MHA Trustee Hub

MHA has launched a hub which is a dedicated online resource for Charity and Not for profit entities.

The hub will contain a collection of templates, checklists, policies and procedures, as well as  videos and interviews from our specialists.

Proforma Reserves Policy – On an annual basis the charity reserves policy is reviewed formally by the trustees as part of its strategic and business planning process – are you looking to update your policy? We have template documents which could help with the process

Board Performance Review – This document we have developed includes our handy checklist that helps you drill down and identify what information is needed in advance – resulting in a more productive meeting.

Code of Governance Questionnaire – The code of governance is built around 7 key principles – we have created a questionnaire to make sure all areas of law and regulation are addressed.

New documents will be added to the Hub on a regular basis so please continue to visit the page on a regular basis.

Internal Control Opportunities in the ‘New Normal’

Following the governments signalling the easing of lockdown and announcing measures to encourage the restarting of the economy, it is important that as we do this that we take the time to consider what benefits and efficiencies we have gained through working in a largely remote environment and how we can build these into a ‘new normal’ going forwards.

This is to maximise not only the effectiveness of working practices but also to provide for the welfare of our staff and the way that they choose to live their lives going forward.

We have therefore provided some thoughts below on some of the considerations that should be given when adapting your control arrangements in the new world:

Bring Everyone Together

It is tempting for decisions on how to operate in the “new normal” to be taken at the top or through small decision-making groups. Taking a more inclusive approach to this across the workforce not only engenders a feeling of togetherness but also maximises the likelihood that you will be able to capture more of those marginal efficiency gains that people have developed in a remote environment and be able bring these into the new normal working conditions.

Understand the risks

Knowing not only the risk environment which you operate in but also the organisations appetite to risk will help to enable the right people to make good decisions at the right time.

Ensuring your systems of risk management are effective and up to date will therefore help you in understanding the risks you face in the post-pandemic world but also, given your appetite to risk, how you may choose to respond to these.

Complexity is not your friend

There is sometimes a view that by making a process lengthier and more complex that you reduce the likelihood of material error as so many checks are in place to make the chances of this remote.

In reality this is rarely the case, and it is often simple processes, with appropriate safeguards built in, that work the best as they can be easily understood by all and therefore not only reduce the time taken to process but also the opportunity for someone getting it wrong first time.

The threat of fraud will always be there

Unfortunately, there will always be those who want to exploit people and organisations for their own gain, so it is vital that appropriate safeguards are built into your control environment to minimise the risk of fraud and theft.

For your IT systems this means ensuring that there are safeguards over access to systems, password controls are enforced, and patches are updated as often as required.

There can be great efficiencies gained through moving to electronic processes for areas such as invoice authorisation, but it is important that safeguards are developed to reduce the risk of fraud.

Test, test, test

The importance of testing has been highlighted for different reasons in recent months, but it is  important as part of any changes to control processes that these are tested on a small scale prior to going live to ensure any flaws in the process are identified and rectified before the processes become business as usual.

Support through governance structures

Establishing good governance arrangements at all levels within your organisation will help support thedecision making and help to ensure that the right decisions are made by the right people at the right time.

Seek assurance At first, second- and third-line levels it is important that Boards, via their audit or risk committees, are assured that key internal controls are operating effectively to support the organisation in meeting its objectives.

Therefore, it should be identified how such assurance will be provided and received, and whether independent assurance needs to be sought over key internal control processes.

This article was originally written by our colleagues at MHA MacIntyre Hudson

Maximising your Deposit returns and Security

As we continue to manage our way through the Covid pandemic and start to see some aspects of life return to some form of normality, many of us will have had considerable time on our hands to consider our own financial wellbeing and this will also be true for Charities.

At MHA Moore and Smalley, we understand that it can be difficult for Charities to build and manage cash reserves.

Interest rates in the UK have been at a low level for several years. Currently the Bank of England are weighing up their options to stimulate the UK economy and give it a much-needed boost to help it through the Coronavirus crisis, including looking at a negative base rate. More potential bad news for savers looking at generating a return from their deposits.

For Charities this leaves them with little or potentially no return on the funds they rely on to keep everything going.

The Financial Planning team at MHA Moore and Smalley can help as planning is the cornerstone of financial confidence. We can assist with reviews of rates, mapping a plan of how to secure the highest rates in the marketplace, with an eye on capital security, conducting due diligence on the institutions, and for a lot of our existing charity clients, providing that extra layer of security and acting as an independent credible challenge to the trustees decisions.

As advisers, we provide peace of mind in these uncertain times and help to provide access to rates that are not available in the marketplace. We also take away the headache of research, thus saving time now and in the future on what can be an essential exercise for the charity to maximise its returns.

We do charge fees for our work, but for our existing clients we have been thanked for our efforts and told that we have provided great value for money in the work that we do.

If you feel that you could benefit from an initial no obligation conversation about your own charity’s cash deposits please contact a member of the Financial Planning team on 01772 821 021 or email financialplanning@mooreandsmalley.co.uk

Gift Aid: relaxing of rules

UK Fundraising, in collaboration with CTG, have published details of the relaxation of the following Gift Aid rules:

Cancelled events

HMRC has accepted that a charity may claim Gift Aid on ticket refunds if individuals choose to donate their refund to the charity under Gift Aid. This is subject to the charity informing the individual that the donation is not obligatory but that once made it is non-refundable, alongside a handful of other requirements. This applies to refunds for fundraising events, challenge events, courses and conferences but only if cancelled as a result of COVID-19.

Membership subscriptions

In light of many charities and Community Amateur Sports Clubs (CASCs) reducing or even waiving membership subscriptions as a result of COVID-19, HMRC have accepted that donations made instead of subscriptions and intended to support the charity/CASC may be eligible for Gift Aid. Furthermore, amounts given in excess of reduced subscription rate, may also be eligible for Gift Aid.

Retail Gift Aid Scheme (RGAS)

So long as the charity’s staff have provided an explanation of the Gift Aid scheme to the donor, Gift Aid can be claimed under RGAS with only an ‘oral declaration’. Furthermore, should return notifications be issued by post but not received due to office closure, charities are permitted to continue claiming Gift Aid under RGAS.

Gift Aid Small Donation Scheme (GASDS) HMRC have accepted that cash donors may wish to save up regular donations of under the £30 GASDS limit and give them to a charity in one go once it is safe to do so. Where the charity is happy that these are separate, sub-£30 donations, then the total donation is eligible for GASDS.

This article was originally written by our colleagues at MHA MacIntyre Hudson

Independent examination

New guidance has been issued on the implications of Covid-19 for independent examiners.  This is likely to result in charities being asked for additional information, for example budgets and forecasts  to provide evidence that the charity is a going concern.

The guidance covers five key main areas:

1. Impact of Covid-19 restrictions on access to records and practicalities of completing the work remotely.

2. Access to those in management and control of the charity. 

3. Risk Factors:

a. Change in spending to assist with operational difficulties and whether this is in line with the charity objects.

b. Restricted funds being used incorrectly

c. Difficulty in maintaining financial controls.  With different ways of working there is a risk that the existing controls and procedures are not practical.

d. Risk of misstatement if not accounted for all financial obligations

e. Subsequent Events

f. Going Concern

4. Implications for the Examiner’s Report

5. Sign off and filing of accounts

For further information on the content of this blog, please contact Nicola Mason on 01772 821021 or email nicola.mason@mooreandsmalley.co.uk

Historic England grants

Historic England have launched a Risk Response Fund to award grants for the funding of urgent maintenance, repairs and surveys to historic buildings so that they can open as quickly as possible.  

The terms of the funding include:

  • Buildings must be listed at Grade I or II and must be publicly accessible for a minimum of 28 days per year.  
  • Grants of up to £25,000 are available. 
  • Listed places of worship are eligible. 
  • Work must be started before the end of October 2020 and be completed by September 2021.
  • The deadline for applying for submitting an expression of interest is 28 June.  

https://historicengland.org.uk/coronavirus/covid-19-HAR-fund/

For further information on the content of this blog, please contact Nicola Mason on 01772 821021 or email nicola.mason@mooreandsmalley.co.uk

Reporting serious incidents to the Charity Commission during the coronavirus pandemic

In addition to the previously published guidance on reporting serious incidents the Charity Commission has produced a supplementary examples table to help trustees to decide if they need to report an incident that is related to the pandemic. Trustees should still exercise their judgement in deciding whether an incident is significant in the context of their charity, taking account of its staff, operations, finances and/or reputation. However, some key things for trustees to consider include:

  • Having to take action to meet Government rules, such as closing premises, should not be considered to be a significant incident in itself. It is the impact of this action on the charity that is key to determining if this should be reported
  • The Charity Commission usually expect charities to report any financial losses that don’t involve a crime where they exceed either £25,000 or 20% of the charity’s income. However, these thresholds do not apply when considering financial losses that are related to the pandemic. Trustees should focus on the significance of the impact of any losses rather than the amount.

For further information on the content of this blog, please contact Nicola Mason on 01772 821021 or email nicola.mason@mooreandsmalley.co.uk

GDPR during Coronavirus

With significant changes to how and where confidential donor and beneficiary data is being stored and used during this period of lockdown, the Information Commissioner’s Office (ICO) have created a hub with information to help organisations navigate data protection during this time.

The hub has a series of questions and answers, and explains, amongst many topics, that:

  • Consideration needs to be given to security measures for employees working from home
  • Details of contractions of the virus within an organisation can and should be shared amongst

employees (but employers should not be asking for more information than is necessary); data protection does not prevent an employer’s duty of care

  • The ICO intends to reflect the flexibility permitted by the Regulations and will not penalise organisations it knows to be prioritising areas other than GDPR.

https://ico.org.uk/global/data-protection-and-coronavirus-information-hub/

It is also possible that charities will be looking at alternative ways of raising funds, many of which will be online.  The Code of Fundraising Practice includes a section on digital fundraising.  Trustees and management should review the standards to ensure that any new forms of fundraising are compliant, have been incorporated in to the risk register and appropriate controls and procedures put in place.

https://www.fundraisingregulator.org.uk/code

This content was written by our colleagues at MHA MacIntyre Hudson.

Coronavirus related fraud in the charity sector

The Charity Commission have issued an alert to help charities minimise the risk of falling victim to a recent surge in fraudulent activities. The points to highlight are; fraudulent sales of personal protective equipment have highlighted the need to carry out sufficient due diligence on new suppliers; with more employees working remotely from home and with increased email communication, the need to validate requests to amend bank details is far greater; heightened pressure on fundraising should not excuse instant acceptance of unsolicited goods, services or donations.

The guidance also includes a link to a webinar held in conjunction with the Fraud Advisory Panel to help charities spot Covid -19 related fraud and better protect the charity.

https://www.gov.uk/government/news/coronavirus-covid-19-increased-risk-of-fraud-and-cybercrime-against-charities?utm_source=c8a78da4-d3a6-438c-884d-9b1a5c87bd39&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

This content was written by our colleagues at MHA MacIntyre Hudson.