The Representative Church Body Supported by Ecclesiastical Insurance

The Representative Church Body Supported by Ecclesiastical Insurance Preparing for Charities Reporting 1

Welcome to “Preparing for Charities Reporting” ‘ 2 Mr David Ritchie Chief Officer of the RCB Mr Michael Murphy Head of Claims, Ecclesiastical Insurance

o o 3 John Farrelly – Chief Executive, CRA Tom Malone – Head of Compliance & Enforcement, CRA Janet Maxwell – Head of Communications & Synod, RCB Kate Williams – Head of Finance & IT, RCB

Useful Terms before we start � Trustees of the Parish are the members of the Select Vestry � A Parish’s governing documents are the Constitution of the Church of Ireland the Diocesan Financial Scheme, along with the Ordinal and Statutes of the General Synod and predisestablishment ecclesiastical law – they are summarised in the Explanatory Memorandum on Governance document which is a 3 page document that is uploaded during registration. The original documents are lodged with the Charities Regulatory Authority annually by the Church. 4

. John Farrelly CEO The Charities Regulator

Our Mission Regulate, in the public Interest Ensure Charities comply with the law Support best Practice in the Governance, management & Administration of Charities Our Vision A vibrant, trusted Charity Sector, valued for the Public Benefit it Provides

Main Functions • Increase public trust and confidence in the management and administration of charities • Establish and maintain the Register of Charities • Promote Compliance by Charity Trustees with their Duties • Ensure and monitor compliance by charities with the Charities Act, 2009 • Carry out investigations, where considered necessary • Issue guidelines/codes of conduct for the benefit of charities and charity trustees

Concerns B: Individual Concerns Received Mar 16 to Feb 17 Since the Regulator’s establishment 609 individual concerns in respect of 324 organisations 70 60 LEGITIMACY OF CHARITY/ORGANISATION FINANCIAL CONTROL AND TRANSPARENCY POLITICAL CAMPAIGNING GOVERNANCE ISSUES FUNDRAISING ISSUES HARM TO BENEFICIARIES PRIVATE BENEFIT 50 40 30 20 10 M ar -16 Ap r 16 M ay -16 Ju n 16 Ju l-1 6 Au g 16 Se p 16 O ct -16 N ov -16 D ec -16 Ja n 17 Fe b 17 0 % RECEIVED 22% 21% 18% 17% 11% 6% 6%

Proportionate Infrastructure Statement of Strategy 2016 -18: Commitment to proportionate, fair and strong regulation of the charity sector: • • • Consultation on Accounting & Reporting Regulations completed. Consultative Panel on Charitable Fundraising. Report due for publication next week with new guidelines Consultative Panel on Governance Publication of guidance Amendments to Charities Act 2009

Who is baking the Cake? TRUSTEES are responsible for all aspects of the governance and management of their Charity – they are the bakers. Accountable to: the Charities Regulator its donors its beneficiaries the public The Board of the Authority have set out a strategy which my staff and I will implement, we will support Trustees BUT we need the input of all stakeholders to achieve our vision of A vibrant, trusted Charity Sector, valued for the Public Benefit it Provides

Who is a charity trustee? “For a company, - the directors and other officers of the company (e. g. board of directors and company secretary)” Unitary Board System – You are equally responsible. Minimum of 3 unrelated and independent trustees Disqualified: if you are adjudicated bankrupt, currently entered into a formal court approved insolvency arrangement under the Insolvency Service of Ireland, being convicted of a serious offence, being sentenced to a term of imprisonment

Core Duties 1. Comply with your charity’s governing document. 2. Ensure that your charity is carrying out its charitable purposes for the public benefit 3. Ensure that your charity is registered on the Charities Regulator’s Register of Charities 4. Ensure that your charity keeps proper books of account 5. Ensure that your charity provides an annual report and annual accounts to the Charities Regulator Further Duties Act in the best interests of your charity Act with reasonable care and skill Manage the assets of the charity Make appropriate investment decisions

Disclosure If you believe that an offence has been or is being committed under the Criminal Justice (Theft and Fraud Offences) Act 2001 you have a duty to disclose this to the Charities Regulator in writing. You must also cooperate with any investigation the Regulator may carry out in relation to your charity. This includes producing all relevant documents and records.

We are here to help Charity Trustees! Contacting us Online query system at www. charitiesregulator. ie Email info@charitiesregulator. ie Phone 01 -633 -1500 (12. 30 pm -5 pm) Address: 3 Georges Dock, IFSC, Dublin 1. Follow us on Twitter @Charities_Reg Dedicated Concerns Line: (01 633 1550 / Concerns@charitiesregulator. ie)

Draft Charity (Accounting and Reporting) Regulations Tom Malone FCCA Head of Compliance and Enforcement 21 September 2017

Role of annual accounts/reporting CR Functions Charities need to • Build trust • Provide more information • Be more transparent Accounting & Reporting • Increase public trust and confidence • Ensure accountability of charities to donors and the public

Background Charities Act 2009 – accounting and reporting provisions: S. 47 – Duty to keep proper books of account S. 48 – Annual statement of accounts S. 50 – Annual audit or examination of accounts S. 51 – Regulations in relation to audits/examinations S. 52 – Annual reports

Regulations What do they cover Format of accounts for registered charities Audit or independent examination requirements Format of annual reports for registered charities Provision of information to the Charities Regulator

Accounts of larger charities Annual statement of accounts consisting of: Statement of financial activities Balance sheet Cash flow statement Notes to the accounts Must be prepared in accordance with the applicable Financial Reporting Standards and the methods and principles of the applicable Statement of Recommended Practice.

Accounts of smaller charities • Charities with gross income or expenditure of less than agreed threshold have the option to prepare ‘simplified accounts’ consisting of: Statement of receipts and payments 1. Statement of assets and liabilities 3. Notes to the accounts Ø Format will be set out in a schedule to the Regulations 2. • The ‘simplified accounts’ option cannot be used if the charity is required to prepare accruals accounts by any of the following: o o o Its constitution Any other enactment A decision of the charity trustees

Independent Examination Where accounts are not required to be audited, they must be independently reviewed. Independent Reviewer of Charity Accounts: o An independent person who, in the reasonable opinion of the Charity Trustees, has the requisite ability and practical experience to carry out a competent review of the accounts. o If on an accrual basis – reviewer must be a member of a relevant professional body. Format/content of independent reviewer’s report specified in the regulations.

Audit • Audit threshold – TBC • Accounts must be audited where the gross income or expenditure exceeds the threshold o In the financial year, or o In either of the two preceding financial years, or o Where an audit is required by Ø The charity’s constitution Ø Any other enactment Ø A decision of the charity trustees • Duties of the auditor and format/content of the auditor’s report specified in the Regulations.

Annual Report All registered charities must make an Annual Report (return). Regulations codify the requirements in legislation. Online report signed by two charity trustees. (Declaration) All reports & accounts will be published on Charities Register. “One Click” Transparency (donors, beneficiaries, citizens). Filing accurate, complete annual report on time is the minimum standard. Format and contents of annual report are proportionate.

Annual Report Charities under lower threshold– minimal information Charities over lower threshold– additional information, including on Reserves Policy ; Explanation of deficit. Charities over audit threshold – additional information, including on: Appointment of charity trustees; Donated goods and services; Risks and risk management; planned objectives for the year ahead.

Representative Church Body of the Church of Ireland ‘ 25 Select Vestries & the Registration Process Janet Maxwell Head of Communications & Synod

Representative Church Body of the Church of Ireland Members of Select Vestries are: 1. 2. day to day managers of parishes support the delivery of public worship and pastoral ministry Select Vestry members are the trustees of the Parish 26

Representative Church Body of the Church of Ireland Select Vestry manages: i. iii. iv. v. viii. 27 Fund-raising Compliance (policy & legal) Reporting Employment Insurance Maintenance of buildings and infrastructure Holds parish property or vests same in Church trustees Manages and invests financial and other assets

Representative Church Body of the Church of Ireland Governing Documents Your main parish governing documents are • The Constitution of the Church of Ireland • The Diocesan Financial Scheme You upload • The Explanatory Memorandum on Governance 28

Representative Church Body of the Church of Ireland What is charity registration? • 3 Parts • charitiesregulatoryauthority. ie • Needs input from a team – finance and activity reports 29

Representative Church Body of the Church of Ireland • Part 1: create or activate an account • Part 2: upload governance and trustee information (mostly centrally provided) • 30 Part 3: financial and activity reports (annual)

Representative Church Body of the Church of Ireland What should your Parish have completed at this stage? 1. Parish + CHY number – information uploaded to CRA website & reported for 2014, 2015 and 2016 2. Parish using diocesan CHY number – • Dublin & Glendalough – all parishes have applied for registration • Other dioceses – parishes to apply for registration 31 in 2018.

Representative Church Body of the Church of Ireland Preparing your Parish for Charities Accounting ‘ 32 Kate Williams RCB

Agenda 1. RCB & local supports 2. Accounting for your parish as a registered charity 3. What are receipts & payment accounts and accrual accounts? 4. Explaining restricted & unrestricted funds 5. Parish bank accounts 6. What are statement of Assets & Liabilities and Balance Sheets? 33

Your Parish needs you 34 And the RCB is here to help, support and guide you

RCB & local supports � RCB providing guidance & support on the charities registration process via synod office � RCB finance department have developed a series of supports for Parishes which will be available on the Church of Ireland website under parish resources/parish finances 1) Example Receipts & Payment Accounts 2) Explanatory Notes on receipts & payment accounts 3) Glossary of terms for receipts & payment accounts 4) Example SORP compliant accrual accounts 5) Explanatory notes on SORP compliant accrual accounts 6) Glossary of terms for SORP compliant accrual accounts 7) Guidance on accounting for Church property � Additional guidance will be available in due course to include: 35 1) Trustees Report 2) Parish budgeting

RCB & local supports (continued) � Treasurers networks – Diocese are encouraged to support the formation of local treasurer networks to share learnings � Select Vestries are encouraged to seek out local resources & experts in Parish to support with email, new format of accounts, charities reporting, etc. � RCB will facilitate Diocesan meetings of Parish treasurers meetings in 2018 & 2019 � SV encouraged to set up a Parish email address for communicating with the regulators office & the RCB (htdunshaughlin@gmail. com) 36 � Asking Parishes to prepare now and commence the transition to the example receipts & payment accounts

Accounting for your Parish as a registered charity � Trustees are responsible for keeping proper books of account � The parish trustees are the members of the Select Vestry of the Parish, Group or Union � The trustees must keep either receipts & payment accounts or accrual accounts 37

Receipts & Payments and Accrual Accounts Receipts and Payments Accounts Simpler form of accounts based on summary of money received and paid both through the bank and cash accounts for the financial period/year. Best practice is to include a statement of assets & liabilities and notes to the financial statements. The majority of Parishes will fall into receipts & payment accounts Accrued Accounts Here the income or expense of a particular activity is accounted for when the liability is incurred or when there is an entitlement to certain income. 38 Examples of accrual accounts A local business donates € 1, 000 to the Parish at 29 st December, the funds have not reached the Parish bank account but the treasurer is aware the funds have been transferred from the business. This income under the accrual method would be included in the year end 31 st December accounts and shown as a donation of € 1, 000 with a corresponding entry in debtors for monies due (credit income and debit debtors in current financial year).

Restricted and Unrestricted Funds Restricted Funds received for a specific appeal and which can only be used for that specific purpose – Church roof repair fund Unrestricted Funds Income arising which can be used for general Parish purposes Endowment Funds donated or bequest made which can be either restricted or unrestricted and either permanent or expendable. 39

Parish Bank Accounts Parishes historically have produced accounts for each bank account held on a receipts and payments basis. Ø Going forward need to bring all accounts into one set of Parish accounts. Ø Need for Parish organisations to produce accounts for the same accounting period (i. e. all tie in with the same year end date). Ø Include activities which are part of the parish e. g. choir, active retirement group, flower club. Ø Organisation with national head-quarters should not be included in your Parish accounts e. g. Boys Brigade, Girls Friendly Society, Girls Brigade, Mothers Union, these 40 organisations will produce separate accounts.

Statement of Assets & Liabilities and Balance Sheet Most Parishes won’t have produced a statement of assets & liabilities or a Balance Sheet � What should be included: 1. Fixed Assets – The RCB has produced guidance for Parishes on how to value church property (Church, Grave yard, Parish hall, Rectory & any land) 2. Investment – held by RB General unit trust or other investments 3. Cash – held by the RB 4. Bank – all bank accounts 5. Debtors – amounts due to be collected which have not been received but are included in the accounts– e. g. the € 1, 000 from the business 6. Creditors e. g. suppliers or money owed which has not been paid but due 7. Bank Loans – any loan from banks or other financial institutes The Statement of Assets & Liabilities is less onerous 41 Full Balance Sheet is only applicable to SORP compliant accrual accounts

Future reporting for Parishes �From 2019 onwards it is expected that Parishes will file annual report with CRA which will include �Receipts and Payment accounts �Trustees report Parishes are encouraged to prepare now and move to example receipts & payment accounts for the year beginning 2018 42

Hopefully this will be child's play Thank you & any questions 43