Wayne Thomas, Partner at Bates Weston reviews the available support for charities during the Covid-19 outbreak and the guidance issued by the Government and the Charity Commission relating to their governance and reporting.
Support to pay charity staff
Charities are able to access the Coronavirus Job Retention scheme
Using reserves and restricted funds through the crisis
Given your short, medium- and long-term priorities, do you need to amend your financial planning? Can you stop or delay certain projects, spends or activities to focus on essential spending?
The government suggests reserves can be spent to help cope with unexpected events such as the Covid-19 outbreak.
If you have placed internal limits on the use of funds or assets, you may be able to reprioritise these. If funds are restricted there may be ways to amend restrictions but accessing or releasing restricted funds should only be considered if other options such as reserves are not possible. The Charity Commission suggests seeking professional advice as there may be longer term impacts on your financial resilience and on your donor relationships.
Any decisions taken should be taken collectively and action points noted in writing. Here is the Commission’s general tool to help trustees work out what to focus on.
Cancelling or postponing the AGM or other key meetings
If your trustees decide it is necessary to cancel or postpone your AGM or other critical meetings you should record this decision. If it is not possible to hold your AGM you may find it difficult to finalise your annual report and accounts. The Commission urges you to try and get the annual reports to them on time, but those with imminent filing dates should get in touch with them. 0300 066 9197
Use video, teleconferencing and the internet instead of face to face meetings
Check your governing documents. See if you are able to amend them to allow changes to how or when meetings are held. If there is no clause in your governance document and you decide to go ahead with virtual meetings, you must record this decision.
Reporting serious incidents to the Commission
This should continue.
Keeping people safe
Charities must protect and safeguard their beneficiaries, volunteers and staff, following safeguarding guidance.
Reporting accounts and finances
Covid-19 is likely to have an impact on charities’ operations and financial reporting. The SORP-making body’s advice makes suggestions regarding the trustees’ annual report, looks at the implications for going concern and sets out some suggested solutions where the going concern basis of accounts preparation may not be appropriate.
Here is a brief summary – taken from Implications of Covid-19 control measures and charity financial reporting 23 March 2020.
The key messages from the Charities SORP Committee are:
- The measures being taken to contain COVID 19 will impact on charities in many different ways and it is important for charity trustees to understand the impact on the delivery of their activity and their governance including their finances.
- Where a charity is preparing a set of accounts and these have not yet been approved, trustees should consider whether information needs to be included to explain the impact of the COVID 19 situation on their charity.
- There could be changes to the financial statements needed as a result of the COVID 19 situation and it is important that trustees understand and consider these.
- Charities should keep up to date with developing guidance from the relevant charity regulator in their jurisdiction.
Wayne Thomas, our Charities Partner comments:
“The Trustees’ Annual report will need to reflect the impact Covid-19 has had on the Charity itself, the material decisions they have had to take on judgements and uncertainties and may not be prepared on a going concern basis. As specialist charity auditors we are aware of all current issues and will ensure that your charity complies with all relevant guidance.”
If you need our help, please do get in touch.