Throughout 2025, charities across the UK have been navigating a perfect storm facing rising costs, reduced public funding and escalating demand. Financial resilience is no longer aspirational; it’s existential. Charities must move beyond goodwill and embrace robust financial discipline: timely management accounts, dynamic cashflow forecasting and a reserves policy that’s more than a footnote.
Governance under pressure: from intention to accountability
Governance structures are showing signs of fatigue. A rise in reported failures reveals that good intentions alone cannot sustain oversight. Trustees must be skilled, engaged and accountable. A board skills audit is no longer optional, it’s essential to identify gaps, ensure decisions are challenged constructively and confirm that governance is active, not passive. Governance must be understood as a living system of accountability, not a compliance checklist.
Tip: Does your board have the right mix of skills and experience? Are trustees actively engaged and challenging decisions constructively?
Cybersecurity and fraud: the silent threat
Digital vulnerabilities are growing, yet many charities remain underprepared. Basic controls - segregation of duties, encryption, fraud awareness - are frequently neglected. A thorough review of internal systems can expose hidden risks and enable proactive mitigation. Even small charities can begin with free tools and staff training. Cybersecurity is not a luxury - it’s a necessity for operational integrity.
Tip: When did you last review your internal controls? Are staff trained to spot fraud and cyber risks?
Demand vs capacity: bridging the gap
Charities are being stretched thin and asked to deliver more with fewer resources. The widening gap between demand and capacity requires strategic clarity. Organisations must prioritise core services, explore collaborative partnerships and ensure impact reporting is both transparent and credible. Auditors play a critical role in ensuring financial statements reflect reality, not optimism, ensuring stakeholders can make informed decisions.
Tip: Are you clear on which services are core, and which could be delivered in partnership? Is your impact reporting honest and transparent?
Regulatory change: navigate or fall behind
From the Economic Crime Act to VAT reforms and updates to the Charities SORP, regulatory change is relentless. Compliance is no longer just about avoiding penalties, it’s about safeguarding reputation and mission integrity. Auditors should be helping clients interpret these changes, enabling trustees to understand implications and act decisively.
Tip: Are you keeping up with new regulations? Do trustees understand the implications of changes like SORP updates or VAT reforms? Sign up for UHY’s charity updates or request a regulatory briefing from your auditors for your board.
From oversight to insight: the auditor’s evolving role
The charity sector is undergoing transformation. Financial resilience, governance integrity, digital security and regulatory agility are now foundational pillars. Your external auditors should be much more than a compliance checker, they should be strategic partners. Our role is to ask the hard questions, offer practical solutions and help build structures that endure. With the right scrutiny and guidance, the sector can emerge not just intact but stronger, smarter and more sustainable.
Tip: Is your auditor asking the right questions and offering practical solutions? Are you using audit findings to strengthen your charity, not just tick boxes? If not, get in touch! We see our role as helping charities build structures that last, by challenging assumptions, sharing best practice and supporting continuous improvement.
If you would like more information about the services we provide our charity clients, please visit the charity section of our website or get in touch using the form below.
You can also read more about why charities choose UHY.
