Happy April everyone, the clocks have moved forward, the evenings are lighter, the weather is warmer and the cricket season is starting. One of the best times of the year!
What is it?
It isn’t an audit, but it is outside scrutiny of charity accounts and assesses whether the charity has kept proper records, that the year end accounts agree to those records and have been produced in accordance with charity law. It isn’t just ticking a box. Trustees should view it as an assurance that they are doing the right thing. However, it is an important point that the trustees are responsible for the production of the accounts: having an independent examination does not absolve them of that responsibility.
This blog gives a good overview.
Why have an independent examiner (IE)?
The answer depends on your circumstances.
Charities with income £25,000 or more must have an IE, if not a full blown audit.
Charities with income below £25,000 need not have an IE but may find it a valuable service, nonetheless. While small, charities may be operated well by a trusted, close-knit group; but as it grows it may become operated by a wider group, in different areas and handle much more money.
It is often as charities grow, particularly quickly, that proper controls are not put in place and issues creep in. Kids Company grew quickly and never implemented controls resulting in grants being spent inappropriately.
The trustees are ultimately responsible for proper financial controls, recording and production of accounts. There are many common errors made by trustees where proper financial advice has not been sought or followed.
In 2018, the Charity Commission found 25% of charity accounts did not meet acceptable standards and almost 40% of smaller charities provided inaccurate financial information. This meant charity trustees were not meeting their obligations. An IE can provide advice and support to help you, the trustees, meet Charity Commission requirements.
How can I help?
I have over 15 years’ experience of accounting, including the maintaining of financial records and accounts for charities. I am keen to work with those smaller charities, perhaps around that £25,000 threshold, to help them fulfil their requirements under charity law.
My services include: giving simple advice, account preparation and full independent examination. If you are a charity and wanted to discuss how I can help then please get in touch!
Kindly proofread by Annie Deakins at Proofnow.