Charity reporting: Interim arrangements and the annual monitoring return FAQs

Please below the answers to our frequently asked question on the interim reporting arrangments and the annual monitoring return. If you click on a question in the list below, you will be brought to the answer for that question. Alternatively, you can scroll down to read all of the questions and answers.

1. What do you mean by ‘reporting’ to the Commission

Registered charities must report to the Commission on an annual basis. If you are registered with the Charity Commission for Northern Ireland, your charity must complete an annual monitoring return form, and submit it online once a year. You must also submit a copy of your charity accounts and annual report(s) for inspection by the Commission, along with the annual monitoring return. This enables the Commission to carry out its regulatory and monitoring activities and provide an up-to-date register of charities in Northern Ireland.

2. What are ‘interim’ reporting requirements?

The Commission began compulsory registration of all charities in Northern Ireland in December 2013; however, charity law in Northern Ireland relating to accounting and reporting is not fully developed. Until the full accounting and reporting regulations are developed by the Department for Social Development (DSD), interim reporting requirements are in place.

Under the interim reporting programme, registered charities must submit to the Commission:

  1. an annual monitoring return which will ask questions on the charity’s activities, governance and finances
  2. a copy of the charity accounts in the format they currently prepare them
  3. a copy of the charity’s trustee annual report (if applicable)
  4. a copy of the charity’s audit report (if applicable)

The key difference during the interim reporting period is that registered charities are permitted to submit their accounts in the format they currently prepare them, and only need to submit a trustee annual report and/or audit report if they already prepare them as part of another legal requirement. This will change when the Department for Social Development (DSD) commence full accounting and reporting regulations (expected 1 January 2015), when all registered charities must prepare their charity accounts and reports in accordance with the form, content, audit and review requirements laid out in charity law.

3. When is submission of a trustee annual report and/or audit report applicable?

If your charity is unincorporated and not under any legal obligation to prepare an annual report or have the charity accounts reviewed or audited, you are not required to do so under interim reporting arrangements.

If however your charity must produce a trustee annual report and/or audit report under another legislation, for example, company law, you must submit these documents to the Commission, as part of your charity accounts, at annual reporting time.

Charities should however consider preparing a trustees’ annual report, and having their accounts reviewed or audited as a matter of good practice. When full accounting and reporting regulations come into effect, all charities will be legally required to prepare a trustees’ annual report and have their accounts reviewed or audited and submit these reports to the Commission on an annual basis.

4. I have registered with the Charity Commission and have a Northern Ireland charity number - when do I need to send in my accounts and annual return?

Interim reporting requirements apply to registered charities with accounting periods beginning on or after 1 April 2014. Registered charities need only report on their first full accounting period after this date.

Registered charities must file their annual reporting information within 10 months of the financial period end.

For example, Charity A registers on 15 December 2013 and has an accounting period end date of 31 March. The first full accounting period after 1 April 2014, is period ending 31 March 2015 and Charity A has 10 months to file with the Commission. The filing deadline for Charity A is therefore 31 January 2016.

Charity A B C
Registration date 15.12.13 25.4.14 16.3.14
Period end date 31 March 30 June 30 September
Period of account 12 months 12 months 6 months
Reporting period 31.3.2015 30.6.2015 30.9.2014
Filing deadline 31.1.2016 30.4.2016 31.7.2015

A charity’s financial period will normally be 12 months but in exceptional circumstances can be shorter or longer. If for exceptional reasons a charity must prepare their accounts to cover a short or long period of account, the accounting period should not be less than six months or longer than eighteen months.

5. Why do we need interim reporting arrangements?

The register of charities in Northern Ireland is now in place and the process of registration has begun.

In the absence of the full accounting regulations, the introduction of interim arrangements enables charities to report to the Commission on an annual basis and ensures the register of charities is kept up to date. This means the public and other stakeholders can view accurate and up to date information on the register of charities and allows the Commission to carry out its monitoring and compliance work, in the interim period.

Charity reporting for registered charities in Northern Ireland will be introduced on a phased basis.

  • Phase one - the interim reporting requirements - are in place now. They focus on the requirements within the annual monitoring return, which will ask registered charities for information on their activities, governance and finances. Under the interim reporting proposals, registered charities will also be asked to provide their accounts and reports in the format they currently prepare them.
  • Phase two - the full reporting requirements - will launch when accounting and reporting regulations, made by the Department for Social Development (DSD), are commenced, which is expected to be 1 January 2015. In this phase, registered charities must still complete an annual monitoring return; however, the accounts and reports that charities provide must be prepared in accordance with the requirements laid out in the legislation.

6. When will full accounting and reporting regulations come into effect?

It is anticipated that accounting and reporting regulations will commence for registered charities with accounting periods beginning on or after 1 January 2015. The Department for Social Development (DSD) in conjunction with the Commission will consult on accounting and reporting regulations during 2014.

7. Why bring in interim reporting arrangements if the full regime will be brought in less than a year later?

In order to carry out our regulatory and monitoring work it is important that the Commission holds accurate and relevant information on registered charities in Northern Ireland. Equally the Northern Ireland register of charities should be a live record and it is important that the information on the register is not out of date or static.

Registered charities have a 10 month filing deadline for submission of annual reporting information to the Commission. If we were to wait until the full accounting and reporting regulations came into force (expected 1 January 2015) before implementing a reporting regime it may mean that charities placed on the register of charities during 2014 might not have their entry updated until 2017.

Furthermore, the Commission is not responsible for making accounting and reporting regulations, these are made by the Department for Social Development, and the Commission cannot implement a full reporting programme until these regulations are commenced.

8. Are reporting requirements going to change completely when the full regulations come into effect?

No. There are three main elements of annual reporting:

  1. The annual monitoring return.
  2. The charity accounts.
  3. The trustees’ annual report.

The annual monitoring return is a permanent reporting requirement, and charities must complete this form under the interim and full reporting programme.

The key difference between the interim reporting programme and the full reporting programme is the requirements charities must adhere to relating to charity accounts and the trustee annual report. The form and content requirements of the charity accounts and trustee annual report, and the level of review or audit these accounts must have, will be laid out in charity law.

During the interim period registered charities can provide their accounts and reports in the format they currently prepare them, however, when accounting and reporting regulations come into force registered charities must adhere to the requirements laid out in the legislation.

9. Who must comply with interim reporting requirements?

All charities registered with the Charity Commission for Northern Ireland must comply with the requirements of the interim reporting programme.

This means charities that have been registered by the Charity Commission for Northern Ireland and had their details entered on the register of charities. It does not mean organisations that are only registered with Her Majesty’s Revenue and Customs (HMRC) for charitable tax purposes, and not with the Commission.

Under the interim reporting programme, registered charities must report on their first full accounting period beginning on or after 1 April 2014.

10.  I am a charity in Northern Ireland but am not registered with the Charity Commission yet – do I need to send my accounts or any other information to the Commission?

No. You do not need to send your accounts or reports to the Commission unless your organisation has been listed on the Charity Commission Northern Ireland’s register of charities. This is not the same as having received charitable tax exemption from HMRC.

Registration began in December 2013 with organisations called forward by the Commission in tranches to apply for registration. It is estimated that there are between 7,000 and 12,000 charities in Northern Ireland so this will be a managed process, which is likely to take a number of years to complete.

As part of their welcome pack, all organisations successfully registered as a charity in Northern Ireland will receive guidance on the reporting requirements they must comply with.

11. What happens if we don’t file annual reporting information on time?

It is your responsibility as charity trustees of a registered charity to ensure that the requirements of the interim annual reporting programme are met. If you do not do so, you are in breach of your duties under the Charities Act.

Your charity has 10 months from its financial period end to complete its annual monitoring return and submit its accounts and annual reports (if applicable), to the Commission. If your charity does not meet its legal obligation to provide this information, it will be shown as being in default on the public register of charities. This can damage your charity’s reputation and ability to attract funding. If a charity defaults on their reporting obligations it may be associated with mismanagement and misconduct and could instigate a compliance investigation into your charity.

12. Where will I get the annual monitoring return form?

During the registration process you will receive a password which will allow you to access Online services via our website www.charitycommissionni.org.uk.

This portal allows you to access your entry on the register of charities where you will be able to complete and submit your online annual monitoring return form through an online process.

13. Who is responsible for filing the annual monitoring return?

The charity trustees are ultimately responsible for completing the annual monitoring return and filing annual reporting information with the Commission on time. If you expect your staff, auditors, independent examiners or another third party to complete it on your behalf then you must make sure this responsibility is communicated, recorded and clearly understood.

14. Why do you ask for our charity bank account details as part of the annual monitoring return?

You must provide your charity’s bank account details during the registration process. As part of the annual monitoring return you will be asked to review information we hold and let us know if any of your details have changed. Obtaining and verifying bank account details is an essential fraud-prevention measure and a critical aspect of regulatory activity. The bank account details you provide are confidential and for the use of the Commission only. We do not make any bank/building society details public on the register of charities.

15. What is included in annual gross income?

Annual gross income differs from total incoming resources / total receipts in a charity’s accounts.

For accounts prepared on a receipts and payments basis gross income is simply the total receipts recorded, excluding the receipt of any endowment loans and proceeds from sale of investments or fixed assets.

For accounts prepared on an accruals basis in accordance with the Charities Statement of Recommended Practice (SORP) the charity's gross income should be calculated as:

  • the total incoming resources as shown in the Statement of Financial Activities (SoFA) (prepared in accordance with the SORP) for all funds but excluding the receipt of endowment
  • including any amount transferred to income funds during the year from endowment funds in order to be available for expenditure.

16. Will I get a reminder when my filing deadline is approaching?

Yes. Registered charities will receive emails to remind them of their filing deadlines, shortly after the charity’s financial year end, and in the subsequent months approaching the deadline. Your charity’s reporting deadline will also be displayed on your individual entry on the public register of charities.

17. Our charity is unincorporated - do we have to prepare our accounts in accordance with the Charities SORP (Statement of Recommended Practice)?

No. Charity law in Northern Ireland does not currently specify the form and content requirements for charity accounts. This will change when accounting and reporting regulations developed by the Department for Social Development are brought into effect, which is anticipated to be 1 January 2015.

At present the Charities SORP is recommended best practice for unincorporated charities in Northern Ireland. Charities may have to prepare their accounts in accordance with the charities SORP if it is stated in their governing document or it is a condition of funding. Charities that are companies must prepare their accounts in accordance with the charities SORP under company law.

18. Our charity is unincorporated and we prepare receipts and payments accounts - is this acceptable?

Yes. At present charity law in Northern Ireland does not specify the form and content requirements for charity accounts. This will change when the full accounting and reporting regulations made by the Department for Social Development are brought into effect, which is anticipated to be 1 January 2015. At that stage all registered charities must adhere to the accounting requirements laid out in the legislation.

19. Do my accounts need audited or independently examined under charity law?

No. At present charity law in Northern Ireland relating to the review and audit requirements for charity accounts has not been commenced. This will change when the full accounting and reporting regulations made by the Department for Social Development are brought into effect, which is anticipated to be 1 January 2015. At this stage registered charities must have their accounts reviewed or audited in accordance with the requirements laid out in the legislation.

Unincorporated charities may need their accounts reviewed or audited as a condition of funding or because it is stated in their governing document. Charitable companies must adhere to the requirements laid out in company law.

20. Where can I find more information on charity reporting?

Please see our Charity reporting: Interim arrangements and the annual monitoring return guidance on our website for further details on charity reporting. This document explains charity reporting requirements during 2014, expected future changes relating to accounting and reporting regulations, and provides a detailed explanation of the information requirements of the annual monitoring return form.

 

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