Commission publishes new finance guidance
The Charity Commission has published four updated sets of financial guidance for charities and their advisers covering risk management; financial difficulties and insolvency; reserves and internal financial controls.
These are:
- Charities and Risk Management (CC26);
- Financial Difficulties and Insolvency (CC12);
- Charities and Reserves (CC19); and
- Internal Financial Controls (CC8). 1
The guidance has been revised to reflect new developments and the challenging economic climate that charities now face. It covers the main points of financial management, planning and control in the context of charity law and good practice.
Updates include a new risk grid (CC26) which embraces the principles discussed in the Caritas Guide to Risk Management (May 2010); guidance on controls over internet banking and safeguards against fraud and financial crime (CC8); a checklist of key questions for trustees to establish their charity’s financial position (CC12) and guidance on setting reserves in the context of financial and risk management (CC19).
The updated guidance recognises the need to consider all reserves when deciding on the level of ‘free reserves’.2 Pesh Framjee Head of the non profit team at Horwath Clark Whitehill says ‘It is helpful that the Commission has recognised that new times are creating new challenges. They have acted to refresh their guidance to reflect new thinking in these areas. The guidance identifies important issues and should be of interest to many charities.’
1. www.charitycommission.gov.uk
2. See also ‘Weather protection’ by Pesh Framjee in Caritas, April 2009, page 13
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