who fail to file accounts properly in two consecutive years, known as ‘double- defaulters’. These charities are listed as being in default, with the intention of charities bringing their affairs up to date. It is also seen as an indication that the trustees are not taking all of their responsibilities seriously and therefore are there other aspects of their responsibilities which are not also being taken seriously.
The Charity Commission acknowledge that for some charities there is a pressing need to balance income with expenditure. There is updated advice on the Charity Commission website to assist in the understanding of the legal requirements and to advise on what they should do in terms of good practice. There are also reports stressing the importance of the reserves policy to indicate good governance.
If you have any questions please do not hesitate to contact us.
By Steve Cresswell, Head of Charities and Not for Profit Team
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