Financial management news and training
- Have you submitted your Group’s Annual Return or Update form?
- Internal Financial Controls for Charities (CC8) Update
- Checklist for Accounts’ Preparation / Independent Examination / Audit
- Accounting for Heritage Assets
- Is your community organisation's annual income above £5,000?
- Accountability Project launches new website
- Shaping the future of charity reporting
- Are you a Charitable Company?
- Are you a company limited by guarantee?
- Are you filing your accounts with the Companies House soon?
- Have you delivered your accounts and rejected by the Companies House?
If you answered ‘Yes’ to any of the above questions, you will find this article more useful.
We have recently being supporting groups whose accounts have been rejected by the Companies House. Companies House themselves have also stated that they are currently experiencing a high rejection rate for annual accounts. The majority of these rejections were observed to be due to simple errors or omissions. The impact on the company can be severe, including an automatic late filing penalty issued if the accounts are not returned before the filing deadline.
In order to avoid your accounts being rejected please consider the following information when preparing your accounts. Even better, you can submit audit exempt abbreviated accounts and dormant company accounts online using the Companies House web filing service. This is the safest and most secure way to file. Web filing contains inbuilt checks which eradicate most of the reject reasons listed below and also provides automatic email acknowledgements.
- Incorrect Statements to the Accounts – for accounting period prior to the 6 April 2008, the accounts must contain the appropriate Companies Act 1985 statements and for accounts with a period beginning on or after 6 April 2008, accounts must contain the relevant statement of the Companies Act 2006.
- Duplicate made up date – any amended/revised accounts must be marked `amending’ or `revised’ as appropriate otherwise any duplicate accounts will be rejected by the Companies House.
- Signatory name or signature missing from the Balance Sheet – the foot of the balance sheet must be sign by a director and Directors report must also state the name of the person who signed on behalf of the board.
- Companies Act 2006 Audit Exemption Statements absent or incorrect – as stated (in i above).
- Accounting reference date / made up date absent or incorrect – where the made up date does not match the accounting reference date. You can file form AA01 to change your accounting reference date together with your accounts before the last date for filing the accounts.
The above is intended to highlight the most common reason for rejection of accounts. Please also refer to the relevant guidance on the Companies House website: www.companieshouse.gov.uk.
You can also get further support in accounting and financial management, from Maroof, your local community accountant, on 020 8315 1919 or e-mail: email@example.com.
An update on SORP, run on Tuesday 29 March from 10am – 1pm at Community House, South Street, and Bromley will provide you with on the preparation of accruals accounts and applies to accounting years commencing on or after 1st April 2005.
Click here to download the booking form and registration information.
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All charities are reminded of their reporting requirements as their filing deadline approaches and that if you miss your deadline, you will receive a default notice. In addition to the notice, your register entry will also indicate that documents are overdue.
The Charity Commission usually sent series of reminders at intervals, explaining that if the overdue documents are not filed, the charity could face removal from the Register. At the end of a six-month notice period, if the Charity Commission has not received the overdue documents, the commission will either remove it from the Register for failing to supply evidence of its continued operation, or take further regulatory action.
In addition, all charities must prepare a Trustees’ Annual Report (TAR) and accounts, and make them available on request. Whether you must send them to the Commission depends on your charity’s income.
Further guidance can be obtained from the Charity Commission guidance on ‘Preparing your Annual Return’ and ‘What do trustees need to send to the Commission?’, from the Commission website: www.charitycommission.gov.uk.
For more information and support for your group’s accounting and financial management, please contact Maroof, your local community accountant on 020 8315 1919 or e-mail:firstname.lastname@example.org
The Charity Commission has updated their guidance on Internal Financial Controls for Charities (CC8) in June 2010; this new version replaces the previous version published in December 2003. It is a complete revision, in a different format and addresses new developments including electronic banking arrangements.
The guidance identifies Internal Financial Controls as an essential process, which helps charity trustees:
- meet their legal duties to safeguard the charity's assets;
- administer the charity's finances and assets in a way that identifies and manages risk; and
- ensure the quality of financial reporting, by keeping adequate accounting records and preparing timely and relevant financial information.
The guidance looks at various areas of financial activity and provides examples of internal financial controls that are used commonly to reduce the risk of loss.
It emphasises the importance of financial controls for charities of all sizes. Even small charities with relatively simple structures and low-risk activities need to protect their assets and get the most out of their resources. Not all controls will be relevant for all charities; it is for the trustees to decide which controls are appropriate to their charity. The controls put in place by trustees should be proportionate to the risks involved.
Charities working internationally face additional challenges in transferring funds and operating outside of the UK and should refer to the Charity Commission guidance on Charities Working Internationally.
For more information and support for your group’s accounting and financial management, please contact Maroof, your local community accountant on 020 8315 1919 or email:email@example.com to top
It’s that time of year again, especially for organisations with accounting year ending 31 March 2010. The earlier you plan ahead and getting books and records ready for your accountants, independent examiners or auditors the better it will be for you in terms of getting the accounts ready for filing on time and also reduce costs.
Please see below the checklist for accounts preparation, independent examination or audit work (some items will not apply to every organisation):
- Cash Book/Sheets or Register
- Petty Cash Book
- Bank Statements (covering the full year plus the first statement after the year end)
- Bank/Building Society Pass Books (updated)
- Computer Users - Nominal/General ledger printout ie. one that details all income and expenses by category eg rent and rates, telephone etc.
- Bank reconciliation at the year end date (if done)
- Valuation Statements for unquoted investments at year end date
- Share Dividend Certificates
- Details of any investments/ shares bought or sold
If you sell goods/services:
- Sales Day Book and Ledger (if applicable)
- Fee Invoices
- List of Fees owing to you (Debtors/Accounts Receivable
- Copy of contracts
- Remittance Advices
- Copy of Grant Agreements/or Applications
- Copy of Award Letters
- Remittances Advices (paperwork sent to you with the money)
- Copy of financial monitoring forms sent to funders
- Copy of correspondence re: agreements to vary grant expenditure
- Purchase Day Book and Ledger ( if applicable)
- Purchase Invoices
- Petty Cash Vouchers and Invoices
- Suppliers Statements
- List of suppliers you owe at the year end / Creditors / Accounts Payable
- Details of donations in kind
If you are VAT registered:
- Copies of VAT returns and working papers
If you employ staff:
- Wage records- computer printouts or P11 forms (do not need if CAS do your payroll)
- Yellow Sheet & Book for paying the Inland Revenue
- Copy of the Year End Form P35 (and P38A if applicable)
- List of current Management Committee Members
- Minutes of Management Meetings
- Copy of Constitution (if amended from previous year)
- Draft Annual Report (charities only)
- Copy of any lease/ rental/hire or loan agreement
- Corporation Tax Return (usually n/a for Registered Charities)
- Copies of Deed of Covenant/Gift Aid arrangements
- Details of any large pieces of equipment bought or sold eg. a computer
This list is not exhaustive and you may have additional information that would be helpful. Please ring Maroof on 020-8315 1919 or e-mail firstname.lastname@example.org.
List supplied courtesy of Community Accountancy Service Limited.
New accounting disclosures will apply to charities holding heritage assets for accounting periods beginning on or after 1st April 2010.
The new accounting standard ‘Financial Reporting Standard 30: Heritage Assets’ published by the Accounting Standards will require information about the nature and scale of heritage assets held and policies for their acquisition, preservation, management and disposal. Information about public access to heritage assets held is also required.
Where information is available on the cost or value of heritage assets this should be presented in the balance sheet separately from other tangible fixed assets.
Heritage assets are defined by the new standard as ‘those tangible assets with historical, artistic, scientific, technological, geophysical or environmental qualities that are held and maintained principally for their contribution to knowledge and culture’.
The SORP Committee has prepared an information sheet, which summarises the additional disclosures and information required by the new standard.
SORP Information Sheet 3 – Financial Reporting Standard 30: Heritage Assets (Version January 2010) provides further guidance.
This is a reminder from the Charity Commission. For more information and support for your group’s accounting and financial management, please contact Maroof, your local community accountant on 020 8315 1919 or e-mail:email@example.com to top
If the answer is yes and you are a `body or trust which is for a charitable purpose that provides benefit to the public’ as defined by the Charities Act 2006, you must register your organisation with the Charity Commission, unless you are excepted or exempt charity.
Generally, only voluntary, community groups or charities with an annual income above £5,000 must register with the Commission. This threshold has gone up from its previous level of £1,000. The increase to the registration threshold means that most charities with an annual income of £5,000 or less do not have to register. There used to be a requirement that a charity must register (regardless of the level of its income) if it possessed a permanent endowment, or used or occupied land. That is now gone.
Please note the Commission does not usually register any charity that is below the threshold for compulsory registration. Eventually, under changes in the Act, these small charities will have a right to register voluntarily, but this right has not yet come into force. However, the Commission recognizes that some charities have a particular need to be registered, so in the interim will consider their requests on a case-by-case basis.
Existing registered charities with an annual income below the £5,000 threshold can ask to be removed from the register, but they will still remain charities and will have to abide by charity law.
For more detailed information on this article, Charity Commission website: www.charitycommission.gov.uk. You can also get further support in accounting and financial management, from Maroof, your local community accountant, on 020 8315 1919 or e-mail: firstname.lastname@example.org to top
AccountAbility factsheets, templates, training and a complete Treasurer’s handbook are available online visit www.accountabilitylondon.org.uk.back to top
The model constitution is designed specifically for charities that expect to stay small, and have an annual income under £5,000. It is not meant for charities that own a building, employ people or intend to register with the Charity Commission. Read more at the Charity Commission website.