Regulator warns many charities failing to meet reporting requirements

The watchdog has recently assessed the quality of the reports and accounts typically submitted by third sector organisations and is concerned that many are falling short of the standards expected when it comes to public benefit reporting requirements.

Last autumn, the Charity Commission selected a random sample of 109 annual reports from the register of charities.

Assessing the situation, the regulator said: “As in the previous two years, there were several poor quality submissions.

“Two per cent of charities did not file any form of report and a further five per cent provided notes of their annual general meeting/a chairperson’s statement/a treasurer’s report.

“While some of these documents provided information on the charity’s activities, they fell well short of the requirement to prepare an annual report, let alone to report on public benefit.”

It is apparent that a large part of the problem is that many charities are unaware of the details they need to submit under the current arrangements and the watchdog is now looking at ways to improve their understanding.

Nigel Davies, from the Charity Commission, said that the paperwork was an opportunity for trustees to present evidence of their effectiveness to both supporters and the wider public.

Charities have been required to formally report on their public benefit since the introduction of rules in 2008.

Royds has a wealth of experience advising charity clients on the laws and regulations affecting the sector. For further advice on governance and regulatory issues please contact Deanna Hurst or Tony Millson