Finance, accounting and regulation

CFG’s key resources on banking and social investment can be downloaded below.

Find out more about CFG’s Technical Accounting Forum here.

Statement of Recommended Practice (SORP) 2015

Charities have to follow the Statement of Recommended Practice (SORP). This interprets the concepts and principals of financial reporting standards for charities in the UK and Republic of Ireland. The new SORP came into effect in January 2015.

It is important that charities understand the SORP and the new requirements for their financial reporting. Charities can find more information about the SORP on the Charities SORP microsite.

CFG feeds into consultations on the development and implementation of the SORP, working with key stakeholders such as the Charity Commission.

Fraud

Fraud can involve internal fraud (committed by staff or volunteers) and external fraud (for example, individuals falsely claiming to be affiliated with a charity or collecting donations). Fraud has many forms and is constantly evolving.

Charities need to be constantly aware of the risks of fraud and actively manage against it. The impact of fraud can be severe for charities, involving the loss of funds and reputational damage. According to the last Annual Fraud Indicator in 2013, charities lost £147.3m due to fraud.

CFG as part of a group of fifteen organisations has produced a guide for charities on how to manage fraud risks.

If you believe your charity has been the victim of fraud, it should be reported to the police.  Charity trustees also need to report serious instances, including any actual or suspected serious incidents, of fraud, theft or other financial crimes to the Charity Commission. See gov.uk's 'Reporting Serious Incidents - guidance for trustees'.

Charity Law & Regulation

Charities operate in a complex legal and regulatory environment. In return for meeting their duties under charitable law, charities receive significant benefits both in terms of public confidence and tax reliefs.

Charities and charity trustees must understand their legal obligations.

The Charity Commission regularly consults on guidance to reflect the changes in charities’ operating environment and the Law Commission periodically conducts reviews into charity law. There have also been reviews of the Charities Act (which is the primary document for charity law) in recent years, the latest taking place in 2012.

CFG regularly contributes to discussions on these issues, please see our ‘consultation responses’ for more information.

Lobbying Act

The Transparency of Lobbying, Non-party campaigning and Trade Union Administration Act 2014 was passed to increase transparency in politics.

The Act has been opposed by many charities, including Charity Finance Group, and could impact charities that campaign to change policy in order to support their beneficiaries.

The government is reviewing the Lobbying Act and its impact on campaigning, and CFG is feeding into this process.

Charities should also read the Electoral Commission’s guidance on charities and campaigning (.pdf).

Bribery Act 2010

The government has introduced legislation to update the laws on bribery which charities are obliged to follow. The Act covers crucial aspects of charities’ work such as corporate hospitality and facilitation payments, particularly for charities working internationally.

Charities have legal, ethical and reputational reasons for following this legislation closely. All charities should  understand the Act and consider its implications for their organisation.

CFG works closely with international charities, government and regulators to ensure that the legislation is implemented effectively. BOND, Transparency International and MANGO have produced principles and guidance for NGOs.

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