When
one-in-ten of the top hundred charities failed to submit their
reports and accounts on time last year, the Charity Commission
went on the war path.
Aside from the public naming and shaming of the procrastinators,
it launched its File Early campaign to snap everyone into
action. The campaign, in addition to new guidance, step-by-step
procedures for filing and targeted reminders, involved the
Commission’s chief executive Andrew Hind personally
contacting the top 100 and getting them to commit to hitting
the statutory targets.
The efforts paid off, with 100 per cent of the top 100 filing
on time this year, and a “record number” of charities
in general doing so, according to Sheila Birch, head of information
compliance at the Commission.
So what was the problem last year? On average it takes a FTSE100
company five and a half months to file, so why should this
be any different with the top 100 charities? “Where
they were late, it was usually as a consequence of something
to do with the auditors or something to do with oversight
of the administration internally, or just that figures hadn’t
been available,” says Birch. “No one was wilfully
trying not to comply with their legal statutory reporting
requirements.”
That’s all well and good, but is it good enough? As
the top charities set the pace for the entire sector, having
the resources to do so, surely even taking the statutory maximum
of 10 months to file is taking too long.
“I have difficulty with [not filing on time] because
I can’t understand why anyone from the top 100 charities
would have their accounts in late anyway,” says Keith
Hickey, chief executive of the Charity Finance Directors Group.
“When I was at Help the Aged our accounts were end of
April and they went in in September – so four and a
half to five months. I see no reason why we should be any
different to FTSE. The only difference that we have is the
voluntary nature of trusteeship and therefore recognising
the meetings are around that.”
Hickey points out that taking nine months – or more
– to file means that it is close to a year gone by in
terms of what you are actually reporting. People looking for
information on the charity will be accessing data that ends
up being 18 or 21 months out of date. “To me it’s
about the positive of getting information to stakeholders
as soon as you can, so that they have relevant and up to date
information,” he says.
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Getting it right
It was with this in mind that last year The Children’s
Society decided to tighten up on the administration of their
filing, and committed to getting in their reports and accounts
to the Commission within six months – they hit their
target, while a majority of the top 100 charities were closer
to the 10 month mark. And it was not that difficult to achieve
according to Charles Nall, the charity’s corporate
services director.
“From an early stage in the process, we brief and
work with staff outside of finance, such as local financial
administrators,” Nall says. “We also work
closely with our auditors, KPMG, to ensure an early audit
timetable can be met. This year we had a dry run to
see if we could deliver a report and financial statements
to a May trustee board and an AGM in July. We
made good progress on this and we will target the same
timetable in 2008.”
The process has not been without challenges, though, particularly
ensuring that year-end procedures are carried out across
the entire charity, which Nall describes as a very dispersed
organisation.
“Obtaining the operational stories that inform the trustees
report requires careful planning and briefing. Briefings
are sent out in good time and year end preparatory
work starts in February. The shorter the timetable,
the tighter the version control needs to be because more
people are working on and editing the accounts and annual
report at any one time.”
The Children’s Society aimed to beat six months this
year, and they are on track to do so. “We should be
just inside six months again. The main constraint on us
is the AGM date,” Nall says.
Of course, the Commission points out that it is legal to
file accounts ahead of the AGM, and cites the false belief
that it is not legal as one of the constraints to filing
on time. Nall acknowledges this, but says: “We feel
it is an important courtesy to the members at the AGM to
give them the final say before filing takes place.
“The big advantages of working to a July AGM timetable
are that it gives the trustees flexibility over organisational
reporting to the members, it frees finance’s resources
up early in the new financial year and the new year’s
accounts open early for users with the year end adjustments
made.”
For advice on getting the procedure right for filing early,
or simply on time, the Commission’s File Early website
provides handy timetables, all of the statutory requirements
and links to further guidance.
Visit: www.charity-commission.gov.uk/
investigations/fileearly.asp
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