Are you a trustee for a charity? This is what you need to know about overseeing charity accounts

Charity trustees, also known as board or committee members, are the people who lead the charity and decide how it is run. Being a trustee means making decisions that will impact people’s lives. You can read more about the work of a trustee here. With over 400,000 charities registered in the UK needing trustees to oversee their work and finances, it really is a great way to ‘give back’ to our communities.

As a trustee of a charity, you have six main duties including: making sure your charity is accountable and managing your charities assets responsibility. This specifically includes complying with any restrictions on spending funds – meaning you have an obligation to make sure that your charity’s money is safe, properly used, and accounted for, even if your charity has an expert to manage its finances.

Here are some hints and tips to help trustees oversee their charity accounts – and as an experienced charity accountant, we’re always happy to help.

Ensure that all outgoings are necessary and appropriate

Having a sound reason for each expenditure or donation is imperative to fulfil your duties as a trustee. This means consistent decision making. Consider creating a checklist when making donations to ensure you are fulfilling your stated purposes, and minuting why a decision was made – or rejected.

Access all the tax relief that the charity is entitled to receive

A charity recognised by HMRC is entitled to receive various tax relief for example, charities do not pay tax on most types of income as long as they use the money for charitable purposes. You can claim back tax that’s been deducted, for example on bank interest and donations (this is known as Gift Aid). Find out more at the gov.uk website or contact your charity accountant.

Set a budget and keep track of it

Part of the trustees’ responsibility is to oversee the management of the assets of a charity. Each year, you may have fixed costs to run the charity, such as maintaining offices, or paying trustees any reasonable expenses. By maintaining and regularly reviewing detailed accounts, you will clearly see how much money you need to fundraise and how much you have to spend and/or distribute. This clear view protects the charity assets and its reputation. It may be worth investing in the services of an experienced charity accountant to help with these tasks.

Ensure the charity keeps accurate records of income and expenditure, and that you minimise risk

There are many actions you can take under this banner but consider how you can prove that you remain accountable at all times. This may include numbering any tickets on sale for events and keeping a record of who is selling which tickets, immediately banking cash without deducting expenses from it, only opening collection boxes and counting cash in the presence of a second, unrelated person.

Support with charity fundraising

The Charity Commission is clear that fundraising is a trustee responsibility in their CC20 fundraising regulations and the Fundraising Regulator’s code of practice. HMRC, the Gambling Commission, the ICO, and others, issue guidance on the law, rules and legal requirements in the UK. It is not trustees’ responsibility to do all the work themselves, but it is their responsibility to ensure that it is done.

Act in the charity’s best interests

Only individuals who are a charity trustee can be involved in the decision making around what will be best in helping the charity to carry out its purposes. When planning for the future of the charity, ensure that the purposes and goals of the charity are at the forefront of every decision or proposal and always make informed decisions. Seeking external professional guidance could give you additional insights.

Call HB Accountants for help

Gov.uk and the Charity Commission have issued detailed checklists to support trustees.

If you want to discuss the specific accounting requirements for charities, or to discuss charitable giving from your own business, do give us a call. Not only can we help with your questions, we can offer you support with your tax, management accounting and so much more. You can contact us on 01992 444466. We’re accountants for businesses and for people. We’re here to help.

The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors

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