Charity Commission Crackdown

The Charity Commission seems to be taking a hard-line approach on charities failing to file relevant financial documents on time.

In July, this year we saw the Charity Commission issuing its first official warning to a charity. The warning was given to National Hereditary Breast Helpline after the charity found itself in financial difficulty. The Charity also failed to comply with the Charity Commission’s action plan to put right “lack of financial controls”.  According to the Commission, the trustees have taken some action already and that it will continue to monitor the Charity. This is a “shot across the bow” for other charities who have weak financial controls.

Last week the Charity Commission opened inquiry into a charity that had not filed financial statements since it was set up in 2015. The Charity Commission sighted that there were serious regulatory concerns about the management and administration of the charity. The inquiry is also going to look at if the trustees are “fit” to discharge their legal duties in relation to the charity.

Maybe the above two are signs of things to come if charities step out of line in relation to finance, systems and controls.

We’re increasingly seeing cases of charities, both small and well-known, in which huge errors are being made due to negligence, mismanagement of documents and late submissions to HMRC. In addition, there have also been more cases of internal fraud within charities. With both happenings, it’s never been more important to improve internal governance and systems. It is also very important to be transparent and regain public trust.

We previously released a document to help with internal governance for trustees of charities, you can read it here.

We also have an infographic on how to spot and prevent fraud within your charity which you can view here.

For more advice, contact our partner Suda Ratnam on 020 8418 2681 or suda.ratnam@raffingers.co.uk

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