In light of the Charity Commission´s report published last week on the results of their Account Monitoring review of charities, we've provided some links and guidance.
We think it’s important to state that the report didn’t show that charities failed to report income but that the income details seem to be entered in the wrong place. The charity commission believes this is so due to “…the majority of those organisations surveyed “seemed either not to understand the difference between support costs and governance costs” or “were not fully aware of the SORP’s requirements for reporting their expenditure”. We feel this highlights need for clearer, more readily available advice for charities in this area.
It is also worth noting that only 76 charities were reviewed and that the Commission felt that only three of them had reasonable explanations for the incorrect entry of finances.
Guidance From the gov.co.uk website – (https://www.gov.uk/government/publications/charity-reporting-and-accounting-the-essentials-cc15b)
To understand what you need to do for your charity, first check:
• whether or not your charity is also a company or charitable incorporated organisation
• its income for the current financial year
• the value of its assets
• whether or not it is required to be registered as a charity
You should then establish:
• what type of accounts must be prepared
• what information is needed in your trustees’ annual report
• whether your accounts need an independent examination or audit
• what information must be sent to the Charity Commission
If you have to send your charity’s annual report and accounts to the commission, you must do so within 10 months of the end of your charity’s financial year.
Please note that the government guidelines can and do change and so it is always best to check for the latest guidelines on the GOV website - https://www.gov.uk/government/publications
Read the report here- https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/477927/amr_high_governance_costs.pdf the report