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TPP Finance Seminar: Whistle-blowing to the Charity Commission by Auditors and Independent Examiners

Posted on 20/06/2018 by

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On Wednesday 13th June, we held our annual TPP Finance Seminar, with guest speaker, Neal Gilmore – Charities Principal at HW Fisher & Co. Neal discussed Whistle-blowing to the Charity Commission by Auditors and Independent Examiners. Our delegates consisted of up to 45 charities finance sector personnel, ranging from Trustees to Finance & Resources Directors.

Neal started the seminar by discussing the Charity Commission guidelines on serious incident reporting by Trustees. Some incidents being more obvious such as serious financial crime or links to terrorism, with others being harder to spot or define such as potential financial loss to a charity or suspected criminal activity.  Neal noted that until all serious incidents have been reported, you will not be able to make a declaration or complete the annual return, which is a statutory requirement.

After dealing with Trustees’ obligation to report, Neal then moved on to focus on reporting of incidents by Auditors and Independent Examiners. He spoke about the anonymity and legal protection that Auditors have when whistle-blowing and reporting.

The ‘matters of material significance’ required to be reported by Auditors again ranged from more obvious issues such as fraud and failures of governance to more subjective matters like the breach of an order or direction made by a charity regulator, conflicts of interest and related party transactions managed inadequately.

Next Neal focused specifically on the financial matters that should be reported to the Charity Commission by Auditors, an area perhaps more familiar to the Finance Directors in the room. Neal highlighted these guidelines for reporting by Auditors:

  • Although it is not an amount material to the accounts a breach of trust (e.g. improper use of restricted funds) where the trustees have taken no remedial action
  • A donation from an unknown source with conditions where the trustees have not notified the regulator
  • Uncertainty over the renewal of a contract which is a material source of income to the charity
  • Over reliance on a key individual

Neal concluded the seminar talk and we had a thoughtful Q&A section at the end of the seminar,  the attendees were thoroughly engaged with Neal's answers and opinions. Questions around the Charity Commission’s capacity to deal with so many whistle-blowing issues were a common theme. Neal agreed that the capacity of the Commission is probably limited, but it is undoubtedly best practice to report anything untoward.

In summary the key points from Neal were:

  • Charities should ensure that such potential risks are considered as part of your risk management processes
  • Ensure the necessary procedures and checks are in place
  • Train staff, trustees and volunteers
  • Take professional advice where necessary

If you are interested in attending any of our future finance events or if you would like to put forward any areas of discussion within the charity finance sector, please contact the finance team on 020 7198 6050 or email finance@tpp.co.uk.