Accounting and reporting

CFG submits consultation response to Annual Return 2018 Survey

CFG has submitted its proposed revisions and recommendations on charities Annual Return 2018. Our response draws on the evidence gathered through our consultation process with our members and the wider sector.

Our recommendations are summarised below:

  • CFG welcome the effort that the Charity Commission has made to seek to improve the layout and presentation of the Annual Return in order to make it more user-friendly. The Charity Commission is also to be commended for its efforts to engage charities in user testing, which CFG members have engaged in, so that it is able to get the best designed interface possible.
  • However, we are concerned that the additional questions that the Charity Commission is seeking to include will eliminate most of the time savings that this new approach will generate. Feedback from members indicates that the new questions will actually lead to the Annual Return becoming much more burdensome for charities, particularly those that have more complex financial structures such as those that work overseas or deliver public services.
  • We are concerned about the lack of a rationale behind many of the new questions that the Charity Commission wishes to add to the Annual Return. There is a concern that the Charity Commission is seeking to collect data in the hope that there will be a productive use for it, rather than having a clear plan for what the information will be used to achieve.
  • The lack of resourcing of the Charity Commission in recent years means that the regulator has not been in a position to adopt digital accounting reading technology, such as iXBRL, which could reduce the administrative burden on charities. Rather than asking charities to manually populate the data it wants to have access to, the Charity Commission should make the case to government for investment in digital technology to improve its operations.
  • It is important that the Commission’s reach does not extend its grasp and that it only focuses on those areas of risk where there is both a pressing need and where there is the resource to act upon the data received. The Charity Commission should not hide behind a “wall of data” when regulating the sector.
  • CFG were also disappointed with the Commission’s decision to issue a press release in the week before the consultation deadline finished which said that responses had been “largely positive”. The Charity Commission opens itself up to accusations that it is seeking to lead or influence responses towards more positive feedback. We have emphasised to the Charity Commission that they must not be seen to be shaping or seeking to influence consultation responses.

You can read our recommendation in full.

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