Partnership SW Exeter Cluster 8 May 2017 Trustees’ break-out group

Agenda Questions which group hope will be covered Safeguarding for churches – Jonathan Breeze Reporting to church and Charity Commission Public benefit

Reporting by trustees What is your reporting practice (to the fellowship)? Frequency? – Annual?, semi-annual?, regular?, occasional? By church leaders? By trustees? Detail, e.g., on finances? Written report on activities? Reporting to the Charity Commission Annual Return, by 10 months after end of financial year (requires trustees’ approval, even when done by financial adviser) – red-lining penalty Annual Report and Accounts (SOFA – conforming to charities SORP) – required of all charities (and must be publicly available), but only to be deposited with Charity Commission if income of £25,000+; must include report on how charity has achieved public benefit

CC annual report requirements CC wants to see better annual reporting by small charities Purpose of annual report and accounts: to ‘tell the reader what the charity is set up to do, what it achieved and how it spent its money’ CC criteria: do the trustees prepare both an annual report and accounts? does the annual report explain what activities the charity had carried out during the year to achieve its purposes [including public benefit]? do the accounts contain both an analysis of receipts and payments and a statement of assets and liabilities (consistent)

CC Accounts Monitoring Review < £25,000 income: Some provided later reports and accounts, or ones that were prepared because they were asked! 55% were of acceptable quality Reasons for failure: 10%: nothing provided 17%: only either report or accounts provided 22%: key information missing >£25,000 income (must include report of independent scrutineer): 75% of acceptable quality (slight fall from previous years) Accounts inconsistent or not transparent Accounts did not balance or were not complete No proper independent scrutiny Annual report did not cover charity’s objectives and/or report on activities (activities report needs to explain how objectives (including public benefit) are achieved) At least one required component missing

Annual report CC: ‘an important opportunity for the trustees to take stock of what the charity has achieved over the last year and to demonstrate to the charity’s supporters, potential funders and the public that they have managed its resources effectively and are meeting its objectives.’ For churches, this includes how, and how effectively, they have advanced Christianity (trustees must work with leadership on this).

Public benefit reporting Must state whether or not the trustees have had ‘due regard to’ CC’s public benefit guidance (and how!) (both general and that on advancing religion) in making decisions – means that they have at least to have read it! (See CC guidance Public Benefit Reporting (PB3)) More than half of CC’s sample of £25,000+ charities failed to report satisfactorily on public benefit (?examiners failed?): ‘many did not go on to consider what difference they had made to their beneficiaries and/or include the required statement that the trustees had considered our guidance on public benefit reporting.’ So what about the less than £25,000 income group? CC guidance includes a pro-forma report, suggesting a structure for an annual report, including on public benefit Don’t rely on examiner to get this right!

Further reading CC Annual Monitoring Reports: Annual report and accounts: Less than £25,000 annual income: £25,000+ annual income: Public benefit reporting: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/609953/AMR_Telling_your_story_well_public_benefit_r eporting_by_charities.pdf The essential trustee – CC3 Three guidance papers on public benefit reporting (PB1, 2 & 3), particularly https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/588307/PB3_Reporting.pdf Guidance on preparing trustees’ annual report: https://www.gov.uk/guidance/prepare-a-charity-trustees-annual-report CC annual report template for annual report of small charity: https://www.gov.uk/government/publications/trustees- annual-report-template