Charities pressured to conform
The finance director of one of the country’s best known arts organisations has warned that the regulatory burden for charities compares to that for publicly listed companies
In an interview published in Accountancy Age today, Sarah Kemp,
director of finance and business affairs at The Royal Opera House, said the
pressure of complying with financial regulations and governance rules had become
more intense than ever for charities.
‘We are a charity and because we receive so much public funding, transparency
and attention to the numbers is absolutely crucial. It is an interesting
comparison with a plc world. We need to be absolutely compliant with the
financial regulations,’ Kemp said.
The scrutiny on charities, particularly those involved in the performing
arts, has intensified following a series of high profile court battles and near
collapses.
The Bournemouth Symphony Orchestra recently lost its court battle to receive
a VAT exemption on ticket sales on the basis that it was a voluntary
organisation. The Royal Philharmonic Orchestra, meanwhile, was on the brink of
financial ruin before current FD Richard Huxtable stepped in to rescue the
organisation’s finances.
The Charity Commission has also upped its scrutiny of charity finances,
introducing a new statement of recommended practice for charity accounts in 2005
and starting review visits of charities to monitor financial management.