# Quarter of charity annual reports & accounts fall short of regulator benchmark

- Link: https://fundraising.co.uk/2018/09/06/quarter-charity-annual-reports-accounts-fall-short-regulator-benchmark/
- Published: 2018-09-06T07:59:14+01:00
- Author: Melanie May

**A quarter of charity trustees’ annual reports and accounts fail to meet the Charity
Commission’s basic benchmark, the regulator has revealed, following its latest monitoring
reviews.**

 

The [Commission](https://www.gov.uk/government/organisations/charity-commission)
studied a random sample of 106 charity trustees’ annual reports and accounts filed
with it to assess how charities are meeting the public benefit reporting standards,
and whether the accounts meet readers’ needs. It also inspected a separate sample
of small charities.

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Despite a modest improvement in the quality of public reporting, it found that for
the sample of charities with incomes over £25,000, 74% of the trustees’ annual reports
and accounts reviewed were of acceptable quality, meeting its basic benchmark standard.
The most common reason for inadequate reporting was that the trustees’ annual report
did not explain the charitable activities the charity had carried out to help its
beneficiaries.

 

Reasons for inadequate reporting:

 

 * The annual report was inadequate, mainly because it provided little or no information
   on the charitable activities carried out (11% of charities)
 * One of the required documents was missing (5% of charities)
 * The independent scrutiny report was inadequate, mainly because the wording of
   the report demonstrated that the person carrying out the scrutiny was not familiar
   with the independent examination requirements (5% of charities)
 * The accounts were inadequate, mainly because they were incomplete or did not 
   balance (5% of charities)

 

For the small charities, the Commission found that 64% met the regulator’s basic
benchmark. The main reason for inadequate reporting here was that the charity failed
to provide one or both of the trustees’ annual report and the accounts.

 

The Commission has provided regulatory guidance to 89 charities included in the 
reviews  to help improve the quality of future trustees’ annual reports and accounts.

 

Nigel Davies, Head of Accountancy Services at the Charity Commission for England
and Wales said:

 

> “Our research into trust and confidence in charities shows that the public no 
> longer give charities the benefit of the doubt; they want evidence that charities
> make a difference when using their money. Public reporting is an opportunity for
> charities to tell their story and explain to the public what they do and how they
> use charitable funds.
> “Too many charities are still not meeting very basic standards when it comes to
> making key information available to the public. I am encouraged to see that an
> increasing number of trustees recognise the value of public benefit reporting,
> but there is clearly more work to be done across the sector.”

 

The full reports are available on [GOV.UK.](https://www.gov.uk/government/publications/accounts-monitoring-charities-annual-reports-and-accounts-meeting-the-readers-needs)

 * **[Almost 40% of small charities providing inaccurate financial information](https://fundraising.co.uk/2018/09/26/almost-40-small-charities-providing-inaccurate-financial-information/)**(
   26 September 2018)
 * **[Too many charities failing to show public benefit in reports, says Commission](https://fundraising.co.uk/2018/12/21/many-charities-failing-show-public-benefit-reports-says-commission/)**(
   21 December 2018)
 * **[Fundraising Regulator publishes guidance to help with Charities Act reporting requirements](https://fundraising.co.uk/2020/01/15/fundraising-regulator-publishes-guidance-to-help-with-charities-act-reporting-requirements/)**(
   15 January 2020)

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