The Charity Sleuths

What the Intelligent Giving researchers are uncovering, and whose turn it is to make the tea

Friday, July 07, 2006

Quis custodiet...

Having made a previous entry about charities making enormous mistakes in their accounts (26/6/06), I feel I should make the point that the Charity Commission themselves make the odd error or two.

To take a random example (out of many):

Sisters of Mercy of the Union of Great Britain (Charity no. 288158)

The Charity Commission says their income for 2004-05 is £5,525,218

Actually, the figure is £6,189,457

Not exactly a finger slipping on a keyboard.


UPDATE: There is actually a slight difference in the use of terminology here. The Charity Commission (CC) uses the terms 'Gross Income' and 'Total Expenditure' on its 'Show charity' page but these headings do not feature in charities' Statement of Financial Activities or in the Notes to Accounts. They are terms borrowed from the Charities Act 1993. What their accounts show are the 'Total Incoming Resources' and 'Total Resources Expended'.

The differences between these are as follows:
While Total incoming resources are all resources available to the charity in the given year, Gross income is this amount less any gains from disposal of fixed assets, investments, or from revaluation of assets, minus amounts received specifically to increase any endowment fund. But funds released from an endowment fund are included.

Also, to get the Total Expenditure, the CC excludes items like loss on disposal of fixed assets, losses on revaluation and decreases in the endowment fund from Total resources expended.

Why does the CC use these terminologies?
Basically to help in establishing the thresholds of the charities used for determining the requirements for accounts' scrutiny (audits) and also whether the charity should prepare accounts based on the 'accruals' basis or the 'receipts and payments' basis.

Also, because these excluded items are not in the regular 'business of the charity', it helps the CC compare one charity with another.

We use Total incoming resources and Total resources expended as a way of judging the charity by 'the resources it commanded' in the year, and 'the total use of those resources'.



Blogger The Intelligent Giving Team said...

Adam is so polite.

The fact is that Charity Commission (and Guidestar) figures are wrong *very* often. In fact, *so* often that we keep thinking we must be extracting the figures incorrectly. But we're not. What's going on?


9:13 pm  

Post a Comment

<< Home