Charity law requires those charities with a gross income of more than £25,000 to have some form of external scrutiny of their accounts.
The role of the independent examiner is to provide an independent scrutiny of the accounts. The examiner plays a part in maintaining public trust and confidence in charities
This limited form of check (sometimes referred to as ‘negative assurance’) contrasts with an audit. The examiner is only required to confirm whether any material matters of concern have come to their attention, whilst an auditor is required to provide an opinion on whether a charity’s accounts give a ‘true and fair view’.
An auditor builds up a body of evidence to support a positive statement as to whether the accounts give a ‘true and fair view’. An audit is carried out in accordance with international auditing standards and the audit guidance issued by the Financial Reporting Council.
An Independent Examination is therefore a limited form of scrutiny compared to an audit. It provides less assurance in terms of the depth of work which is to be carried out and is limited as to the matters on which the examiner reports.
An Independent Examination involves a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also involves a review of the accounts and the consideration of any unusual items and/or disclosures provided. The examiner must also consider whether any matters of concern have come to the examiner’s attention as a result of the independent examination that should be included in their report to enable a proper understanding of the accounts to be reached.
The trustees may opt for an independent examination provided an audit is not required by charity law. The charity must have an audit for financial years ending on or after 31 March 2015 if either its gross income exceeds £1m or, its gross income exceeds £250,000 and the aggregate value of assets (before deduction of liabilities) exceeds £3.26 million.
Unrestricted general funds can be spent at the discretion of the trustees to further any charitable purpose of the charity. This means that these funds can be spent in their own right, or can be added to a restricted fund which does not have enough money to cover its expenditure
Designated funds are still unrestricted, but have been set aside by the trustees for a particular future project or commitment. The designation is for administrative purposes only and carries no legal authority
Restricted funds are completely different. Restricted funds refer to funds held under ‘specific trusts’, which is that they are held for a specific charitable purpose. The restriction carries the weight of the law and so restricted funds can only be lawfully spent on the specific charitable purpose for which they were provided. As with designated funds, there is no requirement for restricted funds to be held in a separate bank account
Are you a Trustee? Are you in the know about the financial and legal responsibilities which accompany your role?
Our next Training Course can put you in the picture
Nick Meakin will join us on
Wednesday 4th February 2015
from 9:45am to 12:30pm
at the Bosnia & Herzegovina Centre, Derby DE1 1LN
to explain your responsibilities and highlight how you can minimise any personal financial risks
Many thanks to all those who attended the ‘Trustees and Charity Law’ course led by Nick Meakin. We cannot emphasise enough the need for Trustees to fully understand their roles and responsibilities.
For those who missed this course, it will be repeated in January 2015. Look out for further details
Have you ever had concerns about how being a Trustee can affect your personal finances? Would you know what to do if your Charity organisation got into serious difficulties?
Nick Meakin, formerly of Derby CVS, is our local expert on Charity Law, and he will be running a course for us on
Wednesday 24th September 2014 09:45am to 12:30pm
at the Derby Bosnian Centre where there is FREE PARKING
We still have a few places available for this course, so don’t delay in booking your place.
Just give the office a ring on 01332 364784 or send an email here
Our training courses in September are fast filling up, so don’t forget to book your place here
Tuesday 16th September 10am – 12 Noon
Pensions Auto Enrolment with Darren Wheatcroft
———————————————————————————————————- Wednesday 24th September 9:45am – 12:30pm
Charity Law and how it effects your group
Both of these courses will be at the Derby Bosnia & Herzegovena Centre DE1 1LN where there is FREE PARKING available.