At the end of January the Charity Commission issued updated key finance guidance explaining clearly that trustees are ultimately responsible for their charity’s finances.
The Commission is keen to make sure that its guidance reflects the most current challenges facing thousands of charities.
With government funding cuts impacting on charities at the same time as potential increased demands and greater costs, there is more chance that charities will end up becoming insolvent and may need to wind up.
The Commission regards this climate as making their guidance on finance as essential reading.
There are three sets of guidance notes which have been updated based around
1. The need for a good reserves policy, whether a charity has large reserves, or none
Having good financial and management controls which include having budgets and monitoring variances to budgets and taking prompt action where required
2. Knowing the responsibilities of the trustees and actions that they need to take to protect beneficiaries and the assets of the charity should the charity be at risk of insolvency
3. The Commission say that these guidance updates are designed to help trustees ‘make the right call’ and support them, not to overburden them and so there is no standard template to fit all charities.
The 3 sets of updated guidance are:
-Managing a charity’s finances: planning, managing difficulties and insolvency (CC12)
-Charity reserves: building resilience (CC19)
-Charity governance, finance and resilience: 15 questions trustees should ask
If you would like to find out more, or you would like some help with your budgetary processes, or reviewing the effectiveness of your financial management control