Improving the quality of charity accounts
The Charity Commission continues to monitor the quality of charity accounts and to provide tools and guidance to help charities prepare them. New accounts templates and the results of a recent review of public benefit reporting are the latest examples of this support.
New accounts template for small charitable companies
The Charity Commission, in partnership with Companies House, has issued an accounts template for charities with income less that £500,000.
The templates reflect regulatory requirements, current guidance and best practice and so should make it easier for charities to comply with their obligations and improve the clarity for the users of the accounts.
The templates for non-company charities with incomes under £500,000 and Trustees’ annual report templates are available on the Commission website.
Public benefit reporting
The level and quality of public benefit reporting remains an area of concern. A recent scrutiny of a random sample of accounts found that over half did not meet the public benefit reporting requirement.
Charities either failed to describe the difference their charity had made, failed to include a statement that they had complied with the public benefit requirements and read the Commission’s guidance or failed on both counts. The Commission’s report gives an example to demonstrate how to get the reporting requirements right.
As part of the above scrutiny, the Commission also examined whether the accounts met basic user needs based on various factors. Just over half of the small charity accounts were of acceptable quality which was an improvement on previous years. However issues noted on those considered unacceptable included:
- Accounts were inconsistent or were not transparent
- Accounts were incomplete or did not balance
- Annual reports did not provide sufficient information on charitable objectives or activities.
For advice on producing charity accounts contact Elizabeth Irvine.