The Charities Act 2011 received the Royal Assent on 14.12.11.This was a consolidating Act.
They took their time getting round to publishing a consolidtaed Act!
There's currently a full review looking at revisions to the Act. Any suggestions for inclusion? More / less power for Trustees? More / fewer powers for the Charity Commission?
I have come across two charities in the last year where trustees have paid themselves for 'work' (I use that word advisedly) done for the charity - in one case £14,000 for preparing a spreadsheet and cash flow forecast that I could have (and was being paid by that charity as an emloyee to do) done in a day and the other for bid- writing - £5k.In each case the other trustees acquiesced in this payment which while morally corrupt fell into the grey area of payment for specific services falling outside the normal duties of a trustee.
In the latter case incidentaly the CC advised the charity to deduct BR tax from the payment - wrongly in my view.
I suspect in these times of austerity more trustees are finding ways to get 'paid'.
The audit requirement's mean you have to test expenditure to ensure it is required for charitable purposes. If testing identifies this not to be the case, depending on the materiality level this could lead to qualifications and even to 'whistle blowing' implications.
Not sure what the requirements for Independent Examiners Reports are (not read the working programmes yet!!) but I would guess they are similar.
Likewise, such transactions have to be recorded in the related parties note. This should include a disclosure note if the transactions are not at market value. This note should be made if the accounts are audited or not.
one of the trustees in my example has left the charity and the other if censured will just quit. Neither charity required an audit.
Would the removal of the two trustee's not resolve the issue?
If not, whilst these may not be audits you would need to consider if reporting to CC is applicable.
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