new charity accounting and reporting regulations
Post on 09-Jan-2017
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New accounting and reporting regulations
Myles McKeown
Charity Commission for Northern Ireland
Annual reporting
Charity annual reporting
Registered charities must report to the Commission annually
Introduced on a phased basis:
Phase 1: interim annual reporting – temporary arrangements apply to charities reporting on a year beginning before 1 Jan 2016.
Phase 2: full annual reporting – permanent requirements in accordance with the accounting and reporting regulations commenced 1 Jan 2016. Will apply to all registered charities.
All charities should apply full annual reporting requirements as they will be required in all subsequent years
Which arrangements must a charity report under?
Accounting and reporting regulations
Commenced 1 January 2016
Apply to all registered charities and set out:
form and content of accounts (receipts & payments or accruals) form and content of trustees’ annual report level of external scrutiny required: ind examination or audit
High level requirements
Income <= £250,000– Can elect to prepare Receipts & Payments accounts– Independent Examination (trustee assured)– Trustees’ Annual Report– Annual Monitoring Return
Income £250,001 to £500,000– Accruals Accounts (SORP)– Can be Independent Examination (must be qualified)– Trustees’ Annual Report– Annual Monitoring Return
Over £500,000– As above but full audit
Current audit requirements for NI charitable companies: Accounts prepared under Companies Act 2006 Audit exemption claimed under Companies (Northern
Ireland) Order 1986
• Watch the governing document requirements!
Full Exemption Partial ExemptionIncome < £90k and Balance
Sheet total < £1.4MIncome < £250k and
Balance Sheet total < £1.4M
No report required Accountant’s Report required
Charitable Companies
Changes to “savings” (audit) exemptions under Companies Act
New Audit and Accounts Requirements:Turnover Accounts Assurance
< £250k SORP Accruals Accounts
Suitable Independent
Person
£250k - £500k SORP Accruals Accounts
Independent Examiner
> £500k SORP Accruals Accounts Audit
Charitable Companies
Guidance available
ARR01 Charity reporting and accounting: guidance summaryARR02 Charity reporting and accounting: the essentialsARR03 Receipts and payments accounts guidanceARR04 Accruals accountsARR05 Annual monitoring return guidanceARR06 Charity reporting: Interim annual reporting arrangementsARR07 Guidance for independent examinersARR08 The trustees’ annual report and public benefit reporting
Receipts and payments accounts toolkit and an example trustees‘ annual report
When do you have to submit?
10 months after the end of first full financial period following registration – will receive 3 reminders
First reporting year requirements1 2 3
Date registered 9 April 2016 18 July 2014 3 Dec 2015
Financial year 1 April - 31 March
1 Jan - 31 December
1 Sept - 30 August
Income £240,000 £1.2 million £540,000Type Unincorporated Trust UnincorporatedInterim / full Full Interim Full
Accounts Receipts and payments
Format currently prepared
Accruals
Reports
Trustees’ annual report and
independent examiner -
trustee assured
Trustees’ annual report and audit
Deadline 31 Jan 2019 31 Oct 2016 30 Jun 2018
Annual monitoring return (AMR)
Annual monitoring return
Tapered and proportionate
Part A: All charities
Part B: £10,000 - £100,000
Part C: £100,000+ (voluntary)
Attach accounts and reports
Annual reporting: lessons learned
Over 20% of first 100 charities which submitted accounts and reports to the Commission failed testing. Reasons included:
Attached inappropriate material within PDF submitted accounts Failure to attach full information Financial statements submitted covering incorrect financial period Draft financial statements submitted Failure to provide income and expenditure figures in annual return Figures in annual return did not match those in the accounts
What happens next?
What will happen next?
On receipt of the accounts, reports and annual monitoring return the Commission will:
Publish accounts online (register of charities) Assess submitted documents Address all zero tolerance issues Potentially visit a charity
Will publish if the charity fails to submit accounts on time – status on register immediately changed to
‘in default’
Charity reporting – the register
Charity reporting – the register
Charity reporting – the register
Case Studies - Investigations
USPCA- “Long standing” board with no movement- Too much reliance on key staff- Policies & Procedures- Board drove forward change including review- Board identified further problems- Board took action to address
Training Charity- “Long standing” board with no movement- Too much reliance on key staff- Policies & Procedures- Board resigned on commencement of Commission investigation- Commission appointed trustees save charity from closure
Forthcoming matters
International Financial Action Task Force (FATF) inspection
Matters of material significance consultation closed and analysing responses
For more information visit our website www.charitycommissionni.org.uk
Thank you: Any questions?
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