Charity Update: Summer 2020
Here we summarise the latest Charity Commission's guidance covering governance, their new SORP information sheets and further Coronavirus support measures for the charity sector.
7 July 2020
Transparent and accountable governance
The Charity Commission have developed some guidance on the importance of transparent and accountable governance. It is aimed at large charities (with income over £9m) who are also service-providing charities (ie the charity’s front line staff directly interact with its beneficiaries and/or provide facilities to the public). However, it may also be useful to smaller charities.
The guidance provides advice on:
- How charity trustees can hold the executive team to account and maintain appropriate oversight
- How charity executive teams can maintain effective oversight
- Protecting people and safeguarding
Read it here.
Charity SORP – New Information Sheets
The SORP-making body have also published two new information sheets to assist charities in complying with the SORP. These are:
Information Sheet 5: The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, as applied to Charitable Companies
Large charitable companies are required to include energy and carbon information in their directors reports for accounting periods commencing on or after 1 April 2019. This includes reporting on the following:
- The charity’s UK energy use and associated greenhouse gas emissions – as a minimum this relates to gas, electricity and transport fuel.
- An intensity ratio
- Information relating to the charity’s energy efficiency action.
A UK charitable company qualifies as large if it meets two or more of the following qualifying conditions and those conditions have existed for two financial years:
- Gross annual income of more than £36 million
- Gross (total) assets of more than £18 million
- More than 250 employees
The information sheet considers the reporting requirements and the implications for the Trustees Annual Report.
Read more here.
Information Sheet 6: Irish Charities – Merger Accounting and Republic of Ireland Company Law
This information sheet clarifies the position for charities in the Republic of Ireland entering into a business combination with a third party. It confirms that they will no longer be able to apply merger accounting in this situation.
Read more here
Fresh Coronavirus Support Measures for Charities
In addition to the support measures covered in our last update (see here) the Charity Commission has updated its guidance to include insolvency help for Charitable Companies and Charitable Incorporated Organisations (CIO).
The guidance outlines the provisions that have been introduced to the Corporate Insolvency and Governance Act 2020 which will help Charitable Companies, and to some extent CIOs, to continue their operations and avoid insolvency during the COVID-19 pandemic and after. Read more here.
Reporting Serious Incidents
The Charity Commission have also updated their guidance on Reporting Serious Incidents during the coronavirus pandemic. They have published a supplementary table containing examples of incidents specific to COVID-19 that may require reporting. Read them here.
Can we help?
If your Charity has questions or concerns relating to the latest guidance, please do get in touch with our specialist team. You’ll find their details on the right of this page.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary, if you would like advice or further information, please speak to your usual Shipleys contact.
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