PrintDon't leave it to the last minute. File early if you can
Nigel Davies, Deputy Head of Accountancy Policy, explains the Charity Commission's new campaign to encourage charities to file their annual report and accounts early - and the guidance available to help beat the deadline.
Why file early?
With GuideStar UK up and running, and the Charity Commission displaying charities' report and accounts on its website, information on charities is now readily accessible. Funders, donors, Public Service Commissioning Bodies, beneficiaries and supporters all have an interest in this information - so if a charity has already prepared its report and accounts, the question must be why not file early? The documents will be available in the public domain eventually anyway, so why not ensure that anyone with an interest in your charity has access to the most up-to-date information to be had as soon as possible?
Why the campaign?
The Commission identified that of the top 100 registered charities, 11 failed to file within the statutory deadline, leaving some £6bn of funds unaccounted for on a timely basis. Often, evidence suggests that charities believe that accounts must be approved at an AGM before accounts can be sent, or wait to receive the Annual Return mailing from the Commission before submitting. In fact, once the accounts have been signed by the trustees and audited (or independently examined where appropriate), they can be filed straight away. This can even be done quickly and conveniently on line, via the Commission's web site.
Charities filing late are of real concern to us, and we regard prompt filing as an indicator of how well the charity is being run. The deadline for filing within ten months of the financial year-end is very generous, and the professionalism of the sector, particularly in the context of public service delivery, is damaged where its performance is shown to be poor against commercial practice. By contrast, while the top 100 registered charities took on average 8-9 months to file, FTSE 100 companies take only 5-6 months. Public confidence in the integrity of charity is damaged where donors, supporters and other interested parties are unable to view the trustees' annual report, which is a statutory requirement (Charities Act 1993 section 45), the accounts and the report of the auditor or independent examiner.
What guidance is available?
The Charity Commission web site has a wealth of information, including model example reports and accounts and links to early adopters of SORP 2005 and good practice receipts and payments accounts. Packs for non-company charities below the audit threshold are available for simple receipts and payments or accruals accounts, all of which can be accessed online at:
http://www.charitycommission.gov.uk/investigations/sorp/default.asp
Additional guidance concerning planning your year-end accounting and reporting processes and the role of the AGM can be found via the web link: http://www.charitycommission.gov.uk/investigations/fileearly.asp