Charities registration and compliance Church of Ireland Charities registration and compliance

Welcome Seamus Murray Church of Ireland response Support for Hon Treasurers Accounts for Charities Q and A session

Mr Seamus Murray Head of Secretariat Charity Commission of Northern Ireland Presentations: Charities Legislation Public Benefit

Response of Church of Ireland New structures good for the charitable sector Will improve practices and image Sit well with existing structures and processes in C of I Should not be too great a burden Can be used to improve an already strong governance Will be adhered to – it is the law

Response of Church of Ireland How will the Church register? Diocesan decision – by diocese or parish Different responses in different dioceses Diocesan decisions will be provided with support from the RCB Interim register Parishes/entities registered with HMRC No action currently needed by them Will be written to by NI Charity Commission to confirm registration details

Response of Church of Ireland Expectations of parishes on Interim register Accounts for 2010, earliest Activity report for 2010, earliest Parishes/entities not registered with HMRC Parishes not registered as charities at present No need for action at present Registration process will commence after April 2010 Process will be phased

C of I governance - future C of I is divided into dioceses Parish incumbent responsible to the Bishop of the diocese Select Vestry responsible for looking after day to day income and expenditure, and the maintenance of the properties Most properties are not owned by the parish, but are vested in the RCB RCB established in 1870 as incorporated trust to hold property for C of I Not within power of parish or SV to dispose of vested property Not part of the accounting responsibility of the parish

Complying with Charities Legislation Model for parochial registration The charity will be based on the Select Vestry The membership of the SV, as constituted from time to time, will be the Charity Trustees The Charity will have as its main object the support of the charitable activities of the parish The SV Charity will seek to be incorporated, and thus will survive (annual) changes in the membership Facility to incorporate is built into new legislation The SV Charity will seek to avail of ‘designated religious status’ This will allow the Church to self manage the day to day ‘confirmation’ of appropriate people to serve The NICC still has the ultimate power to intervene in cases of bad governance

Trusteeship NICVA advice note 7 – Charity Trustee’s Duties ‘What is a charity trustee? …persons having ‘the general control and management of the administration of a charity’ are considered to be trustees…, whether they are aware of it or not…’ See NICVA website www.nicva.org

Status of SV members No fundamental change Remain responsible for the good governance of the income and expenditure of the parish Responsible to the Easter Vestry Responsible to the wider Church Responsible to the community Insurance for SV members already in many cases covers the members for implied trustee responsibilities

Support for SVs Model for parish registration Model for statement of SV Charity purpose Model for statement of public benefit Model for annual statement of activity Guidelines for the use of parochial treasurers Models for compliant parish accounts Specialised software to deliver compliance

Support for SVs Guidelines for the use of parochial treasurers Model for parish registration Model for statement of SV Charity purpose Model for statement of public benefit Model for annual statement of activity Guidelines for the use of parochial treasurers Models for compliant parish accounts Specialised software to deliver compliance

Honorary Treasurer Responsible to the SV to deliver Robust processes Clear and complete accounting records Accounts which reflect all relevant transactions Accounts which show how funds raised for specific purposes have been used appropriately – ‘fund accounting’

Robust processes Two signatories for all cheques All cash counted and signed for by more than one person Segregation of duties Clear and timely record keeping Elimination of cash payments Budgets for the incoming year Report on all financial transactions to SVs and Easter Vestries Etc

Changes from the past Parishes with properties vested in the RCB have to account for I and E and changes in cash and investment values, as now - but All funds under the care of the SV must be reported No longer an issue to do with church/diocesan funding – it would be illegal to omit funds Most parishes will have no problem with this Parishes which own properties directly will have to account for them in their balance sheet Trusts holding property separate from the SV will need to re-examine the validity of the relationship with the SV

What happens now 457 parishes and parish groupings Much higher number of Select Vestries Every SV is monitoring income and expenses Every SV is producing annual accounts Every set of accounts is individual to the parish Every set of accounts is individual to the Hon Treasurer

The strengths of the current system Strong form of parochial financial governance Annual Easter Vestry Annual elections Annual financial report Annual report is audited/certified Hundreds of Treasurers give their time and expertise The system works

Opportunity To develop the template for parochial reporting to be consistent with new reporting requirements To develop a C of I model to assist in parochial record keeping – manual or IT To develop an IT tool to assist in producing reports and returns

Process RCB has been looking at packs Has looked at Data Developments (Finance Coordinator) and GCD Technologies (Omega Church) Each of these has agreed to develop a C of I specific pack Hope to have both available by end of November

Support for SVs Models for compliant parish accounts Model for parish registration Model for statement of SV Charity purpose Model for statement of public benefit Model for annual statement of activity Guidelines for the use of parochial treasurers Models for compliant parish accounts Specialised software to deliver compliance

Accounts for Charities Charities law in NI specifies increasing accounting reporting requirements dependent on the income of the charity/parish Charities legislation will not have a major impact on way most parishes currently prepare accounts ‘Fund Accounting’ is good practice and also becoming a legal requirement Fund accounting would be sensible for all parishes

Fund Accounting Definition: ‘Method of accounting and presentation whereby assets and liabilities are grouped according to the purpose for which they are to be used’ Funds of parish can be grouped into 2 main headings: Unrestricted Funds Restricted Funds Unrestricted funds are available for spending on all the business of the parish Restricted funds are for a specific purpose, and must be used for that purpose – eg organ fund/ upkeep of graveyard etc The accounts must clearly distinguish between the receipt and expenditure of the two kinds of funds

Fund Accounting A parish will have to be able to assign each transaction to a ‘restricted’ or ‘unrestricted’ fund Most transactions will be in relation to unrestricted funds The accounts of the parish will have to show the income and expenditure per fund and balance per fund at the year end This is not unduly difficult, and in practice is how the funds will have been managed anyway

Sample Income & Expenditure Account Incoming Resources Total Investment Income 2,500 Envelopes 3,000 Collection for Black Santa 5,000 Total Income 10,500 Resources used Electricity 1,200 Diocesan Assessment 2,000 Transferred to Black Santa Total Expenditure 8,200 Net incoming resources 2,300

Sample Fund Accounts Incoming Resources Total Unrestricted Restricted Investment Income 2,500 1,500 1,000 Envelopes 3,000 Collection for Black Santa 5,000 Total Income 10,500 4,500 6,000 Resources used Electricity 1,200 Diocesan Assessment 2,000 Transferred to Black Santa Total Expenditure 8,200 3,200 Net incoming resources 2,300 1,300

Reports needed Parochial report to Easter Vestry As now, or could be adapted to match the report to the NICC Parochial report to Diocese As now Report to NICC Fund accounts

Reports planned for C of I software Parochial reports for Select Vestry Sundry reports which can be tailored to requirements of parish select vestries Wide range of reports Diocesan report Specific report per diocese Report for Charity Commission Standard C of I format – compliant with NICC Simple fund accounting based report

Report for Charity Commission Required by new charities legislation Fund accounting based Standard format for C of I parishes Summary of all income & expenditure for financial year Simple, familiar descriptions

Report for Charity Commission Both recommended accounting packs will incorporate the standard C of I report A manual version of C of I report will also be made available Report is simple, easy to understand format RCB will produce report submission guidelines

Questions to the panel

Church of Ireland – Public Benefit 1 draft The prime object of the Church of Ireland is the advancement of the Christian religion. Engagement with society as a whole and support for those needing help is fundamental to the practical delivery of the tenets of Christianity.

Church of Ireland – Public Benefit 2 draft The Church, through its members and the disposal of its physical assets, provides: A community building and enhancing focus, through the provision of facilities and support for social networks Active promotion of community harmony and responsible citizenship Support for the poor, the ill and the suffering Religious education, and active involvement in the provision of general education Support for the disadvantaged and for alienated members of society Support for development and the relief of poverty and disease in disadvantaged areas of the world The stewardship of buildings of general architectural and historical interest The promotion of the arts through music and other media

Church of Ireland – Public Benefit 3 draft The Church of Ireland is open to all. The support networks and activities of the Church reach out to a wide cross section of society, and the facilities provided by the Church are utilised by people from all backgrounds.

Thank you for coming Safe journey home