9 November 2017
The Charity Commission recently carried out research on the 2016 accounts of large charities and found that a staggering 97 charities had their accounts qualified by their auditor.
The modified opinions were for the following reasons:
- 50 charities had deficiencies in their accounting records;
- 27 charities had incorrectly valued their property and investment assets;
- 11 charities hadn’t included pension scheme liabilities in their accounts;
- Five had not prepared group accounts as they were required to do;
- Two charities had incorrectly valued their stock or grant commitments;
- Two charities were not going concerns in the auditor’s opinion.
After analysing the accounts, the Commission provided regulatory advice and guidance to these charities and made it clear that it expected them to take action to address the issues highlighted by their auditors.
Trustees of several of the charities that had not complied with the SORP stated they did not consider that obtaining professional property or pension liability valuations was a good use of charitable funds. The Commission does not consider this to be an acceptable reason for the charities’ non-compliance.
The UHY charity specialist team are proactive in identifying potential problems with a charity’s accounts early, so that problems can be rectified and audit qualifications avoided. We encourage all trustees to ensure their charity has a similar proactive relationship with their auditors, as such qualifications can be seriously damaging to a charity, as well as the general charity sector. Further Charity Commission guidance can be found in publications CC8 and CC15d.
If you would like to discuss this or any other matter affecting your charity, please contact me or your local UHY charity adviser. Alternatively, if you would like to read more charity focused blogs please click here.
