Do charities need to submit their accounts to OSCR?

When you’re running a charity, much of your thought and energy will rightly be spent on fulfilling your charitable objectives. However, you’ll also know that there are many other things to consider, from HR to finance.

Finance alone requires specialist knowledge, with differing requirements depending on the scale of your operations. Getting it right is essential to your credibility.

Here is a summary of what your financial reporting obligations are to the Office of the Scottish Charity Regulator (OSCR).

What you need to submit to OSCR

Every year, Scottish charities must send OSCR their annual accounts, trustees’ annual report, external scrutiny report, and online annual return. This must be done within 9 months of your financial year-end.

Depending on your charity’s income, legal form and constitution, you’ll need to use one of two methods to prepare your accounts: receipts and payments, or fully accrued.

Receipts and payments is the simpler of the two types and accounts. This means you need to provide a summary of all the money received and paid by your charity during its financial year, and a statement of balances at the year end.

Fully accrued accounts, meanwhile, require you to record all the transactions of your charity in the financial year. They include all the income you’re due to receive, and all the debts and expenses you have yet to pay. These have to be prepared in accordance with the charities’ Statement of Recommended Practice (SORP).

Generally speaking, a charity with a gross annual income under £250,000 will use the receipts and payments method, unless:

• its constitution says it should prepare accrued accounts
• its trustees have decided to prepare accrued accounts
• any enactment says they should prepare accrued accounts (eg the Companies Act 2006 says charitable companies should do this)
• any requirements from third parties, such as funders

Do your charity accounts need an audit?

To ensure your accounts are accurate and in line with regulations, they must also be independently scrutinised.

This can be done through an audit or an independent examination.

Audits provide “reasonable assurance” that your accounts are free from material misstatement. They should be carried out by registered auditors, complying with the UK Financial Reporting Council’s ethical standard for auditors, and International Standards on Auditing (UK).

Independent examinations are less rigorous, with an examiner considering whether the accounts are legally compliant, supported by accounting records and show an accurate picture of the charity’s financial affairs.

Again, the appropriate option for your charity will depend on a number of reasons, including:

• your gross income and value of assets
• your governing document
• whether the charity is a company
• the charity trustees’ decision
• any third party requirements

Can an accountant help with OSCR filing?

The trustees of a charity do not have to directly complete the annual return, so a trusted adviser like an accountant can help you to meet your OSCR and accounts filing requirements.

Accounting for charities requires specialist knowledge, and an experienced accountant can help navigate around all the pitfalls. They can also carry out independent examinations, and if they’re a registered auditor, they can carry out an audit.

If you would like help ensuring your charity is set up correctly and meeting its reporting requirements accurately, get in touch with our experts.

We’ll be happy to help you get moving with your best foot forward.