'Get your costings right'

Charities should not complain that they are unable to get full cost recovery if they have not calculated the full value of their overheads, a speaker told the Charity Finance Directors' Group conference yesterday.

Richard Weaver, charities partner at accounting firm Haysmacintyre, said charities had only themselves to blame if their service contracts included no proper evaluation of delivery costs across all departments.

"My main concern is that charities that are tendering for service delivery contracts don't always have the knowledge of non-core costs that they need to recover," Weaver told Third Sector before the conference.

"It is not always the funders that are at fault," he added. "It is not up to government agencies or other fundraising bodies to supplement the income of charities that are bad at costing or budgetary control."

Weaver said finance directors should discuss contract details with people across their organisations to make sure that all the possible spending elements of projects are added up. "There needs to be a transfer of knowledge between departments before a bid is put together," he said.

In a separate session, Kate Sayer, a partner at charity consultancy Sayer Vincent, said that finance directors needed to change the way they approached measuring performance.

She told Third Sector: "Good performance indicators will help you to start asking useful questions, such as 'Are we doing the right things?' rather than 'Are we doing things efficiently?'

"Charities should be using performance indicators as a means of getting useful feedback, not blaming people for things they've done wrong."

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