4 October 2018
The Charity Commission has recently published the result of its latest monitoring reviews of charity trustees’ annual reports and accounts, and it is urging charities to do better.
All registered charities must publish a trustees’ annual report, setting out the charity’s activities for the public benefit, so the public can understand exactly what the charity does and how their donations are being used.
The findings reveal a modest improvement in the quality of public reporting compared with last year, but the regulator says that too many charities are still falling short in this area.
The Commission examined whether the charities’ trustees’ annual reports and accounts as a whole met readers’ needs, based on a range of criteria - link here.
Incomes up to £25k
For the sample of charities with incomes of £25,000, the Commission found that 74% of the trustees’ annual reports and accounts reviewed were of acceptable quality, meeting the basic benchmark set by the Commission.
The most common reason for inadequate reporting was that the trustees’ annual report did not explain the charitable activities the charity had carried out. For more details as to how to produce an annual report, see here.
Small charities
In addition, for the sample of small charities, the Commission found that 64% of the charities provided trustees’ annual reports and accounts of acceptable quality, meeting the regulator’s basic benchmark. The main reason for inadequate reporting was that the charity failed to provide one or both of the trustees’ annual report and the accounts.
The Commission has provided regulatory guidance to 89 charities included in the review in order to help the trustees improve the quality of future trustees’ annual reports and accounts.
As part of its proactive monitoring work, the Commission scrutinised a random sample of 106 charity trustees’ annual reports and accounts filed with it to assess:
- How charities are meeting the public benefit reporting standards
- Whether the accounts meet readers’ needs, including a separate samples of “small charities”
Slow improvements
The Commission’s review found that 51% of the charities reviewed demonstrated a clear understanding of the public benefit reporting requirement – a 5% improvement from last year’s result.
The majority of annual reports also included key aspects of public benefit reporting, with 71% explaining who benefited from the charity’s activities and what difference the charity had made to beneficiaries. However, this is still an area where further improvement is necessary.
If you would like to discuss this or any other matter affecting your charity, please contact me here or your local UHY charity adviser.
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