voluntary organisations, social enterprises and volunteering
voluntary organisations, social enterprises and volunteering
voluntary organisations, social enterprises and volunteering
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OSCR - Four ways to improve your charity’s annual report and accounts
Created: 03/07/2024
News/Events Category: Governance
A recent blog post from OSCR has some great tips and tricks for improving your charity's financial reports and accounts.
All charities must prepare an annual report and accounts and submit them to OSCR on time. They recently reviewed the accounts of 60 charities, selected at random to represent the full scope of the Scottish charity sector, and they have found four key areas where charities can improve their annual reports and accounts.
The full findings of this research can be found in their new report: Lessons learned from reviewing charity accounts.
- Trustees' Annual Report - The Trustees’ Annual report is an opportunity for the charity to tell the story of its activities, achievements, and performance for the year and tie this in with the financial information. A good Trustees’ Annual Report can let the users of the accounts understand what activities the charity is undertaking and how it is meeting its objectives. This can encourage people to support the charity and provide funding. It also provides assurance to OSCR that the charity is operating appropriately.
- Comparative information - Some charities failed to include comparative information within the accounts. This means that it is not possible to compare the performance of the charity from one year to the next, or to understand variations. It also means that it is difficult to understand if opening balances are correct and carry forward appropriately from the previous year.
- Reserves policy - Charities need to better understand what a reserves policy is, how to develop a reserves policy and how to monitor against that policy. Charity trustees need to understand how proper management of the charity’s reserves is a key element of good governance.
- Governing documents - There is continuing evidence that in smaller charities, there is a lack of understanding of the requirements of the governing document. In OSCR's sample, several charities had audit requirements in the governing document which they were not adhering to. In addition, there were charities that did not have the required minimum number of trustees, compromising appropriate decision making and exposing the charity to potential criticism and reputational issues.
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