IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Everything you wanted to know about charity accounts but were afraid to ask. Chris Dennis Director Community Accounting Services Kernow Community Interest Company

IOF Cornwall Trustees & Senior Managers Conference – 16 th November,

3 Question 1 SORP stands for Statement of Required Practice TRUE or FALSE? Answer FALSE – Statement of Recommended Practice Format of the accounts for all charities. Accounts must be prepared according to SORP with exceptions Latest SORP in 2005 next in 2012 with not too many changes

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 2 SORP doesn’t apply if your income is less than £25,000 TRUE or FALSE? Answer FALSE – All charitable companies have to use SORP Unincorporated charities can use simpler receipts and payments accounts up to £250k income. Other things apart from the layout covered by Charities Act 2006 with changes up to i.e. whether audit is needed.

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 3 SOFA, a part of SORP, stands for Statement of Financial Activities. TRUE or FALSE? Answer TRUE Updated in SORP No management and administration anymore. All income and expenditure matched in the same categories.

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, INCOMING RESOURCESRESOURCES EXPENDED Incoming Resources from Generated FundsCost of generating funds Voluntary income Cost of generating voluntary income Activities for generating funds Fundraising trading, events, goods Investment income Investment management costs Incoming Resources from Charitable ActivitiesCharitable ActivitiesActivity AActivity BActivity C Governance Costs

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 4 Support Costs (overheads, core costs, central costs) can be part of the cost of charitable activities. TRUE or FALSE? Answer TRUE SORP 2005 recognised that all costs are part of Generating Funds, Charitable Activities or Governance. Costs must be apportioned between those three categories in a reasonable, justifiable and consistent way. Support costs enable those activities to take place. Difficult to compare administration costs but some grant makers do.

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 5 Accrual accounting is recognising income when earned and expenditure when incurred not when received or paid for. TRUE or FALSE? Answer TRUE All charitable companies must prepare accounts using accrual accounting and all over £250k income. Income should be recognised with entitlement, certainty and measurement.

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Jan-MarApr-JunJul-SepOct-Dec InsuranceCash£1,000 Accrual£250 ElectricityCash £400 Accrual£300£100 GrantCash £1,000 Accrual£1,000

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 6 Only charities with an income of over £500,000 need to have an audit. TRUE or FALSE? Answer FALSE – If your assets are over £3.26M or your governing document requires it you need to have a full audit. Could change your governing document by resolution. Independent examination is perfectly acceptable to most funders.

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 7 The treasurer in a charity is ultimately responsible for the money. TRUE or FALSE? Answer FALSE – All trustees have equal responsibility

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, Question 8 It is against the law to sign a blank cheque. TRUE or FALSE? Answer FALSE It’s not illegal but something you should never do.

IOF Cornwall Trustees & Senior Managers Conference – 16 th November, PRIZES Q & A Everything you need to know

IOF Cornwall Trustees & Senior Managers Conference – 16 th November,