Charity Commission to get tough on charities that don’t file accounts on time
Sam Younger, the commission's chief executive, says some trustees are too relaxed about their legal duty to get their financial documents to the regulator
The Charity Commission will be tougher on charities that fail to file accounts on time, according to Sam Younger, its chief executive.
In a commentary published this morning on the regulator's website, Younger says research carried out by the commission among charities that filed their accounts late "bolstered the case for introducing penalties for charities that are late in filing their accounts with us".
Younger will tell the commission's annual public meeting in London today that some trustees are "too relaxed about their legal duties" when it comes to filing annual returns and that the regulator needs to "toughen up its message" on late filing.
Figures gathered from 400 late-filing charity accounts from 2011, released today by the commission, show that more than a third were signed off before their filing date, but had not been passed to the regulator on time.
The commission also found that, out of the 400, nearly a quarter of charities with incomes of more than £250,000 filed late accounts in each of the previous five financial years.
In his article on the commission's website, Younger says the findings, which include figures showing that almost four out of 10 late-filing charities were able to file their accounts with Companies House on time, "tell of a curious lack of urgency towards meeting the requirements of charity law and complying with the principle of accountability".
He says any penalty regime, such as Lord Hodgson's suggestion in his review of the Charities Act 2006 that late-filing charities should be unable to collect Gift Aid, would take time to implement and require legislative change.
"But charities should take note that the 'benefit of doubt' balance is shifting," says Younger. "In the past, we were more cautious about discussions around penalties, as any fine a charity pays detracts from the sum it can put towards furthering its charitable aim.
"Perhaps, in the past, there might have been a nervousness about kicking a charity while it was down – assuming that late filing was linked to financial problems in a charity. But these new findings do not suggest late filers face greater financial hardship than the sector generally."
The research shows that religious and faith charities with incomes of more than £250,000 make up 28 per cent of all late filers, and that more than half of all registered charities leave filing their online annual returns until a month before their deadline
Among those that file their accounts late, only 8 per cent of smaller charities and 12 per cent of larger charities provide all the required information.
Today's meeting will include a panel debate on charities and public trust with Steve Egan, deputy chief executive of the Higher Education Funding Council, Caroline Harper, chief executive of Sightsavers, Joe Saxton, co-founder of the charity consultancy nfpSynergy and Dan Corry, chief executive of New Philanthropy Capital.
Corry will say that the commission should encourage charities to be more transparent and clearer about their impact if they are to maintain public trust.
He will say that impact reporting principles should not be considered as a fringe activity but charities should be routinely demonstrating their effectiveness.
This article was taken from www.thirdsector.co.uk – http://www.thirdsector.co.uk/news/1151940