ICA awards put spotlight on charity accounting failings

More than half of the entries for the English ICA’s annual charity accounts award ceremony fell at the first hurdle because of errors.

Sir Brian Jenkins, chairman of the Woolwich Building Society, who chaired the panel of judges, said: ‘It was disappointing that 56% of the 555 entrants were eliminated at the first stage for small but significant errors, such as undated or unsigned accounts.’

These shortcomings come at a worrying time for charities. Since March they have had to prepare their annual report and accounts along the lines of a new Statement of Recommended Practice and in accordance with recent accounting regulations.

One of the judges, Moores Rowland’s charities chief, Adrian Randall, said that although a lot of the mistakes in the accounts were due to administrative errors, there were more serious concerns. He said: ‘A number of charities, or their auditors, were not aware of the charities SORP 1988, which was the old recommended best practice for charities accounts before the new rules came in.’

Randall said the judges were concerned that while there had been improvements, smaller charities still faced problems. He said that now the new regulations were mandatory there would be a transitional period while the rules were adopted. But no one would know if the new rules were being complied with until the first sets of annual accounts appeared next year.

Pesh Framjee, partner in charge of Binder Hamlyn’s charity unit, which carried out the technical screening for the awards, was optimistic: ‘We failed a lot of the entries for silly things like not complying with the SORP or for still doing reserve accounting, but we are seeing an improvement in the accounts and the SORP is becoming a Statement of Recommended Practice, rather than a Statement of Rare Practice.’