CC15 - A chance to comment - Appendices

SORP Para.

1. Reference and administrative details of the charity, its trustees and advisers:-

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a) The charity’s name, which in the case of a registered charity means the name under which it is registered. Any other name which a charity uses should also be given.

b) The charity registration number, and if applicable, the company registration number

c) The address of the principal office of the charity, and in the case of a charitable company, the address of its registered office

d) The names of all those who were the charity’s trustees or custodian trustees on the date the report was approved. Where there are more than 50 trustees, the names of at least 50 of the trustees (including all the officers of the charity, eg chair, treasurer etc). Where the trustee is a body corporate, the names of any person who is a director of the body corporate are given.

e) The name of any other person who served as a charity trustee or custodian trustee in the financial year in question.

Where the disclosure of the names of any charity trustees, custodian trustees, senior staff member, or persons with power of appointment, or of the charity’s principal address could lead to that person being placed in personal danger (for example in the case of a women’s refuge), the charity trustees may dispense with the disclosure provided that the Charity Commission has given them authority to do so.

42

2. Structure, Governance and Management:-

44

The Trustees’ Annual Report should provide the reader with an understanding of how the charity is constituted, its organisational structure and how its trustees are appointed and trained and assist the reader to understand how the charity’s decision making processes work. The level of detail provided may well depend on the size and complexity of the charity and be proportionate to the needs of the report’s readers.

a)   Particulars, including the date if known, and the nature of the governing document (eg trust deed, Memorandum and Articles of Association etc) and how the charity is (or its trustees are) constituted (eg limited company, unincorporated association etc);

b)   The methods adopted for the recruitment and appointment of new trustees, including details of any constitutional provisions relating to appointments, for example, election to post. Where any other person or body external to the charity is entitled to appoint one or more of the trustees this should be explained together with the name of that person or body (subject to section 1 above if permission not to disclose has been obtained).

3. A Financial Review containing:-

55 & 56

a)  Policy on reserves stating the level of reserves held and why they are held. Where material funds have been designated, the reserves policy statement should quantify and explain the purposes of these designations, and where set aside for future expenditure, the likely timing of the expenditure. Where no reserves policy is in place, a statement should be made to that effect.

b)  Where any fund is materially in deficit, the circumstances giving rise to the deficit and details of the steps being taken to eliminate the deficit.

4. Funds Held as Custodian Trustee on Behalf of Others

59

Where a charity is or its trustees are, acting as custodian trustees, the following matters should be disclosed in the report:

a)   A description of the assets which they hold in this capacity;

b)   The name and objects of the charity (or charities) on whose behalf the assets are held and how this activity falls within their own objects;

c)   Details of the arrangements for safe custody and segregation of such assets from the charity’s own assets.

B. MATTERS THAT SMALLER CHARITIES, NOT SUBJECT TO STATUTORY AUDIT MUST ALSO REPORT

1. Objectives and Activities

47 & 52

Charities that are not subject to a statutory audit requirement may limit their disclosures within this section to a summary of the charity’s objects as set out in its governing document and to providing a brief summary of the main activities undertaken in relation to those objects.

2. Achievements and Performance

53 & 54

Charities that are not subject to a statutory audit requirement may limit their disclosures within this section to a brief summary of the achievements of the charity during the year in relation to its objects.

C. MATTERS THAT CHARITIES SUBJECT TO STATUTORY AUDIT MUST ALSO REPORT

1. The report should provide the following additional reference and administrative information about the charity, its trustees and advisers:-

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a) The name of any chief executive Officer or other senior staff members to whom day to day management of the charity is delegated by the trustees.

b) The names and addresses of any other relevant organisations or persons. This should include the names and addresses of those acting as bankers, solicitors, auditor (or independent examiner or reporting accountant) and investment or other principal advisers.

2. The report should provide the following additional information about the structure, governance and management of the charity:-

44

a) The policies and procedures adopted for the induction and training of trustees and, where no such policies have been adopted, a statement to that effect.

b) The organisational structure of the charity and how decisions are made. For example, which types of decision are taken by the trustees and which are delegated to staff.

c) Where the charity is part of a wider network (eg charities affiliated within an umbrella group), then any impact this has on the charity’s operating policies should be explained.

d) The relationships between the charity and related parties, including its subsidiaries, and with any other charities and organisations with which it co-operates in pursuit of its charitable objectives.

e) A statement confirming that the major risks to which the charity is exposed, as identified by the trustees, have been reviewed, and systems or procedures have been established to manage those risks.

3. Objectives and activities

47

The Trustees’ Annual Report should help the reader understand the aims and objectives set by the charity, and the strategies and activities undertaken to achieve them. The report may also, where relevant, explain how the objectives set for the year relate to longer term strategies and objectives set by the charity. Where significant activities take place through subsidiary undertakings, these should be explained in the report. In particular, the report should provide:

a) A summary of the objects of the charity as set out in its governing document.

b) An explanation of the charity’s aims including the changes or differences it seeks to make through its activities.

c) An explanation of the charity’s main objectives for the year.

d) An explanation of the charity’s strategies for achieving the stated objectives.

e) Details of significant activities (including its main programmes, projects or services provided) that contribute to the achievement of the stated objectives).  The details provided should focus on the activities that the trustees consider significant in terms of the charity as a whole.  The Trustees’ Annual Report should, as a minimum, explain the objectives, activities, projects or services identified within the analysis note accompanying the charitable activities set out in the Statement of Financial Activities (SOFA).

Where the charity conducts a significant amount of its activities through grantmaking, a statement should be provided setting out its grantmaking policies.Where social or programme related investment activities are material in the context of the charitable activities undertaken, the investment policies should be explained

49

Where social or programme related investment activities are material in the context of the charitable activities undertaken, the investment policies should be explained.Where a charity uses volunteers to a significant extent in its charitable or income generating activities, this should be noted.  Unpaid voluntary contributions are not included in the SOFA, because of the difficulties in attributing a monetary value to them, but it important that readers of the report are able to understand the role and contribution of volunteers. The information may therefore explain the activities with which volunteers help, quantify their contribution in terms of hours or paid staff equivalents, and may present an indicative value of their contribution.

50

Where a charity uses volunteers to a significant extent in its charitable or income generating activities, this should be noted.  Unpaid voluntary contributions are not included in the SOFA, because of the difficulties in attributing a monetary value to them, but it important that readers of the report are able to understand the role and contribution of volunteers. The information may therefore explain the activities with which volunteers help, quantify their contribution in terms of hours or paid staff equivalents, and may present an indicative value of their contribution.

51

4. Achievements and Performance

53

The report should contain information that enables the reader to understand and assess the achievements of the charity and its subsidiary undertakings during the year. It should review its performance against objectives that have been set. It is likely to contain both quantitative and qualitative performance to explain achievement and performance, and it would be helpful to identify any indicators, milestones and benchmarks against which the charity assesses the achievement of its objectives. In particular, the report should contain:

(a)     A review of charitable activities undertaken, that explains the performance achieved against the objectives set.  Where qualitative or quantitative information is used to assess the outcome of activities, a summary of the measures or indicators used to assess achievement should be included.

(b)    Where significant fundraising activities are undertaken, details of the performance achieved against fundraising objectives set, commenting on any material expenditure which might enhance future income generation, and explaining the effect on the current period’s fundraising return.

(c)    Where significant investments are held, details of the investment performance achieved against the investment objectives set.

(d)    Commentary on factors within and outside the charity’s control which are relevant to the achievement of its objectives; these might include relationship with employees, users, beneficiaries , funders and the charity’s position in the wider community.

5. Financial Review

55

The Trustees’ Annual Report should provide the following additional financial review information about the charity, including a review of the financial position of the charity and its subsidiaries, and a statement of the principal financial management policies in force during the year:-

(a)    Principal funding sources and how expenditure in the year under review has supported the key objectives of the charity.

(b)    Where material investments are held, the investment policy and objectives, including the extent to which social, ethical or environmental considerations are taken into account.

6. Plans for Future Periods

57

The report should explain the charity’s plans for the future including the aims and key objectives it has set for future periods together with details of any activities planned to achieve them.

Requirement

 11(3)

The financial year to which the report relates.

 11(3)(a)

 A brief summary of the main activities and achievements of the charity during the year in relation to the charity’s objects.

 11(4)(a)

 The name of the charity as it appears in the Register of Charities and any other name by which it makes itself known.
Note: Excepted charities which are not registered should provide the name as set out in their governing document and any other name by which they are known.

 11(4)(b)

The number assigned to it in the Register, and, in the case of a charitable company, the number with which it is registered as a company.
Note: Excepted charities which are not registered do not have a charity registration number.

 11(4)(c)
 11(5)

The principal address of the charity and, in the case of a charitable company, the address of its registered office.
Note: The Charity Commissioners may dispense with the requirement to disclose the address of the charity if it could lead to any person being placed in any personal danger.

 11(4)(h)

Particulars, including the date if known, of any deed or other document containing provisions which regulate the purposes and administration of the charity.

 11(4)(l)

A summary of the objects of the charity.

 11(4)(i)

SORP 44(b)

The name of any person or body of persons entitled by the trusts of the charity to appoint one or more new charity trustees, and a description of the method provided by those trusts for such appointment.
The methods adopted for the recruitment and appointment of new trustees, including details of any constitutional provisions relating to appointments, for example, election to post. Where any other person or body external is entitled to appoint one or more of the charity trustees this should be explained together with the name of that person.
Note: The Charity Commissioners may dispense with the requirement to disclose the address of the charity if it could lead to any person being placed in any personal danger.

 11(4)(d)

 The name of any person who is a charity trustee of the charity on the date when the report is signed, and, where any trustee on the date is a body corporate, the name of any person who is a director of the body corporate on that date.

 11(4)(e)

 The name of any other person who has, at any time during the financial year in question, been a charity trustee of the charity.

 11(4)(f)

 The name of any person who is a trustee for the charity (ie those holding property on behalf of the charity) on the date the report is signed.

 11(4)(g)

 The name of any other person who has, at any time, during the financial year in question, been a trustee for the charity (that is, holding property on behalf of the charity).

11(4)(p)

11(3)(c)(i)

 A description of the policies (if any) which have been adopted by the charity trustees:-
(i) for the purpose of determining the level of reserves which it is appropriate for the charity to maintain in order to meet effectively the needs designated by its trusts; and
(ii) details of the amount and purpose of any material commitments and planned expenditure not provided for in the balance sheet which have been deducted from the assets in the unrestricted fund of the charity in calculating the amount of the reserves, and where no such policies have been adopted, a statement to this effect; and
(iii) where any fund is materially in deficit at the beginning of the financial year in question, and particular of the steps taken by the charity trustees to eliminate the deficit.

 11(4)(r)

 A description of any assets held by the charity or by any charity trustee of, or trustee for, the charity, on behalf of another charity, and particulars of any special arrangements made with respect to the safe custody of such assets and their segregation from assets of the charity not so held and a description of the objects of the charity on whose behalf the assets are held.

 11(5)

 Note: The Charity Commissioners may dispense with the requirement to disclose the names of charity trustee(s) if it could lead to that person/(those people) being placed in any personal danger.

 11(6)

If the charity has more than 50 trustees, then the names of not less than 50 trustees must be disclosed.

11(3)(c)(ii)

 The report shall be dated and be signed by one or more of the charity trustees, each of whom has been authorised to do so.

 Regulation

 Requirement

 11(3)(b)(i)

SORP 48

SORP 53
SORP 53(a)
SORP 55(c)

SORP 55

11 (3)(b)

Instead of a brief summary of achievements of activities there should be:
A review of significant activities, including:

• Details of the aims and objectives which the charity trustees have set for the charity in the year, and details of the strategies adopted, and of significant activities undertaken, in order to achieve those aims and objectives;
• Details of the achievements of the charity during the year, measured by reference to the aims and objectives which have been set;
• Details of significant activities that contribute to the achievement of the stated objectives;
• Details of any significant contributions of volunteers to these activities;
• Details of the principal funding sources of the charity;
• The details of significant activities provided should focus on those activities that the charity trustees consider to be significant in the circumstances of the charity as a whole, and, as a minimum, explain the objectives, activities and projects or services identified within the analysis note accompanying the section on charitable activities in the Statement of Financial Activities;
• The achievements of it subsidiary undertakings in the year;
• Where qualitative or quantitative information is used to assess the outcome of the charitable activities, a summary of the measures or indicators used to assess achievement should be included; and
• How expenditure in the year under review has supported the key objectives of the charity.
• The financial review should contain a review of the financial position of the charity and its subsidiaries and a statement of the principal financial management policies adopted in the year.
• Details of any significant contribution of volunteers to these activities.

SORP 44(e)

 Where the charity is part of a wider network, then the relationship involved should be explained where this impacts on the operating policies adopted by the charity.

 SORP 44(f)

 The relationship between the charity and related parties, including its subsidiaries and with any other charities and organisations with which it co-operates in the pursuit of its charitable objectives.

 SORP 50

 Where social or programme related investment activities are material in the context of charitable activities undertaken, the policies adopted in making such investments should be explained.

 11(3)(b)(ii)

 A statement as to whether the charity trustees have given consideration to:

• The major risks to which the charity is exposed; and
• Systems or procedures designed to manage those risks.

 11(4)(j)

 A description of the policies and procedures (if any) which have been adopted by the charity trustees for the induction and training of charity trustees, and where no such policies have been adopted, a statement to that effect.

 11(4)(k)

 A description of the organisational structure of the charity.

 SORP 41(f)

 The name of any Chief Executive Officer or other senior staff member(s) to whom day to day management of the charity is delegated by the charity trustees.

 SORP 41(g)

 The names and addresses of any other relevant organisations or persons. This should include the names and addresses of those acting as bankers, solicitors, auditor (or independent examiner or reporting accountant) and investment or other principal advisers.

 11(4)(m)

 A description of the policies (if any) which have been adopted by the charity trustees for the selection of individuals and institutions who are to receive grants, or other forms of financial support, out of the assets of the charity.

 SORP 53(b)

 Where fundraising activities are undertaken, details of performance achieved against fundraising objectives set, commenting on any material expenditure for future income generation and explaining the effect on the current period’s fundraising return and anticipated income generation in future periods.

 SORP 53(d)

 Comment on those factors within and outside the charity’s control which are relevant to the achievement of its objectives.

 11(4)(n)

 A statement regarding the performance during the financial year of the investments belonging to the charity (if any).

 11(4)(o)

 Where material investments are held by a charity, a description of the policies (if any) which have been adopted by the charity trustees for the selection, retention and realisation of investments for the charity, including the extent (if any) to which social, environmental or ethical considerations are taken into account.

 11(4)(q)

 A description of the aims and objectives which the charity trustees have set for the charity in the future and of the activities contemplated in furtherance of those aims and objectives.

A suggested timetable and checklist:

2 months before year end

• Plan ahead to identify and resolve bottlenecks (key individuals on holiday etc)
• Ensure independent examiner or auditor is appointed, fee (if any) agreed, timetable for trustee scrutiny agreed
• Reconcile as many accounting periods as you can e.g. up to and including month 10

1 month to year end

• Ensure Trustees’ Annual Report (TAR) coordinator appointed
• Tell any internal branches/sections of the need for summaries of their work and give a deadline
• Ensure any known queries are dealt with (e.g. unknown receipts or payments)
• Ensure a trustee meeting or AGM, where appropriate, is arranged at a convenient time to sign off accounts

In the month following year end

• Reconcile bank accounts
• Photocopy latest bank statements (so originals can go with books to accountant/auditor/independent examiner)
• Get deposit accounts updated for interest received.
• Close off cash books (and ledgers if used)
• Reconcile ledgers (if any) and prepare trial balance
• Cross cast analysed cash book and agree total
• Check analysis for consistency (e.g. all similar payments and receipts in same place)
• Check all purchase vouchers are present and try to obtain missing ones
• Prepare summaries from computer accounting packages

1 month after year end

• Complete narrative for draft TAR
• List any invoices paid after the year end relating to the previous month   (needed if preparing accruals accounts).
• Prepare draft accounts
• Pass documents to independent examiner or auditor
• Arrange sign off dates with independent examiner or auditor
• Consider post year-end events

2 months after year end

• Meet with independent examiner or auditor to deal with any questions
• Arrange for final accounts and report to be presented to trustees for approval
• Trustees and auditors to sign accounts
• File TAR and accounts with the Charity Commission, and if the charity is a company registered under company law, file the Directors’ Report and accounts with Companies House.
• Arrange for final accounts to be printed (and sent to members if there is an AGM)

2 months after filing

• Check Commission website to ensure that details are displayed satisfactorily and completely