The Charity Commission has warned charity trustees that submitting accounts is a legal obligation with the announcement that it has expanded its inquiry into charities that are failing to do so.
With filing accounts late not only a criminal offence but also off-putting to donors and funders, the regulator has named a further 14 charities as part of its class inquiry into charities who fail to file accounts properly in two consecutive years, so-called ‘double defaulters’, and has announced the next phase of the inquiry.
It first launched the inquiry in September 2013, concentrating on non-compliant charities with a last known income of over £500,000. A second phase of the inquiry was launched in November 2013, extending it to those charities with a last known income of £250,000. Due to the number of charities involved, the Commission staggered this phase, adding 21 charities to the inquiry between November 2013 and May 2014, and a further 29 charities to the inquiry between May and November 2014.
In January 2015 the Commission extended its focus with a new phase of the inquiry, focusing on non-compliant charities with a last known income of £200,000 to £249,999. Under this phase 12 charities were added to the inquiry between 26 January and 29 January 2015.
The inquiry has now commenced two new phases, looking again at those charities with a last known income of over £250,000, and at those with a last known income of £200,000 to £249,999. The inquiry is to consider looking at those charities with a last known income of less than £200,000 early this year.
88 charities had become part of the inquiry by the end of last year, 73 of which have now fully complied with their obligations, and are no longer part of the inquiry. This has resulted in more than £68 million of funds being accounted for on the Register of Charities, and outstanding accounting information being provided.
Carl Mehta, head of investigations and enforcement operations at the Charity Commission, said:
“The message to trustees is simple: submitting this annual information is your legal responsibility, even if you delegate it to charity staff or your accountants to do. Charities are sent multiple reminders about their approaching deadlines, and with default notices.
There is now an online tool which allows third parties to submit accounts, making the process easier for those involved – so there is no excuse for non-compliance. We will continue to crack down on defaulters, showing that we will not tolerate charities that demonstrate contempt for the public and their donors by failing to meet reporting requirements.”