The government has recently published the results of their most recent review into Trustees’ Annual Reports and accounts. Despite seeing slight improvements in the quality of public reporting, the Regulator has announced that there are still ‘too many charities falling short in this area’.
What is ‘public reporting’?
Public benefit reporting is an essential part of the Trustees’ Annual Report, a comprehensive document that provides the narrative for a charity’s accounts. In order to comply with the charity SORP, charities are required to give details about their governance structures, their performance and how they have complied with public benefit requirements.
There is, quite rightly, much emphasis on transparency and the Trustees’ Annual Report is the charity’s opportunity to ‘tell their story’ and to communicate with all the stakeholders.
Where are charities going wrong?
During a review of a random sample of 106 charity Trustees’ Annual Reports and accounts, the Charity Commission’s found that 51% of the charities sampled demonstrated a clear understanding of the public benefit reporting requirement.
For the sample of charities where income was over £25,000, the Commission found that 74% of reports were of acceptable quality, thereby meeting the basic benchmark set by the Commission. The most common reason for inadequate reporting was that the Trustees’ Annual Report did not explain the charitable activities carried out by the charity.
For a sample of small charities, the Commission found that 64% of charities provided documents of acceptable quality, therefore meeting the Regulator’s basic benchmark. The main reason for inadequate reporting was that the charity failed to provide one or both of the Trustees’ Annual Report and the accounts.
How can I ensure that our charity’s report meets the requirements and tells our story?
The report and accounts are on held public record and can be easily downloaded from the Charity Commission website. As a result, these documents may well be the first port of call for potential funders or beneficiaries.
Producing a Trustees’ Annual Report is definitely not a “box ticking exercise” – yes, it needs to comply with the SORP but it should also be viewed as a brilliant opportunity to demonstrate how your charity makes a positive impact.
PKF Francis Clark have a wealth of expertise in this field and can help you comply with the requirements whilst making the most of this opportunity. If you would like any guidance from us please get in touch with our Charity Team.