One in 10 charities miss accounts filing deadline

More than 15,000 charities failed to file their annual accounts on time in 2022-23 with 9% missing the deadline, compared with 8% the previous year

Sara White, Editor, Accountancy Daily

In the last 12 months 15,200 charities were late were their accounts, showed the latest Charity Commission annual report and accounts 2022-23.

The compulsory charity annual return has been overhauled in the last year, with more information required from charities from 2023 filings onwards.

The annual return 2023 was updated following extensive consultation and is designed to ensure the Commission has the information needed to regulate effectively and will allow it to better identify risks and problems in the sector, and to allow the public to make informed decisions, without excessive red tape for charities.

The Commission is also in the midst of a major IT transformation project which will see the launch of a service for trustees, My Charity Commission Account.

‘This is a complex, significant IT project, and it represents a real investment into our future relationship with individual trustees,’ said Dr Helen Stephenson, chief executive of the Charity Commission.

‘Over time, the service will become the front door for trustees into the Commission – where they can access our guidance, services, and information tailored to and targeted at their needs, depending on who they are, and the charity or charities they are involved in. This is a long-term goal and, in the meantime, we have been working to ensure charity contacts are on-boarded.’

In 2022-23 the total budget was £32.35m of which £32.09m was spent. This was largely funded by taxpayers via the Treasury.

Over the year, the Commission stepped up its investigations’ activity with 72 enquiries launched, compared with 49 the previous year.

‘We have opened 72 new inquiries and have used our legal and enforcement powers on 2,401 occasions,’ said Stephenson.

‘Among the charities we have placed under inquiry is My Space Housing Solutions, a charity providing housing to vulnerable people, which we are investigating over serious governance concerns.

‘We have also placed the Islamic Centre for England Limited under inquiry over concerns about a range of issues, including trustee oversight over events held at the charity, and the content of its website.’

There are 168,893 charities on the register with 4,146 struck off over the last year, compared with 5,252 in 2021-22.

For financial year end 31 March 2023, the Commission regulated £88bn of charity income (2021-22: £83.8bn) and £85bn of charity spend (2021-22: £80.1bn).

After a difficult year for staff retention in 2021-22 with a turnover rate of 27%, the level of employee turnover settled down at around 11%.

However, the Charity Commission said that ‘throughout 2022-23, the recruitment market continued to be turbulent, with limited availability of candidates in the market meaning specialised skills have proved difficult to fill, particularly in accountancy services and digital.

‘We have in place a dedicated recruitment manager who has implemented new and different ways of recruiting, and has led innovative approaches to recruitment, to enable us to compete in the market and attract the calibre of candidate we require.

‘We have continued to monitor our attrition rate which, while it has dropped below levels seen in 2021- 22, remains an issue for us. The impact of rises in the cost of living has been felt and members of our staff took industrial action in March 2023.’