FINANCE NEWS: Charities told to improve reports

MATHEW LITTLE

The Chief Charity Commissioner has written to the chairs of trustees of the largest 200 charities to urge them to improve the quality of their annual reports.

In an open letter, John Stoker asks charities to "respond positively

to growing demand for accountability and transparency from the media, the Government and the public at large.

The unusual move of a public admonishment of charities over annual reports comes less than two months after a strongly worded Public Accounts Committee report which urged the Charity Commission to "take more aggressive action

to deal with charities which fail to meet basic reporting requirements.

The Commission will respond to the Committee's recommendations in October.

"We should not underestimate the huge improvements in accountability achieved by charities in recent years,

said Stoker. "But, with some shining exceptions, even the largest charities overall performance against the rules and guidelines for annual reporting is not as good as it should be.

"More charities should aim to reach the reporting standards of the best.

Trustees need to check that their charity is living up to its reporting obligations - this is not just a technical matter for their accountants.

They should also regard their annual reports as a positive opportunity to communicate aims and achievements in a clear and engaging manner."

Luke FitzHerbert, researcher at the Directory of Social Change and author of The Major Charities: An Independent Guide, said that the Commission was right to highlight the deficiencies of annual reporting. "Charity annual reports should be the same as those for hospitals and schools, none of which are written by accountants. They are not 90 per cent about money, with nothing about how many people died."

A spokeswoman for the Commission said that the letter was "not a knee-jerk reaction

but part of an ongoing programme of working with charities to improve standards. The letter was sent out to the 200 largest charities but was intended for the whole sector. The largest charities should lead by example, she said.

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