Sector at loggerheads on composition of Sorp Committee

Responding to a consultation on widening the membership of the committee, some sector bodies say non-finance stakeholders should be included, but others oppose such a move

Should the Sorp committee have non-financial representation?
Should the Sorp committee have non-financial representation?

Voluntary sector bodies have disagreed on whether membership of the Sorp Committee should be made more diverse.

In response to a consultation on the work of the committee, which decides which information charities must include in their accounts, the Directory of Social Change and the National Council for Voluntary Organisations said membership of the body should be made more diverse to include other non-finance stakeholders in the sector.

But the Charity Finance Group said the technical expertise on the committee should remain and declined to back such an expansion.

A consultation on reforming the charities Statement of Recommended Practice, which will for the first time produce a single charities Sorp for all four charity regulators in the UK and the Republic of Ireland, closed today.

Organisations including the Association of Accounting Technicians and the consultancy nfpSynergy have previously called for the Sorp Committee’s membership to be expanded to include stakeholders such as donors and the public, as well as for the Sorp itself to become less technical.

In its response to the consultation, the DSC said the vision and mission of the Sorp Committee should be reviewed, including considering whether its purpose was simply to set accounting rules for the charity sector or to improve accounting in the sector more generally too.

The DSC said the committee’s membership should be widened to "incorporate diverse stakeholders beyond the accounting profession" and take into account the views of smaller charities.

The committee should also look at facilitating more discussions about how the principles of open data could be incorporated into charities’ accounting, it said.

In its response the NCVO said that although the level of accounting expertise on the committee should not be reduced, it "would benefit from a wider range of stakeholders".

This would include considering more representation on the committee for smaller charitable companies and donors, or increased consultation with them, the NCVO’s response said.

It said that it "recognises that much of what the Sorp Committee discusses has to be technical by its nature".

But it added: "However, the people following the rules will usually not be experts themselves. That means this work needs to be grounded in their real experience."

The NCVO said the committee could run more events and shorter surveys, as opposed to long consultations, to increase engagement in its work from across the charity sector.

The CFG said that any increase in the Sorp Committee’s remit "would distort its primary purpose" and increasing the amount of information included in charities’ accounts "would exponentially increase the administrative burden charities already face, and would correspondingly increase costs in meeting these additional requirements".

The CFG’s response said that increasing the committee’s size should lead to "improved conversations and decision-making". It rejected arguments that the committee was "overly technical" in its approach.

"By its nature, the Sorp Committee will inevitably have to discuss technical content," the CFG’s response says.

"This is not to say that this is its only remit, and that other views should not be heard, but moving away from the necessary technical discussions would not be conducive for the committee making better decisions."

But the CFG did say it was concerned by the Charity Commission’s prominence in the committee’s governance structure and the committee should have more independence from the regulator.

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