cipfa org uk Charity accounting opportunities John Maddocks

cipfa. org. uk Charity accounting … … opportunities … John Maddocks

cipfa. org. uk The charity landscape § § § § Over Most Over Over 160, 000 charities in England & Wales charities are small 123, 000 (75%) income < £ 100, 000 143, 000 (87%) income < £ 500, 000 900, 000 trustees 2, 600, 000 employees 1, 900, 000 volunteers Source: Charity Commission Dec 2013 statistics

cipfa. org. uk Legal structures Legal form Governing document Other regulator Association Constitution No Trust deed No Memorandum and articles of association Companies House Rules FCA Trust Company Industrial & Provident Community Benefit Society Charitable Incorporated Organisation Constitution No

cipfa. org. uk Legislation & regulation § The Charities Act 2011 consolidated the 1993 Act and other related enactments www. legislation. gov. uk/ukpga/2011/25/contents § Charities (Accounts and Reports) Regulations 2008 www. legislation. gov. uk/uksi/2008/629/contents/made § Charity Commission is the registrar and regulator for charities in England Wales www. charitycommission. gov. uk/ § Other legislation and regulation depending on legal structure

cipfa. org. uk Annual returns § Income > £ 10, 000, file Annual Return within 10 months of end of financial year § Income > £ 25, 000, accounts attached § If charity is also a company, then a Company Annual Return also has to be completed § Accounts to Companies House within 9 months

cipfa. org. uk Annual statement of accounts § Trustees responsible for preparation of accounts § Gross income of £ 250, 000 or less – can opt for receipts and payments accounts but only if: § Unincorporated or § CIO § Other registered charities comply with the SORP

cipfa. org. uk Charities SORP accounts include … § § § Trustees’ report Statement of Financial Activities (SOFA) Summary income & expenditure account (in certain cases) Balance sheet Cash flow statement Notes to the accounts § NEW SORPs due out summer 2014 (FRS 102 & FRSSE) § For implementation January 2015 § www. charitysorp. org

cipfa. org. uk Annual audit or examination § Charity regulations set out thresholds for audit and independent examination § Thresholds can be amended in future § Three types of assurance: a. Audit b. Independent examination by someone on prescribed list (income up to £ 500, 000) c. Independent examination by someone with requisite ability income (income up to £ 250, 000)

cipfa. org. uk Independent examiners Income up to £ 500, 000 & assets under £ 3. 26 m. Prescribed bodies: § § § Institute of Chartered Accountants in England Wales Institute of Chartered Accountants of Scotland Institute of Chartered Accountants in Ireland Association of Chartered Certified Accountants Association of Authorised Public Accountants Association of Accounting Technicians Association of International Accountants Chartered Institute of Management Accountants Institute of Chartered Secretaries and Administrators Chartered Institute of Public Finance and Accountancy Fellow of Association of Charity Independent Examiners

cipfa. org. uk Audit or independent examination Gross income and asset thresholds Audit Ind exam (listed) (ability) More than £ 500, 000 or assets over £ 3. 26 m Yes No No £ 500, 000 or less Yes No £ 250, 000 or less Yes Yes Guidance at: www. charitycommission. gov. uk/publications/cc 32. aspx

cipfa. org. uk Fund accounting Restricted Endowment funds Permanent Restricted income Expendable Unrestricted General funds Designated funds

cipfa. org. uk Charity trading § Understanding § Primary purpose trading. Directly in furtherance of the charity’s objectives. § Ancillary trading. in support of the main purpose. § Small scale trading § Trading subsidiaries § VAT business and non-business

cipfa. org. uk Associated services § § Payroll HR and Employment law Tax Business planning

cipfa. org. uk Current CIPFA activity includes … Charities and social enterprises panel TISonline – new charities & social enterprises stream CIPFA Certificate in charity finance and accountancy CIPFA Certificate in financial reporting for academies Courses & workshops: Charity accounting, commissioning, diploma in sustainable investment in 3 rd sector § Research: International NFP accounting standard § Publications § § §

cipfa. org. uk CIPFA resources include … § TISonline: Charities & social enterprises § Social enterprise and public service delivery (new edition in 2014) § Accounting for academies (2013) § Social enterprise business planning & assessment (2013) § Accounting for payment by results including social impact bonds (2012) § Financing social enterprise (2012) § Staff mutuals (2012)

cipfa. org. uk Questions? § TISonline: Charities and social enterprises stream www. tisonline. net/socialenterprise/default. asp § Charities & Social Enterprises Panel: www. cipfa. org/Policy-and-Guidance/Technical-Panels -and-Boards/Charities-and-Social-Enterprises-Panel § John. maddocks@cipfa. org. uk