Accounts Records to be maintained by Scottish Charities

The Charities Accounts (Scotland) Regulations came into force on 30 September 1992, making it a statutory requirement that day-to-day accounting records must be maintained by all Scottish charities, irrespective of size. Only certain charitable organisations (Designated Religious Bodies and Registered /Unregistered Companies) are specifically excluded from the scope of the Regulations.

If your TN is not a recognised body, it is still advisable to keep detailed records of all financial transactions.

Accounting Records

All the financial transactions of a charity must be recorded, including:

*	daily sums received and expended
*	details of what the receipts or expenditure were for, backed up by paperwork e.g. receipts
*	assets and liabilities

These accounting records must be retained for a statutory minimum period of six years.

Statement of Accounts

The Regulations set out the detailed information that must be given by a charity in its annual Statement of Accounts, which must be prepared within ten months from the end of the charity's financial year. The Statement of Accounts shall be subjected to independent scrutiny. The exact form that the Accounts should take and the degree of independent scrutiny depends on the financial size of the charity.

All Statements of Accounts must clearly state the duration of the financial year to which they relate. Additionally, for all items shown in the accounts, corresponding figures must be given for the previous year.

There are two main formats that the Statement of Accounts may take.

1.	a charity satisfies all three of the following conditions, a simplified Statement of Accounts may be produced:
	I)	gross receipts less than £25,000 per annum, and
	II)	the charity's constitution does not contain a requirement that its Statement of Accounts must be audited, and
	III)	the charity elects to prepare this form of accounts
A simplified Statement of Accounts must include:
	I)	Receipts and Payments Account
	II)	Statement of Balances, as at the last day of financial year
	III)	Notes to the Accounts
	IV)	Annual Report of the activities of the charity
2.	If a charity does not satisfy these conditions, their Statement of Accounts must include:
	I)	Income and Expenditure Account
	II)	Balance Sheet
	III)	Notes to the Accounts
	IV)	Annual Report of the activities of the charity

Approval of Accounts

The Regulations state that the Accounts, and the notes to the Accounts, must be approved by the Trustees (persons in management or control of the charity) and signed by one of the Trustees on behalf of them all. The date of approval and the name of the Trustee who signed the Accounts must then appear on all the copies of the balance sheet (or statement of balances), which are subsequently circulated, published or issued by the charity.

Independent Examination

All Statements of Accounts must be subject to independent examination. If a charity does not exceed either one of the following conditions in any financial year, or in either of the two immediately preceding financial years, then its Statement of Accounts need only be subjected to an examination by an Independent Examiner:

1)	gross income is greater than £100,000 per annum, or
2)	gross expenditure is greater than £100,000 per annum

An "Independent Examiner" is a person who is believed by the Trustees to possess "the requisite ability and practical experience" necessary to carry out a competent examination of the Accounts. The report of the Independent Examiner must state that the Accounts have been properly prepared from the records of the charity and that they are in agreement with them. It will also need to state that the Accounts comply with the terms of the Regulations and, if applicable, of the charity's constitution.

If the charity satisfies the above £100,000 limits, then a full independent audit is required.

Information Available to the Public

If a member of the public requests a copy of your Constitution or Trust Deed, Statement of Accounts or accounting reference date this must be provided within a month. A reasonable charge may be made to cover postage and copying costs. Failure to provide this information can lead to severe penalties.

While ASTN will be pleased to answer any questions relating to the facts as presented above, this is intended only as a guide to the Regulations. The Office of the Scottish Charity Regulator is happy with the principles set down here.

Where to go for financial advise?

Scottish Council for Voluntary Organisations
http://www.scvo.org.uk

Association of Independent Examiners
http://www.acie.org.uk/scotland