13 Dec 2017

UK charity regulators have urged auditors and independent examiners to be more proactive about reporting concerns they come across in charity finances or governance during the course of their work.

UK charity regulators have urged auditors and independent examiners to be more proactive about reporting concerns they come across in charity finances or governance during the course of their work.

Reporting of relevant matters of interest to UK charity regulators is a joint publication from the Charity Commission for England and Wales, the Scottish Charity Regulator (OSCR) and the Charity Commission for Northern Ireland.

Charity law provides auditors and independent examiners with a legal protection when they exercise their discretion to report significant matters that they believe relevant to the work of the charity regulator.

The Commission is keen to encourage such reporting because it provides useful information on significant issues facing charity trustees and gives the Commission an opportunity to provide advice and guidance to charity trustees or to make a timely regulatory intervention if this is judged appropriate to the charity's circumstances.

The regulators have provided examples of where reporting would be helpful by auditors and independent examiners, advocating a 'when in doubt, report it' approach and including examples of relevant matters. For example:

  • insecure funding putting beneficiaries at risk - for example, a charity established to care for vulnerable adults and children is reliant on a single contract for 90% of its income in the reporting period and the trustees are uncertain whether they will be able to secure future funding at the current level when the contract is renewed the following year
  • donation that may indicate vulnerability to abuse - for example, a large donation is made via an intermediary organisation, restricted to teaching the strict beliefs of a particular religion and requires educational materials to be purchased from a specified overseas source
  • lack of financial oversight by the whole trustee body - for example, minutes show that the finances of a large charity are only considered annually during a presentation from the CEO

You can find out more and download the publication from the Charity Commission website.