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Commission concerned about ‘basic errors in annual reporting’ by charities

The Charity Commission has said it will step up efforts to make charities aware of their reporting duties after it found that 43 per cent of charities with unusually low expenditures had either made a mistake in their annual report or underreported their expenditure.

As part of a its accounts monitoring work the Commission identified 443 charities where the charitable expenditure was less than 10 per cent.

It scrutinised the accounts of 188 charities and found that in the majority of cases, 57 per cent, there was a reasonable explanation, such as the receipt of ‘one-off’ income like a large legacy, accumulation of reserves for specific purpose, purchase of assets, and the inclusion of trading subsidiaries in the accounts.

The other 43 per cent had made reporting errors. In no case did the Commission find that low expenditure was down to misconduct.

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