Financial Reporting Requirements
At The Wheel’s recent Charity Finance Manager’s Forum kindly hosted by Mazars, Tom Malone, Head of Compliance and Enforcement at the Charities Regulator gave an update and made a number of clarifications about the Regulator’s financial reporting requirements.
Earlier this year, the Charities Regulator published some very useful guidance on internal financial controls and guidance to trustees. Charities are advised to make themselves familiar with this guidance. The Internal Financial Controls Guidelines for Charities is available at http://bit.ly/CharRegFinGuidance
The Regulator’s Guidance for Charity Trustees is available at http://bit.ly/CharRegTrusteesGuide
Tom advised at the event that in order to introduce financial reporting regulations for all charities, certain amendments are required to the underlying Charities Act legislation. These proposed amendments are included in the Courts and Civil Law (Miscellaneous Provisions Bill 2017).
Following the public consultation on the draft Regulations by the Charities Regulator, the intention is to increase the different threshold levels. The indicative figures are set out below.
- Lower limit below which charities will not be required to file accounts with the Charities Regulator is indicatively set at €25,000.
- The band within which charities will be allowed to prepare accounts on what is known as a ‘cash receipts basis’ has been indicatively set from €25,000 to €250,000 – such accounts can, at a minimum, avail of an independent review, the definition of which has been issued in the draft regulations.
- It is proposed that charities with an income over €250,000 will have to prepare accounts in a SORP format and have a full audit conducted.
Tom pointed out that the legislation will have to be passed before the Regulations can be introduced. And while ultimately that timeline rests with the Oireachtas, the Charities Regulator hopes to be in a position to bring the Regulations into effect next year. On that basis, he anticipates that the first date from which the approved financial reporting regulations will apply will be from 1st January 2019.
The Wheel welcomed the clarity from the Charities Regulator and noted that many of its members and other organisations in the sector have already adopted SORP and are reporting to a high standard.