Commission board member complains of 'basic errors' in charity accounts

01 Jul 2019 News

Mike Ashley, second from left, speaking at ICAEW's Charity Conference 2019

A board member of the Charity Commission has said that there are still too many basic errors in accounts being filed with the regulator.

Speaking at the ICAEW’s Charity Conference 2019 on Friday, Mike Ashley criticised charity accounting standards and also said that serious incident reports had more than doubled in the past year.

Ashley said part of his role was to improve charity accounting standards, which he said were not “atrocious” but “worthy of improvement”.

He said: “We have just done yet another review of accounts and regrettably there are some basic errors that do not seem to be being picked up by auditors and independent examiners.

“We are not again taking the position that we are going to refer everybody to the institute for immediate chastisement. But I do think there is a way we need to encourage people to up the standard.

“A very simple example is a seeming lack of understanding of the requirement to disclose transactions with related parties or to confirm that there are no transactions with related parties.”

Ashley said some auditors and independent examiners of charities were unqualified and said he would like to have a list of those who were qualified to check against.

He said: “We have come across a number of instances recently where it would appear that the independent examiners in particular are not qualified to do the work they have been asked to do.”

Accounts overhaul

Ashley said that following the recent SORP governance review, the Commission was focused on how to “bring more relevant information in front of those people who might be donating”.

He said: “We have looked at various things. Can we do extracts of the accounts in some form? We are potentially looking at doing more of that.

“We have had discussions about should we start producing ratios, which I am dead against because I think every charity is pretty unique and there is a danger in producing ratios.

“What I think we can do at the Charity Commission is produce the base information in a more easily assimilated and compared fashion.”

'Cash strapped' 

Ashley said the regulator was “cash-strapped, like most arms of government”.

“We, I confess, have been struggling over the past year, particularly given the volume of safeguarding reports that came in, particularly from the overseas charities,” he said.

“That swamped the team for quite a while, I have to say.”

Ashley said the Commission had made a “big push” to encourage more charity auditors to file serious incident reports, which he said had “had an effect”.

He said: “In the year to this April, which we are about to report in our annual report, the number of reports we got was somewhere over 700, compared to less than 300 the year before. So, it’s going up.”

Civil Society Media's Charity Finance Summit takes place on 10 October and incorporates streams VAT & Tax, Strategy & Risk and Investment, making it the key learning and networking event for charity finance teams Find out more about the programme and book online. 

 

 

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