“No excuses for not filing accounts’ say Charity Commission
19th January 2016
Today the Charity Commission has published a sample of excuses given by charities not filing their accounts on time.
– Nearly one-third of charities’ accounts filed of ‘unacceptable quality’.
– Campaign to launch in January targeting charities in default.
– Filing accounts is key to transparency and public trust in charities.
Today the Charity Commission has published a sample of excuses given by charities not filing their accounts on time. Despite all charities with income over £25,000 being required to submit accounts, thousands are in default. Excuses received by the commission include: “I don’t have access to the internet” [sent via email], “I’m not involved with this charity’s requirements, I am a trustee”; and “I already did it…last year”.
This comes after commission research found earlier this year that 32 percent of accounts submitted were not of ‘adequate quality’ in the 12 months up to 31 March 2013 – based on a random sample. This represents an improvement from the previous year analysed, where nearly half (46 percent) were inadequate.
If a charity’s income is over £25,000, accounts must be filed with the commission. Failure to do so indicates a lack of transparency on the part of the charity. It may affect the charity’s reputation and in extreme cases can jeopardise trust in charity as a whole. To avoid this, the commission advises trustees follow 3 easy steps:
– do not wait until you approach the 10 month deadline; when you have the documents, submit them
– ensure you have a password to access the commission’s online services or ensure that you know who within the charity has the password
– know that submission is the collective responsibility of the entire trustee body, not just the treasurer or secretary for example
The commission receives 60,000 sets of accounts each year. Almost 7,000 are required to have their accounts formally audited. 12 months ago the commission began a 3-year programme of transformation in the way it works. When complete it will enable the commission to more effectively monitor accounts and intervene earlier when problems arise.
William Shawcross, chairman of the commission said:
Although these excuses are amusing, there is a serious point – after a difficult year for charities, it is essential they do all they can to be open about their finances. I hope trustees take note and file their accounts. If not, they could be hearing from the commission soon.
A sample of excuses received by the commission for not filing their accounts include:
I cannot file my accounts because…
– I don’t have internet access [sent by email]
– Your website was closed
– I’m only a volunteer
– Joe does this, it is not my job
– The person with the password is in Malaysia
– The person with the password is in New York and isn’t contactable because of a Hurricane
– I’m not involved with this charity’s requirements, I am a trustee
– The School provides us with office space but it’s the school holidays and they are shut
– I cannot log onto your site, what is my charity number
– Can I log onto your site from someone else’s Computer?
– I already did it…last year
– I’m not a trustee, I’m on the committee
– My secretary schedules to file each year (on deadline day) and she is off sick
– The accounts aren’t ready so I recorded zero income and zero expenditure so we wouldn’t show as being in default on the Register
– It’s the accountants responsibility not mine
– Our computer caught fire and we lost all the financial data
– Deadline day falls on a religious holiday so we couldn’t file [sent by a multiple defaulter]
– I’m only new
– No-one told me when we registered
– You never sent me reminders
– I don’t believe in using computers
– Computers are satanic
– Our office was broken into and the thieves made off with the financial records
– My boot came open on the motorway and the papers went down the M1
The commission also received one set of incomplete accounts with bite marks.
Charity Commission – 27 December 2015
Changes to charity audit thresholds came into force on 31 March 2015
23rd April 2015
A number of changes to charity audit thresholds, including an increase in the basic threshold from £500,000 to £1m, come into force today.
The increase in the basic threshold is one of the major changes coming into force and means that charities under the new, £1m threshold can have their accounts looked at by independent examiners as opposed to formally being audited.
The changes remove the requirement to have accounts audited from around 4,000 charities, and the Charity Commission estimates it will save the sector around £8.7m a year.
Other changes to charity audit thresholds include an increase to both group income and preparation thresholds for parent and group accounts from £500,000 to £1m. The accounting pool of independent examiners will also be expanded.
These planned changes were announced in February, following a seven-week consultation process between the government and various sector bodies. They followed on from proposals originally put forward by Lord Hodgson of Astley Abbotts in his 2012 review of the Charities Act 2006.
Last week the Charity Commission published guidance on the issue, which states that the changes are “aimed at reducing the regulatory burden for charities”.
Civil Society – 31 March 2015
How effective is your charity
20th April 2015
A 15-question checklist to help your review how your charity operates and make sure it’s prepared for the future.
As trustees, and the people responsible for running your charity, it’s important that you regularly review your charity’s effectiveness. What challenges are you facing? Is the charity’s structure effective? What changes are you considering implementing?
It’s especially important to review how your charity operates in changing or uncertain economic climates. No charity is immune to financial problems and sadly there are occasions when, despite the best efforts of the trustees and staff, a charity encounters problems so serious that it has to close.
One such example is The BeatBullying Group, which went into liquidation in November 2014 after experiencing serious grant funding problems. Our operational compliance report explains why we got involved and what happened.
Many charities face similar financial problems. It’s not easy to maintain a charity’s secure financial future, particularly in a difficult and competitive economic climate. That’s why it’s so important you and the other trustees ask yourselves tough questions from the outset and regularly consider how your plans are going.
One way you can do this is to refer to our checklist of 15 key questions whenever you meet as trustees to make decisions about the way your charity operates.
Part of our ‘Big Board Talk’ series on trustee decision-making, the checklist covers all stages of the financial cycle. It’s designed to help you respond appropriately to change by developing plans and timetables for action. It supports general good practice as well as how to deal with situations like the one BeatBullying faced.
Even if things seem to be going well, don’t become complacent – make sure you regularly consider your charity’s financial resilience. For example, your business plan should set out how you will manage identified risks like an over-reliance on grants or a lack of reserves.
www.gov.uk – 10 March 2015