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New and updated Charity Commission Guidance | |
Over the last few months, the Charity Commission has released new guidance in a couple of areas relating to Charity finances, namely in respect of internal controls and investments. In this article we take a brief look at each. | |
Internal Controls At the end of April 2023 the Charity Commission published updated guidance on internal controls for charities “Internal Financial Controls for Charities (CC8)”. The guidance has been updated to reflect changes in legislation and practice over the last few years, particularly brought about by more modern payment methods and changes to operating practices because of the pandemic. | | | |
The guidance has been significantly updated to look at more detailed financial controls that a charity should have in place. The guidance also now covers fraud and cybercrime, the risk of operating overseas and the risks of corruption and bribery. Guidance on internal audit and the role of the audit committee has also been updated with a specific direction that if a charity is required to have an external audit it should have an internal audit committee.
In addition, there is detailed practical guidance on expenditure, which not only covers authorisation of invoices but also considers other controls that may be required such as purchase ledger reconciliations, authority limits, purchase orders and whether invoices are paid on time, as well as the need to have appropriate controls for any reimbursed expenses. | |
For payroll, the guidance includes a reminder that this is not only around the payroll cost controls but also covers controls around starters, leavers and changes to employees’ data from their contract to their bank details. As mentioned, the guidance also provides advice on modern methods and issues such as crypto assets and payment methods like Apple or Google Pay, bank mandates and use of credit cards. | | | |
There are also now sections which cover: - Internal financial controls for banking
- Internal financial controls for income
- Internal financial controls for expenditure
- Internal financial controls for payments to related parties
- Internal financial controls for assets and investments
- Internal financial controls for loans
- Internal financial controls for hospitality, including gifts
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Recent changes to filing annual returns | |
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As of Tuesday 1 August, Charities have no longer been able to file annual returns with the Charity Commission's old system: filings now have to be done via a new portal, the 'My Charity Commission' account. Accounts have initially been set up for named Commission contacts for each charity and the Commission intends that ALL trustees will eventually have an account, and therefore a direct link with the regulator.
The Commission's Chair has said "I have every confidence that the service will prove a ‘game changer’ in our relationship with individual trustees. Helping them understand what is expected, supporting them to meet their responsibilities, preventing problems from arising in the first place." Mike Bath, Partner at James Cowper Kreston, said “There is a clear implication here the Commission views some of the regulatory failures that have occurred as being the result of a lack of knowledge/understanding on behalf of individual trustees, and it will be interesting to see if facilitating greater trustee-regulator contact changes the frequency or nature of future problems within the sector.” | |
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James Cowper Kreston is a leading firm of accountants and business advisers, with offices across the South of England. We deliver focused, innovative advice to a diverse range of businesses and individuals helping our clients to maximise their potential.
If you would like to discuss either of these topics further, then please contact a member of our Charities & Education team at James Cowper Kreston.
Kind regards Alex Peal | Joint Managing Partner T: +44 (0)7771826264 | E: apeal@jamescowper.co.uk | |
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The information in this newsletter must not be relied on as giving sufficient advice in any specific case. | | | |
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