Poor accounting at the centre of charity malpractice

Poor basic accounting and reporting practices are still the main causes of malpractice among charities, according to the Charity Commission.

This assessment comes out of the commission's first annual review of the key themes that arose from its compliance work from April 2007 to March 2008.

The Charities Back on Track report – a result of 799 assessments of charities in the last year – said that while good governance is key to all aspects of running a charity, the basics are sometimes overlooked.

'Accounting and reporting requirements are not merely an administrative requirement for charities… they are important tools helping charities balance the books, plan for their future and account for their income and spending. Ensuring charities meet their reporting requirements will be increasingly important as public scrutiny of charities' effectiveness grows,' the report said.

The report also highlighted a lack of proper controls which exacerbated existing problems and made it harder for charities to get back on proper footing when problems arose.

Further reading:

Charities Back on Track report

Profile: Andrew Hind, chief executive of the Charity Commission