FINANCE NEWS: Commission urged to get tough

MATHEW LITTLE

Trustees of charities which fail to submit annual accounts could face fines after the Charity Commission was told last week to crackdown on charitable organisations which fail to meet basic reporting requirements.

A report published by the House of Commons public spending watchdog, the Public Accounts Committee, said the Commission "must pursue very much more vigorously those charities that fail to submit annual returns and/or accounts by the due date".

The Commission must impose penalties on "persistent offenders

such as levying fines on trustees or taking away some of the advantages of charitable status such as licensing for street collections, said the Committee.

According to the Public Accounts Committee, 38 per cent of charities in 1999-2000 failed to submit annual reports on time or at all. "It really concerns me that so many charities fail to meet their basic reporting obligations,

said Committee chairman Edward Leigh. "In doing so they are treating the Commission with contempt. The Commission needs to take more aggressive action to tackle this."

The Commission is not legally obliged to carry out the Committee's recommendation but if it decides not to, it must give a "robust explanation

as to why within three months.

A Commission spokeswoman said: "We have invested a great deal of effort into enforcing charities' accounts submissions and we are committed to improving submission still further. We will be considering the Committee's recommendations carefully and responding in due course."

The Committee also urges the Commission to move beyond the current level of charity regulation, and examine the scope for publishing "comparative information on the performance of charities of similar type and size". The Commission has already begun work on this, holding a joint meeting with the NCVO on the subject in May.

Simon Hebditch, policy director with Charities Aid Foundation, said that the Committee's report contained "welcome goads

to the sector. "It's right that the Commission should clamp down on charities not filing returns either fully or on time,

he said. Although he added it wasn't clear whether miscreant charities were not meeting reporting requirements because of a struggle against regulation or simple inefficiency.

Hebditch also welcomed the Committee's encouragement of independent measurement of charity performance. "There has to be clearer information about how charities account for their use of funds and also some form of independent validation of what the charity has claimed,

he said.

The Committee found that a round of complaints against the Commission has been upheld. It should learn the lessons of this feedback and, where relevant, change its operating procedures.

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