Charity News Alert
Commission stops random checks on charity accounts
Tania Mason
The Charity Commission has abandoned the practice of randomly checking charities’ annual reports and accounts, in a further move to refocus its activities to accommodate funding cuts.
The Commission has already confirmed that it is to cease making random review visits to charities’ offices, relying instead on information about concerns and issues raised in visits to certain selected charities under its ‘engagement initiative’.
But a few weeks ago it also stopped making random checks on the annual reports and accounts submitted to it by charities as part of their compliance with the law. Just over 70,000 of the 169,000 main charities on the register – those with income of £10,000 or more – are required to submit annual accounts to the regulator.
However, the Commission could not say how many accounts were selected for checking each year, because there were so many different monitoring triggers.
A spokesman said that in some cases, certain types of charity might be targeted if other similar charities had been found to be susceptible to fraud. In other cases, charities might be asked to justify operational costs relevant to their sphere of work.
If problems were identified during the checks that took time to resolve, this affected how many more checks were made during the year.
However, serious issues that were uncovered as a result of random checks were “few and far between”, the spokesman said. Most of the problems picked up were presentational rather than serious regulatory issues, he said. “As a result, it has become apparent that this is not the most effective way of monitoring where problems are.”
Also, since the Commission has been putting more accounts online, more are becoming
scrutinised by the public and other charities, who increasingly spot and report irregularities.
So the Commission has decided to rely more on such tip-offs, along with whistleblowers within problem charities and its own caseworkers, to identify serious incidents.
Releasing staff from carrying out random checks will help it reorganise roles in order to accommodate the 5 per cent annual funding cut the government has imposed on the regulator until 2011.
