Reading Council has rejected a Conservative councillor’s proposal that charities not "fully up to date" with filing their accounts with the Charity Commission should immediately have their funding from the authority cut.
Mark Ralph suggested that "in the interests of financial probity and to ensure appropriate use of council taxpayers’ money", organisations that fail to file properly audited up-to-date accounts should "suffer immediate cessation of financial support".
Ralph told Third Sector that some charities in Reading, which is governed by a Labour minority administration, had been criticised for failing to file accounts in the required period. He declined to name those organisations.
He said his intention was to ensure organisations funded by the council were "properly run and financially sound". But the proposal was rejected by councillors at last week’s council meeting.
Ralph’s proposal came after Sam Younger, chief executive of the Charity Commission, said last month that the late filing of charity accounts should become socially unacceptable and "the sector equivalent of drink-driving".
The Charity Commission does not penalise charities directly for late filing or non-filing of accounts but, since 2008, charities not up to date with their financial reporting requirements have been given a red border on their entry on the regulator’s online register.
Late submission of accounts is also recorded in the charity’s ‘financial history’ section.