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

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

3. 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

4. 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)

5. 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

6. 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).

7. 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!

8. Further reading CC Annual Monitoring Reports:
Annual report and accounts:
Less than £25,000 annual income:
£25,000+ annual income:
Public benefit reporting: eporting_by_charities.pdf
The essential trustee – CC3
Three guidance papers on public benefit reporting (PB1, 2 & 3), particularly
Guidance on preparing trustees’ annual report:
CC annual report template for annual report of small charity: annual-report-template