Trustee payments in Scotland 'should all be reported'

Proposal by Charity Law Association in response to consultation by Office of the Scottish Charity Regulator

Scottish charities of all sizes should be required to report on any financial interactions they have with their trustees, according to a Charity Law Association working party.

The working party was responding to a consultation by the Office of the Scottish Charity Regulator on proposed changes to its reporting requirements and online register, which closed at the end of 2009.

The lawyers, chaired by Ann Phillips of Stone King Sewell, endorsed the OSCR's proposal for a shortened annual return, which all charities would have to complete, and a slightly altered supplementary monitoring return for charities with annual incomes of more than £25,000.

But the working party said questions about payments to or transactions with trustees should be transferred from the supplementary monitoring return to the annual return. It said small charities were more likely to pay or transact with their trustees because those trustees typically had multiple roles.

"The SMR questions regarding trustees, payments and transactions are important ones for public trust in the good governance of charities," the response says.

The lawyers repeated the call of a previous working party, also chaired by Phillips, for the online register to include copies of charities' full accounts and annual reports.

The OSCR wants to introduce graphs of financial highlights similar to those on the Charity Commission's register, but the working party said highlights could be misleading because they would not distinguish between restricted and unrestricted funds or set out accounting policies.

The OSCR declined to comment on the CLA's recommendations but said it would release a summary of consultation responses in late February. The new reporting regime is expected to be in place by April 2011.

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