Charity annual returns and the "qualified" accounts question

11 November 2019

Time for our annual reminder:

It's an easy mistake to make and you wouldn't be alone, charities are ticking the box on their Charity Commission annual return saying accounts are "qualified" when they're not.

You might think "qualified" is a good thing, that it means that the accounts have been prepared by someone who was qualified but actually...

"Qualified" accounts means that there are problems with the accounts - don't tick the box by mistake!

In our research at Community Action last year, we found that out of a sample of 90 registered charities in Bradford district, 16 (18%) had ticked "qualified". The voluntary organisation support team has been in touch with those charities and our aim is to raise awareness of the issue more widely.

To help you report correctly, West Yorkshire Community Accountancy Service (WYCAS) has written short, simple guidance on qualified accounts.

We made a mistake, what do we do?

If the accounts shouldn’t be showing as qualified, please contact the Charity Commission directly and they can amend this on their system.

File on time

If your registered charity's financial year ends on 31 March 2020 then the deadline for submitting the charity's accounts/ annual return to the Charity Commission is 31 January 2020.

The Charity Commission has produced guidance on how to prepare an annual return.

How does this affect our fundraising?

Funders make due diligence checks on organisations that have applied for grants, contracts or social investment. Donors and corporate sponsors will do their research too.

Would you give money to a charity that hadn't met its legal duties or where they'd said that there were problems with their accounts?

For a registered charity, one measure of good governance that's easy to check is whether or not the board of trustees has met its legal duties to file information with the Charity Commission. Trustees have a joint responsibility for making sure that the annual return is filed on time and this information is always publically available on the Charity Commission register of charities.

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