OPINION: HOT ISSUE - Should trustees who submit their accounts late be fined?

The Public Accounts Committee recommended earlier this month that the Charity Commission crackdown on charities which fail to submit annual accounts on time. One option could be fining trustees. According to the PAC, 38 per cent of charities in 1999 to 2000 failed to submit their returns on time.

LINDA LAURANCE, chair, Charity Trustee Network


There should always be a penalty for non-compliance with regulations, and in the case of persistent failure to submit annual returns and/or accounts by the due date, this should certainly apply. But the penalty, particularly if it is a financial one, should be paid by the charity not the trustees themselves. It would be extremely difficult to identify exactly where in an organisation the responsibility for the delay rests. The trustees are of course ultimately responsible, but in organisations where there are paid staff the actual production of the annual returns is carried out by the chief executive, finance director, and sometimes other members of the management team. The trustees may have been unsuccessful in trying to get the necessary information from them. There are charities where this happens year after year. Fine unrepentant organisations, publicly name and shame them, which would further hit their income, or even remove their charitable status.

DAVID WAKEFIELD, chair, Terrence Higgins Trust and Lighthouse


Before threatening unpaid generally decent citizens doing their bit for the community with financial penalties for non-compliance, we need to understand the reason why 38 per cent of charities were adrift with their reporting requirements in 1999 to 2000. Are the forms too onerous for a typical village hall or cricket club? I've heard well-qualified financial directors of major charities comment on the complexity and lack of clarity of some of the documents.

Also, were the 38 per cent major charities or little clubs, struggling to find trustees anyway and overwhelmed by regulation?

Most major charities are, I believe, companies limited by guarantee, so are already subject to the provisions of the Companies Act for non-compliance. Where the Charity Commission finds, after proper investigation, that a charity has been unacceptably negligent in filing reports on time, consideration should be given to suspending or dismissing the trustees.

Remember, however, that they will possibly breathe a huge sigh of relief and may well be difficult to replace.

LES JONES, deputy chairman, CFDG, and deputy chief executive, WWF UK


The timely preparation of meaningful accounts is a basic discipline that any well-respecting organisation should adhere to. Long delays in the preparation of accounts encourage sloppy financial management which can undermine financial control and ultimately the viability of an organisation.

Today, accounting and accounts are in the spotlight more than they have ever been as a result of corporate scandals in the US. As a result, there is likely to be a developing scrutiny of accounts by the various stakeholders who are interested in them.

This will inevitably spill over into the voluntary sector and our accounts will be more fully scrutinised than ever before. The single greatest risk that charities face is the risk to their reputation. If their accounts are not submitted in the timescale laid down, I believe that in future, this will serve to substantially tarnish reputations.

ADRIAN RANDALL, consultant, Charity & Fundraising Appointments.


I'm in favour of trustees being fined for failing to meet filing requirements in relation to their charity's accounts. Quite clearly where there is persistent failure to report properly, openly and on time and within the regulations laid down, charities must be penalised. The Charity Commission has within the last year begun to get tougher by "naming names

where charities have not abided by the rules and have failed for some time to submit accounts within the 10-month deadline. However, I do not think this is penalty enough and given, as I understand it, that the fine could be as high £2,500, then "naming names

needs to have added to it a fine.

Obviously this deterrent will not affect those trustees whose charities are well run complying with the regulations or those where there is as the Charities Acts puts it "reasonable excuse

but the small minority that do infringe must be reduced. Fining as allowed for by the Charities Acts, must be introduced, as it certainly appears that the "carrot

approach hasn't worked. Certainly ten years after the 1992 Act there are still far too many charities not submitting their accounts on time.

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