The Charity Commission has revealed the findings of its review of accounts filed by charities in its ongoing class inquiry.
The inquiry is looking into charities who fail to file accounts properly in two consecutive years, so-called ‘double defaulters’.
The review looked at accounts filed by 27 charities in the inquiry, and found that six had closed and failed to tell the commission. Six had filed their accounts with Companies House but failed to submit them to the commission, and two had submitted accounts without the correct external scrutiny and had been ordered to re-submit.
In a statement announcing the results, the regulator said most accounts reviewed were of good and acceptable quality. Charities using the commission’s accounts templates were more likely to have good quality accounts.
However, the regulator said it was clear that not all trustees understood the external scrutiny requirements.
Fourteen of the 32 charities that were placed into the class inquiry by the commission in 2015-16 submitted their accounts during the year, as did 13 from the 2014-15 class inquiry.
The commission’s accountants closely scrutinised 69 copies of accounts from these 27 charities. These filings led to £15.5m of charity income being accounted for to the general public through the commission’s register.
Charity Commission head of accountancy services Nigel Davies said the class inquiry has ensured compliance in the charity sector. It was disappointing that regulatory action was required to ensure compliance, Davies said, and charities showed the ability to report well when they put the effort in.
“However, it is concerning that the underlying attitude to compliance on basic duties and accountability to donors and the public remains poor,” Davies added. “This report sends a clear message to trustees that we will take robust action to tackle non-compliance so that charity funds are declared and accounted for on the register of charities.”
Access the report here.