38% of small charities providing inaccuarte financial information – report

By The Press Association25th September 2018News EnglandBusiness / Funding / Finance, Charities, Finance, Management, News England

Almost 40% of small charities are providing incorrect financial information in their annual returns, according to a Charity Commission report.

In a review of a sample of charities, 38% of charities with incomes below £25,000 per annum were found to be submitting inaccurate data.

Small charities make up two thirds of all charities on the register and basic information on income and expenditure is the only financial information most are routinely required to provide to the commission, it said.

In the sample of charities with incomes over £25,000, income and expenditure figures were 90% accurate.

Larger charities, with incomes over £500,000, must provide more information and in this sample, the commission found a 95% accuracy rate for their balance sheet figures, but income and expenditure analyses were just over 80% accurate.

The Charity Commission, which regulates charities in England and Wales, has concluded that many charities task someone with insufficient knowledge of their organisation’s accounts with completing their annual return figures, resulting in errors.

Nigel Davies, head of accountancy services at the Charity Commission, said: “Not providing accurate financial information is misleading and can have an impact on public trust.

“People want to know how charities spend their money, so this result is clearly not good enough.”

The commission checked the accuracy of financial information provided by its samples of charities in their annual returns by comparing it with their accounts.

In April 2017, it selected two random samples of around 100 charities that had filed their 2015 annual returns or annual updates.

One sample was of 106 charities that had reported an income of £25,000 or more, and the other of 110 charities that had reported an income of less than £25,000.

In January 2018, the commission also selected a random sample of 106 charities that had reported an income over £500,000 in their 2016 annual returns.