Charity compliance update October 2017

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Jen Gerrard rounds up the news and movements from the month in charity compliance, and this month it is all about reporting to regulators. 

Reporting serious incidents in charities – updated guidance for trustees

On 22 September the Charity Commission for England and Wales published a feedback and response document to its consultation around the reporting of serious incidents in charities. The consultation closed on 12 January 2017.

The feedback and response(s) covered the following areas:

Format, style and length of guidance welcomed – the new examples table was well received but larger charities, with existing risk assessment processes, found it less helpful.

Statutory basis of reporting – concerns had been raised over the ‘duty to report’ wording which implied a legal duty. The commission has agreed to alter the wording to read ‘the commission expects’ or ‘should’ instead. Further concerns over the ‘if in doubt, report it’ wording were rejected by the commission and the wording has been retained.

Optimum timing of reports and multiple reporting – the commission said it will encourage good practice for all charities, regardless of size or income, in reporting serious incidents to the commission promptly and acknowledge that immediacy may not always be achievable, by including the qualification, ‘as soon as is reasonably possible’, into the specific advice on when to report.

‘Significant financial and other loss’ classifications – proposed to include the withdrawal of funding, litigation costs and banking services. The commission will:

  • Retain the proposed requirement to report financial loss, where this threatens the charity’s ability to operate and serve its beneficiaries, or where the charity’s financial reserves are not sufficient to cover the loss
  • Retain loss of banking services as a new classification to best protect charity funds and afford the commission adequate sector oversight

Updated wording on unverified donations the commission will refine the classification to include the word ‘significant’ and qualify it to where donations ‘cannot’ be verified and ensure that trustees are directed to the commission’s compliance toolkit for more detailed guidance on due diligence and verification.

The Commission’s safeguarding remit – see the link to the full consultation below to read all seven responses by the Commission to this area.

Impact of negative media attention – the Commission is to include the words ‘serious’ or ‘significant’ in the reporting guidance in order to be proportionate and encourage meaningful compliance

What happens after reporting? In response, the Commission will continue to ensure a timely acknowledgement of receipt is issued to all reporting charities and a standard reporting form will be developed, offering vital information prompts, in order to ensure trustees submit the essential detail needed

Read the full consultation and response documents here.

Authorising advisors to file charity accounts

In a move to ensure that all future filings are fully electronic, the Charity Commission for England and Wales updated their guidance on 9 October around how to authorise a charity advisor to submit accounts.

The guidance covers the following key areas:

  • How to authorise an adviser (for charities)
  • How to register for the service and file (for advisors)

Ensure you are up to date with the latest filing process here.

Annual return guidance updated

On 6 October 2017 the Charity Commission for England and Wales updated its guidance for preparing a charity’s annual return.

The guidance update includes reference to the consultation feedback in relation to serious incident reporting (see above).

Worthwhile making sure that your staff and clients are aware of any changes.

OSCR Trustees’ Annual Report guidance

The Office of the Scottish Charity Regulator (OSCR) has released a video providing guidance around how to create an effective Trustees’ Annual Report.

Full written guidance is due to be published later in 2017.

Why not bookmark our previous two-part article advising what to include in a charity’s Trustees’ Annual Report?

Converting to a Charitable Incorporated Organisation (CIO)

Secondary Legislation to enable charitable companies and community interest companies to convert into CIOs was laid before parliament on Thursday 14 September 2017. Subject to parliamentary approval, phased implementation of CIO conversions could begin from January 2018.

Read more here.

Consultations round-up

Here’s our monthly round-up of (and links to) key consultation opportunities and those closed, pending feedback.

The following consultations are currently open and inviting a response:

  • Charity Tax Group: Potential new Welsh taxes - opened 5 July 2017. The Welsh Government Finance Secretary will suggest that taxation could be used to change behaviours or to discourage activity which has negative social impacts. Email [email protected] to get involved. A shortlist of ideas will be considered in Autumn 2017
  • Charity Commission for England and Wales: Annual return 2018 – opened 1 September 2017, will close 5pm on 24 November 2017. Changes to apply to charities’ financial years starting on or after 1 January 2018
  • OSCR: Fundraising draft guidance consultation – opened 7 September 2017, will close 1 December 2017. The response is split into parts:

The following consultations are closed with feedback analysis pending – watch this space for an update in future briefings:

  • Charity Commission for England and Wales:
  1. The use and promotion of complementary and alternative medicine (CAM): making decisions about charitable status – closed on 19 May 2017. This consultation is about the Commission’s approach to deciding whether an organisation which uses or promotes CAM therapies is a charity. The Commission have released a statement, following receipt of over 600 responses:

“The Commission had planned to publish an analysis of the consultation in early August. However, the high volume of submissions means it has not been possible to prepare the analysis in that timeframe. We will continue our work on the review and plan to publish our analysis later in 2017.”

About Jen Gerrard

Jen Gerrard

Jen is a Fellow of the Association of Chartered Certified Accountants (FCCA) and the founder and managing director of Gerrard Financial Consulting, a specialist accounting firm for the charitable sector. She has over 17 years’ experience working in accounting and finance and has also worked as an accountancy tutor for a leading training provider.

Jen has been a trustee of the Southville Community Development Association (2014 to 2017), Self Injury Self Help (SISH) (2013-2016), the Oswestry Food & Drink Festival and Impact AAS (2007 to 2010). In addition to being a current Trustee of Women’s Aid Federation of England, Jen has been a registered volunteer with Volunteer Bristol for four years and is a Member of the ICAEW Charity & Voluntary Sector Specialist Group.

Jen sits on the South West & Wales Regional Engagement Forum of the Charity Finance Group and makes regular contributions to articles in national publications – most recently AccountingWEB and Charity Finance Focus (produced by the CFG). She is also a regular speaker on charity finance and governance matters.

Her firm is a corporate member of the Charity Finance Group and was shortlisted in two categories for the AccountingWEB Practice Excellence Awards 2016. This is in recognition of the company’s innovative work with charities and NFPs to streamline their finance functions through adoption of new technology.


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