Charity regulators launch SORP governance review

22 Aug 2018 News

The four charity regulators in the UK and Republic of Ireland have announced they are holding a governance review of the SORP committee after concerns were raised about its composition and approach.

The SORP committee sets the Statement of Recommended Practice, the rules governing charity accounts.

A review was agreed by the committee earlier this year after former member Joe Saxton resigned in protest at the lack of transparency in charity accounts.

Today the regulators launched the review, which will aim to “gain assurance that the SORP-making process commands confidence and addresses the transparency and public confidence challenges facing charities”.

Its other main aim is to “assure the Financial Reporting Council (FRC) that any revised arrangements adhere to the FRC policy on developing SORPs”.

The charity regulators said that “as a minimum” the governance review will consider:

  • the composition of the advisory SORP committee
  • identification of, and engagement with, key stakeholders in the SORP development process
  • the extent to which the views of key stakeholders have been recognised in the process
  • potential of changes to membership of the SORP committee should the FRC agree the remit of the SORP to make recommendations covering non-statutory financial reporting by charities

The governance review will be undertaken during 2018 and any recommendations from it will be taken forward by the SORP-making body in 2019 in time for the development of the next full SORP, tentatively scheduled for 2021.

Panel appointed

The review will be undertaken by an oversight panel comprising Sarah Atkinson, director of policy, planning and communication at the Charity Commission for England and Wales, Judith Hayhow, head of support services at the Scottish charity regulator OSCR, Punam McGookin, head of charity services at Charity Commission for Northern Ireland (CCNI) and Tom Malone, head of compliance and enforcement at the Charities Regulator, which covers the Republic of Ireland.

The panel, which will also include an observer nominated by the FRC, will determine the conduct of the review, the taking of evidence, publicising of the process, and the identification and invitation of participants.

Staff of the Charity Commission for England and Wales and OSCR will assist the panel.

Gareth Morgan, emeritus professor of charity studies at Sheffield Hallam University, has been appointed to oversee the work of the panel.

Morgan said: “As someone who has had a long interest in the Charities SORP, both as an academic researcher and as a practitioner, I am very much aware of its significance in achieving massive improvements in charity accounts and reporting since the first modern SORP was issued in 1995.

“In the circumstances, it is entirely right to begin with a review of the governance processes in developing new versions of the SORP, and I am honoured to have been asked to chair that review.”

Laura Anderson, OSCR’s head of professional advice and intelligence and one of the joint chairs of the SORP Committee, said: “The review comes at a critical juncture as we look to take stock and develop the next SORP with the needs of all four charity law jurisdictions in mind.

“To be effective we need a SORP process that is fully representative and delivers a SORP that it is clear, accurate and meets the reporting needs of the users of charity reports and accounts whilst upholding the standards issued by the FRC.”

The review follows the addition of the CCNI as joint members of the SORP-making body in June.

The FRC have also approved the inclusion of the Irish Charities Regulator in the body but this is subject to the SORP being formally adopted for use in the Republic of Ireland and made mandatory for Irish charities.

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