How does COVID-19 affect charity reporting?
Charities offer vital support to some of the most vulnerable people in the country, and that support is especially important as we deal with the impacts of coronavirus.
But the jobs of many charities have been made much more difficult over this time, as the restrictions on daily life in the UK have resulted in the loss of much-needed funding streams. Events such as marathons have been cancelled, while corporate sponsors are being forced to cut down on costs.
Added to that is charities’ responsibility of safeguarding employees and volunteers, and dealing with a reduced workforce. While 65-74 year olds are the most likely age group to volunteer for charity, they’re also more likely than younger groups to be self-isolating.
At the start of April, the Government announced a £750 million funding package to be split between charities supporting vulnerable people and those providing key services.
New advice has also been issued for charity accounting and reporting, to support those who might be struggling to meet their usual obligations.
Regulation and annual returns
In March, the charity commission announced that it would allow extensions for charities that are due to submit an annual return, but feel unable to do so as a result of coronavirus.
The commission said that its approach to regulation over this period would be “flexible and supportive”, and that where possible, it will “act in a pragmatic way by taking account of the wider public interest”.
Those who need to request an extension can do so by emailing the charity commission at firstname.lastname@example.org and including their charity name and registration number.
The commission has also published guidance for charities, including information on financial support from the Government, advice on managing financial difficulties, changes to AGMs, reporting, and more.
New SORP advice
The committee that sets out the statement of recommended practice (SORP) for charities has published new advice on what and how to report during this time.
This doesn’t replace any of the existing SORP or add any new requirements, but it offers advice on how to manage financial reporting while dealing with the possible complications of the virus.
The charities SORP committee says it is important for charity trustees to understand the impact of COVID-19 on their activities, and to think about what information they might need to include in their accounts to explain its effect.
As a result of the situation, it might be necessary to make changes to financial statements. Charities have also been advised to keep up to date with guidance from the charity regulator in their jurisdiction.
You can find the full version of the SORP guidance here.
How we can help
At JCS, we specialise in providing accounting services for charities, helping them to meet their reporting requirements and manage their financial position.
We can prepare your statutory accounts in line with the SORP, as well as offering advice on tax and governance.
If you’re concerned about the financial impacts of COVID-19 on your charity, or if you’re unsure about your reporting obligations, contact us.