Why it is Important
In Scotland, the formal requirements for accounts and external scrutiny are contained within the 2005 Act and the 2006 Regulations. The requirements differ depending on the constitutional form of the charity, the level of the charity’s income and also any relevant provisions contained within the charity’s governing document.
The 2005 Act requires that as charity trustees, you must:
Anyone who has given time or money to a charity will have an interest in seeing its resources used properly. A well prepared and informative set of accounts will give members, funders, donors and anyone else with an interest in your charity a good picture of the activities and how well you are using the resources.
Proper accounting records must detail day by day the money received and spent by the charity, the assets and liabilities of the charity and show the financial position of the charity at any time.
How you keep the records will depend on the size and complexity of your charity. For small charities, a manual record or simple spreadsheet may be enough. Larger charities may need specialist accounting software.
However you keep the records they should be easy to follow and kept up to date so that the financial position of the charity is clear at all times.
In Scotland, the formal requirements for accounts and external scrutiny are contained within the 2005 Act and the 2006 Regulations. The requirements differ depending on the constitutional form of the charity, the level of the charity’s income and also any relevant provisions contained within the charity’s governing document.
The 2005 Act requires that as charity trustees, you must:
- keep proper accounting records
- prepare a statement of accounts, including a report on the charity’s activities, each financial year
- have the accounts independently examined or audited
- send a copy of the accounts to OSCR, Office of the Scottish Charity Regulator
- keep the accounting records for six years.
Anyone who has given time or money to a charity will have an interest in seeing its resources used properly. A well prepared and informative set of accounts will give members, funders, donors and anyone else with an interest in your charity a good picture of the activities and how well you are using the resources.
Proper accounting records must detail day by day the money received and spent by the charity, the assets and liabilities of the charity and show the financial position of the charity at any time.
How you keep the records will depend on the size and complexity of your charity. For small charities, a manual record or simple spreadsheet may be enough. Larger charities may need specialist accounting software.
However you keep the records they should be easy to follow and kept up to date so that the financial position of the charity is clear at all times.
Key points
- Every year you must complete an online annual return for OSCR
- The following must either be uploaded at the time of completing the online annual return or posted to OSCR:-
- If you are a Charitable Company you will have additional reporting measures to make to Companies House – again these have to be submitted within 9 months of your year end.
- Every year you must complete an online annual return for OSCR
- The following must either be uploaded at the time of completing the online annual return or posted to OSCR:-
- Statement of accounts
- Trustees’ Annual Report
- External Scrutiny Report
- If you are a Charitable Company you will have additional reporting measures to make to Companies House – again these have to be submitted within 9 months of your year end.
Links for more information
OSCR, Office of the Scottish charity Regulator
Legal requirements and good practice for protecting your charity’s finances
https://www.oscr.org.uk/guidance-and-forms/guidance-and-good-practice-for-charity-trustees/charity-finances/
OSCR, Office of the Scottish charity Regulator
Reporting document templates
https://www.oscr.org.uk/managing-a-charity/annual-monitoring/
OSCR, Office of the Scottish charity Regulator
External scrutiny – which applies
https://www.oscr.org.uk/guidance-and-forms/a-guide-to-charity-accounts-part-1-the-overview/section-3-the-external-scrutiny-of-charity-accounts/
Companies House – for Charitable Companies
Guidance on company accounts filing
https://www.gov.uk/government/collections/companies-house-guidance-for-limited-companies-partnerships-and-other-company-types#accounts
OSCR, Office of the Scottish charity Regulator
Legal requirements and good practice for protecting your charity’s finances
https://www.oscr.org.uk/guidance-and-forms/guidance-and-good-practice-for-charity-trustees/charity-finances/
OSCR, Office of the Scottish charity Regulator
Reporting document templates
https://www.oscr.org.uk/managing-a-charity/annual-monitoring/
OSCR, Office of the Scottish charity Regulator
External scrutiny – which applies
https://www.oscr.org.uk/guidance-and-forms/a-guide-to-charity-accounts-part-1-the-overview/section-3-the-external-scrutiny-of-charity-accounts/
Companies House – for Charitable Companies
Guidance on company accounts filing
https://www.gov.uk/government/collections/companies-house-guidance-for-limited-companies-partnerships-and-other-company-types#accounts
