Charity compliance update: GE2017, public benefit reporting, consultations

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Jen Gerrard
Managing director
Gerrard Financial Consulting
Columnist
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Jen Gerrard of Gerrard Finnancial consulting provides a round up of news and consultations from the world of charity compliance during the last month. 

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General election 2017 – campaigning activity do’s and don’ts

With the announcement of the snap general election on 8 June 2017, there will undoubtedly be a watchful eye over the campaigning activities of charities.

Charities can undertake political activity if it is in support of their charitable purpose and if political activity is taking place alongside other areas of work.

Trustees must be satisfied on reasonable grounds that any activities pursued for the election are likely to be an effective means of furthering or supporting the purposes of the charity and must be able to justify the resources applied.

Charities must be careful to ensure that their election campaigning and messaging is not in breach of the Lobbying Act legislation. Therefore, they need to make sure that all messages and campaigning work are:

  • Not party political – e.g. supportive or critical of a particular party
  • Not promoting a particular candidate
  • Not influencing how a member of the public may vote – whether purposefully or not

Similarly, a charity cannot support, endorse, retweet campaigns or messages from other organisations that could be seen to do any of the above.

Charities who are going to spend more than £20,000 on campaigning around the general election (either by themselves or as a partner in a campaign) where their activities could reasonably be perceived as having the ability to influence how a member of the public may vote have to register with the Electoral Commission as a ‘non-party campaigner’.

To refresh the memory as to what is and is not permitted under the regulations, visit the CCEW’s CC9 guidance here.

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Reporting matters of material significance: guidance for auditors and examiners

On 12 April 2017 the Office of the Scottish Charity Regulator (OSCR), the Charity Commission for England and Wales (CCEW) and the Charity Commission for Northern Ireland (CCNI) jointly published a revised list of nine matters of material significance to assist auditors and independent examiners in meeting their reporting requirements.

Auditors and examiners have a legal duty to report matters of material significance to the regulator.

The new guidance is effective from 1 May 2017; however, auditors and independent examiners must carefully consider if a matter identified before this date may still be reportable as a discretionary matter.

A matter becomes reportable as soon as the auditor or independent examiner:

  • becomes aware of it;
  • intends to offer a modified audit opinion, an audit opinion with an emphasis of matter or material uncertainty regarding going concern; or
  • identifies one or more concerns about the charity’s accounts, resulting in a qualified independent examination report

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Public benefit reporting – a bit hit and miss?

On 21 April 2017, the CCEW published a report into their scrutiny of charity accounts submissions. 54% of charities (58) reviewed did not meet the public benefit reporting requirement.

Out of these charities, 13 failed the requirement as they did not describe the difference that their charity had made; 21 charities did not include the statement that they had complied with the public benefit requirements and read the CCEW’s guidance and 24 charities did not do either.

That said, it was found that 75% of the accounts were of acceptable quality in meeting the basic needs of readers.

If we look at the small charities sub-sector, the CCEW found that 55% of the 109 small charity accounts scrutinised, were of acceptable quality. This was an improvement in the quality of reporting, up from 47% achieved in the previous 2 years.

The key message here is that charities who prepare their own accounts are encouraged by the CCEW to adopt their templates, ensuring that all bases are covered and that their submissions are fully compliant.

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Use the Charity Commission website to answer your query

In an ongoing push for electronic interaction, the CCEW published their latest blog on Friday (5 May) encouraging us to use their website to answer queries in the first instance.

Top queries to the CCEW this month included:

  • How to change a correspondence or email address
  • How to request a new password
  • How to get a copy of a governing document
  • How to submit an annual return

With a response time of 15 working days - and finding a telephone number being akin to finding a needle in a haystack - the CCEW are clearly expecting charities to get online and read the guidance available.

Changes to salary sacrifice rules from 6 April 2017

Last month saw key changes to salary sacrifice schemes from 6 April, as set out in the Finance Bill 2017. Make sure you’re up to date and advising your charity clients appropriately – read AccountingWEB’s own comprehensive update here.

Stronger Charities for A Stronger Society: ICAEW Manifesto comparison             

Back in March of this year the House of Lords Select Committee published their Stronger Charities for a Stronger Society report.

This month the ICAEW revisited the report, comparing it to their Charities Manifesto, launched at their 2016 Annual Charities Conference, with some interesting findings. Read their update here.

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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 responses:

  • Charity Commission for England and Wales:

o    The use and promotion of complementary and alternative medicine (CAM): making decisions about charitable status – published 13 March 2017 with a closing date of 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 following consultations are closed with feedback analysis pending – watch this space for an update in future briefings:

  • Charity Commission for England and Wales:

o    Updating the framework for independent examination - closed on 30 September 2016 but was intended to apply to accounting periods ending on or after 31 March 2017.

o    Reporting serious incidents in charities - closed on 12 January 2017.

We’re bracing ourselves at this end for the onslaught of feedback and updated guidance!

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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