Charity Governance Majid Sadeghi, Partner Rouse Partners LLP - - PowerPoint PPT Presentation

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Charity Governance

Majid Sadeghi, Partner Rouse Partners LLP

Advise > Support > Grow www.rousepartners.co.uk/charity

• Governance
• Risk Management
• Trustee Responsibilities
• Policies and Procedures
• Review of Structure
• Reporting/Internal Controls
• Compliance
• About us

Today’s Agenda

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• Risk Management
• Fraud
• Trustees responsibilities
• Structure and Compliance
• Finance

Governance

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Risk Management Process

Risk based approach Identification of key risks Assessment, management and controlling risks Risk reporting

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• Risk Framework
• Acceptable level of Risk
• Impact on Charity’s reputation / financial position
• Impact on objectives and activities
• Likelihood of occurrence
• Ranking
• Strategies to mitigate
• Reporting line, Sub committees, terms of reference

Assessment Management and Control of Identified Risks

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Key Risks

Governance

• Knowledge

base

• Conflict of

interest

Operational

• Training ,

recruitment

• Policies and

Procedures

• Adequate

Insurance

Financial

• Budgetary
• Segregation
• f duties
• Authorisation

and approval procedures

• Reporting

External

• Stakeholders
• Sector

activities

• External

environment

• Beneficiaries

Compliance

• Risks

associated with

• rganisation’s

status i.e. unincorporated charity

• Charity Act

2006

• SORP 2005
• Trustees

Report

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• Charities are vulnerable
• Resources are limited resulting in reliance on key individuals and lack of

segregation of duty.

• Volunteers and low earning staff
• Rely on trust and goodwill
• No or insufficient training to detect fraud
• Cash transactions
• Recent report published by NFA

Fraud and financial crime affect all parts of the UK economy and this includes the charity sector. The National Fraud Authority's recent survey of 1,000 charities estimated that fraud in the charity sector accounts for 2.4% of total annual charity income, which represents 3% of all fraud in the UK.

• Trustees responsibilities, Good Governance, Fraud Policy
• Charity Commission Guidance - Protecting Charities from Harm

Fraud Risks

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• Trustees have a legal duty and responsibility under charity law

to protect the funds and other property of their charity so that it can be used for its beneficiaries. Code of conduct and best practice.

• The guidance on fraud and financial crime aims to highlight

some of the types of fraud and financial crime to which charities are vulnerable and provide some practical advice for trustees and managers of all charities on how to tackle it.

• Sound financial controls and good financial management are

an essential defence for charities against fraud and financial crime.

• They should be a core part of a charity's culture, and

practised to the same degree of diligence as a charity's activities.

Trustees Responsibilities

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• Access to accurate and up to date financial information and

monitor the charity's financial performance against its budget

• Cheques and cash are kept securely, banked promptly and

recorded in the accounting records

• Cheque books are kept in a secure place - do not sign blank

cheques

• Proper controls in place to protect income received by post

and bank it as soon as possible

• Proper controls in place in relation to fundraising events, such

as making sure two people handle and record the money received, that money is banked as soon as possible and that collection boxes are numbered and recorded

Policies and procedures

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• Keep proper records when claiming gift aid - HMRC give

advice on what should be recorded

• Clear policy on paying expenses to staff and volunteers and

make sure they are authorised by someone other than the claimant

• Controls to ensure that all income from trading is recorded

and received

• Monitoring procedures in place to make sure grants have

been used for the agreed purposes

• Report any suspected fraud to the police and to the Charity

Commission

Policies and procedures

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• Reduce risks and impact of fraud or errors
• Less disruption dealing with fraud or errors
• Greater likelihood of achieving charitable objectives
• Early warning of problems
• Better decision making
• Better allocation of resources
• More effective communication with stakeholders

Benefits of effective procedures

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• Unincorporated
• Company limited by guarantee
• CIO

A CIO is an incorporated form of charity which is not a company. It only has to register with CC and not Companies House. A CIO can enter into contracts in its own right and its trustees will normally have limited or no liabilities for debts of the charity.

Review of Structure

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• Regular, reliable financial information
• Appropriate, understandable format
• Budgets and Variance analysis
• Proper review procedure, discussions by board
• Projections and forward thinking
• Reserves policy
• Investment decisions

Reporting / Internal Controls Financial Information

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• Trustees report
• Historic reporting as well as forward planning
• Policies re financial and non financial issues
• Trustees appointment, resignation in accordance with

governing document

• Trustees review of major risks to which the charity is

exposed and procedures in place to mange them

• Disclosures under SORP 2005
• Charity Act 1993, 2006
• Independent examination
• Audit

Compliance

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• We are one of Buckinghamshire’s largest independent firms of

chartered accountants, auditors and tax specialists, providing all the advice and support you need from under one roof.

• We help individuals and organisations across all industry sectors, but
• ffer specialist experience and technical skills for charity and not for

profit organisations including:

• Charity auditing, accountancy services, payroll and advice - including

book keeping, preparing accounts, governance, reporting and forecasting.

• Complex tax planning and VAT implications for charities - such as Gift

Aid, donations and grant funding, income from selling advertising space, charity shops and the sale of goods, fundraising events, income from social events and overseas donations.

• Ensuring your compliancy with the latest changes in regulation –

including The Charities Act 2006 and rulings from the Charity Commission.

About us

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Majid Sadeghi, Partner t: 01494 683738 e: majid.sadeghi@rousepartners.co.uk

www.rousepartners.co.uk

@RousePartners

Thank you