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Charity Commission publishes two reports on charity accounts and reporting

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27 Mar 2015

The Charity Commission has published two reports reviewing how charities are meeting the requirements on public benefit reporting and analysing the overall quality of charity accounts.

Two samples of charity accounts were taken, covering successive years, from the register of charities in September 2014. 108 charities were reviewed for accounting years ending during the 12 months to 31 March 2012 and 107 charities were reviewed for accounting years ending during the 12 months to 31 March 2013.

All registered charities are required to publish a trustees’ annual report which sets out the activities that the charity has undertaken for the public benefit. Charities are also required to include a statement as to whether they have had due regard to the Charity Commission’s guidance on public benefit.

In its review, the Charity Commission found that only 27% of charities in 2011/12 and 35% in 2012/13 were meeting both of these requirements. The quality of reporting was highest among the largest charities (those with income in excess of £500,000). In its report the regulator confirmed that it will be taking a number of actions to make trustees aware of their reporting obligations.

The regulator also looked at the ‘the percentage of charity accounts monitored found to be of acceptable quality’, basing its assessment of ‘acceptable’ on how useful the set of accounts was considered to be to the users of those accounts, rather than on strict technical compliance with the Statement Of Recommended Practice (SORP). It considered 54% of charity accounts in 2011/12 and 68% in 2012/13 to be of ‘acceptable quality. As with the public benefit reporting review, the percentage of acceptable accounts was highest among the largest charities.

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