Today I am referencing a bit of a one hit wonder which is relevant to both the weather we are currently seeing and the most recent investigation announced by the Charity Commission. The song in question is Informer by Snow. I don’t know anyone that knows the lyrics – even with them written down, I know no one that can recite them or understand what’s going on. And that’s pretty much the question being asked by the Charity Commission right now of the Cat Survival Trust – a charity based in Welwyn dedicated to the protection of big cats, including snow leopards.
So what’s happening? Well basically, no one knows – according to the Charity Commission, they have not filed accounts for 11 years nor responded to inquiries made. Accordingly, a formal investigation into the activities of the charity has now been opened which amongst other things is seeking to understand to what extent the trustees have not met their duties as trustees.
An interesting feature of this case is that the list of trustees does not detail the appointment dates and so it is not possible to know if the historic breeches are the fault of ex trustees or the current board. What is known, is that the position for those listed is going to be uncomfortable with some awkward questions!
What this case does show us though, is that there is a need for all charities to be compliant and for trustees to undertake their duties to the full extent required. All too often, trustees with a passion for a particular charity get involved beyond their understanding which can lead to problems if they make decisions that they should not have done or don’t take actions that they should have done. Without wanting to speculate I would imagine that the trustees of The Cat Survival Trust are very passionate about the survival of big cats and ensuring they remain protected but perhaps don’t fully understand the legal duties they have. Fortunately the Charity Commission have some excellent guidance and a starting point for any new trustee (or indeed a long serving trustee who perhaps wishes to ensure they are up to date with their requirements) I would recommend the 5 minute guides it publishes.
There are also many other sources of help – your accountant or solicitor would be very happy to meet for a chat to help the board understand what they need to do if there are any grey areas for the board. Indeed, the charity you are helping should provide an induction process and ongoing support and mentoring to ensure you are meeting your legal requirements.
It is worth noting that there is a legal duty for trustees to act in the best interest of a charity and that any breeches can be prosecuted and result in personal sanctions if the legal duties have not been met. This can be a very serious matter and it is vital that trustees undertake to develop and maintain the required level of skill and ensure that the charity is compliant and well governed.
The case also highlights the vital importance of having a balanced board with all aspects of running a charity covered, one of which is of course ensuring that all finances and accounting aspects are covered. I have previously written about identifying skills needed on a board (read insight here) and how those gaps might be filled. Even if you think the board is covering all skills at present, it never hurts to have a review and ensure this is the case.
It will be interesting to read the findings of this investigation and what lessons can be learned from it, but in the meantime, please make sure you are meeting your duties and that your charity is compliant. Your local UHY Hacker Young office will only be too pleased to meet with you to discuss any areas of concern and support you in meeting your financial requirements.
The next step
For any further questions regarding this insight, please get in touch with David Allum on d.allum@uhy-uk.com, or your usual UHY adviser.
