Regulation with Rosie: writing trustees' reports

The Charity Commission's Rosie Chapman on writing trustees' reports.

We don't expect our solicitors to write our holiday postcards to friends. Some things demand our personal attention because they reflect our personal experience. Trustees' annual reports are one of these things.

No board would let their accountants write the charity's glossy annual report, but it's all too common for them to expect the accountant to write the trustees' report in the accounts. When this happens, it shows.

We've recently reviewed 600 sets of accounts and 44 per cent of the charities sampled with incomes of under £500,000 had poor-quality trustees' annual reports. 'Poor quality' in this case means key information has been left out, yet we know these charities often prepare separate detailed annual reviews that have most or all of the information that should have been in the trustees' reports.

We had more than 39 million hits on our website in the past year, a significant proportion of which were accessing accounts information. A perfunctory trustees' report that has been subcontracted to an accountant is a wasted opportunity.

Trustees and accountants should see it is highly inappropriate for accountants to write most of the report. The Statement of Recommended Practice governing charity accounts states that it is for the charity's trustees to consider providing additional information to give greater insight into the charity's activities and achievements. The accounts are attached to the trustees' annual report, not the other way around.

Figures on their own mean little without explanation. And the trustees' annual report has little value unless it is written by trustees and staff working together to reflect the required knowledge, understanding and experience of what is actually going on in the charity.

- Rosie Chapman is executive director of policy and effectiveness at the commission.

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