TPP Finance Breakfast Seminar
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Compliance & Communication - Conveying impact through your annual report
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TPP Finance Breakfast Seminar
- 1. TPP Finance Seminar 4th July 2017
- 2. Finance Salary Survey • 79% of senior finance professionals also responsible for IT department • 53% of respondents plan a career move within 12 months • Flexible working most desired benefit, only 44% of respondents currently get this
- 3. Judith Miller Partner, Sayer Vincent TPP 4 July 2017 Compliance & communication Conveying impact through your annual report
- 4. Critically important: Trust & confidence
- 5. 5 Achieving your objectives…. • Who is your audience? • Who are your stakeholders? • What’s your message to them? • What do they care about?
- 6. 6 Transparency …Honesty… “tell the charity’s story in a fair and balanced manner, acknowledging both significant successes and failures” (FRS 102 SORP 2015)
- 7. 7 Obligation to Opportunity • Key requirements • Who is your audience? • Good examples
- 8. 8 Overview & purpose ref : FRS 102 SORP 2015 • “ensure the charity is publicly accountable” • “should be a fair, balanced and understandable review” • “what the charity is set up to do, how it is going about it and what is achieved” • “essential link between…legal purposes…aims and objectives …activities”
- 9. Who is your audience? Public, beneficiaries Donors/funders Trustees, management Regulator Performance, delivery, summary Technical, compliance
- 10. 10 Head and/or Heart • Are you looking to comply and satisfy the regulators? looking for support and engagement? financially or with time or…? answering the “so what” question?
- 11. 11 Different vehicles • Trustees’ annual report & financial statements Legal requirement Black & white compliance version Stand alone segments • Annual review Choice A “glossy” – web or hard copy Short & sweet with high level financials • Impact report Choice Annual or ongoing snippets
- 12. 12 Process & people • Who needs to be involved? Design team? • What’s the timeline? • Advisable – start early • How does TAR & accounts fit within your communications strategy? • Hard copy? Soft copy?
- 13. SORP requirements for all charities • Objectives and activities • Structure, governance and management • Achievements and performance • Financial review • Plans for the future • Reference and admin details
- 14. Objectives and activities • What are your objects? What do you do to achieve them? • Explain public benefit • Issues to be tackled and how this will deliver against legal objects • Details of programmes, projects and activities • Idea of short and longer term aims • Use of volunteers
- 15. Structure, governance & management • Nature of your governing document • Methods of recruitment and appointment of trustees • Organisational structure • How decisions are made • Trustee training and induction • Remuneration policy • Wider network
- 16. Achievements and performance • Summary of main achievements • Qualitative and quantitative information • Performance against objectives • Comment on fundraising performance • What has contributed to performance – positive and negative? • Measures and numerical targers • Comment on investments
- 17. Financial review • Review of the position at the year end and performance • Reserves policy • Any uncertainties around going concern – explain • Subsidiaries and funds position – any in deficit – explain • Answer any questions?
- 18. Financial review • Principal risks and uncertainties • Investment policy and objectives • Financial effect of significant events • Future factors that might affect performance • Financial impact of pension liability
- 19. • Explain the policy for holding reserves • State the amount of reserves held and why • If trustees have decided that holding reserves is unnecessary, the trustees’ report must disclose this fact and provide reasons behind the decision Reserves disclosures - smaller charity 19
- 20. • Amount of total funds held at year end • Identify restricted funds & designated • Indicate likely timing of designated funds expenditure • Identify funds tied up in fixed assets • State free reserves (unrestricted, undesignated, not fixed assets) • Compare free reserves to reserves policy and explain steps being taken to bring into line with policy Reserves disclosures - larger charity 20
- 21. “To be or not to be?” • The “going concern” assumption • Are we? How far ahead do we need to look? • Are there any “material uncertainties”? • What do we need to say/do? • What does the auditor say/do?
- 22. 22 Content, context & communication • Focus on overall coherent document • Place this year’s performance in the context of your overall strategy - past, present, future • Linkage to non financial stats too • Stories & case studies • Graphics • Any order • Linkage of key policies – reserves, investments, grant making, risk
- 23. Report income and expenditure in line with activities reported in the trustees’ annual report • How charity has used resources to further its charitable aims for public benefit • Single document • What are the key charitable activities? Link trustees’ report and SoFA 23
- 24. 24 Seek out examples • Those operating in a similar space • Award winners eg PWC Building Public Trust awards 2016 • CharityComms – comms perspective Updated April 2017 • Other sectors: NAO Examples of good practice in annual reports
- 25. 25 Source: BHF annual report
- 26. 26 Source: Water Aid annual report
- 27. 27 Source: Prostate Cancer UK annual report
- 28. 28 Source: National Autistic Society annual report
- 29. 29 Source: BHF annual report
- 30. 30 Source: National Autistic Society annual report
- 31. 31 Source: Dogs Trust annual report
- 32. 32 Source: Action against hearing loss annual report
- 33. 33 Source: BHF annual report
- 34. 34 Source: RNLI website annual report 2015/16
- 35. 35 Source: Action Against Hearing Loss annual report
- 36. 36 Source: Water Aid annual report
- 37. 37 Source: BHF annual report
- 38. 38 Source: Dogs Trust annual report
- 39. 39 Source: CRUK annual report 2015/16
- 40. 40Source: CRUK annual report 2015/16
- 41. 41 Source: Dogs Trust annual report
- 42. 42 Source: CRUK annual report 2015/16
- 43. CharityComms – comms perspective www.charitycomms.org.uk/articles/a-year-in-the-life Charity Commission SORP microsite www.charitysorp.org Charity reporting and accounting: the essentials CC15d Sayer Vincent www.sayervincent.co.uk Reading charity accounts made simple Reserves policies made simple Beyond Reserves SORP 2015 made simple Signposting to resources 43
- 44. Judith Miller judith.miller@sayervincent.co.uk Sayer Vincent LLP www.sayervincent.co.uk/ www.twitter.com/sayervincent @SV_JudithMiller Questions? 44
Notas del editor
- Introduce myself – partner at SV where I trained and qualified. 17 years experience of the SORP. Sayer Vincent works exclusively with charities and social purpose organisations My role at Sayer Vincent – partner responsible for technical and compliance matters, but day job is audit partner, senior stat auditor or independent examiner. Member of ICAEW Charities Technical committee. Trustee of Farleigh Hospice in Chelmsford. Spent the last 2-3 years reading about and speaking on SORP 2015. Today is an opportunity to share some of the key issues I anticipate we will face in adopting SORP 2015, whether that’s FRSSE or FRS102. Also look at the practical solutions and ways to prepare for implementation.
- July 2009
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- In this diagram we have on the right hand side, in the pyramid, the different audiences and on the left hand side we can see how the focus changes. So if we start from the bottom up we you have your regulations e.g. Charity Commission, Companies House and in there it’s all about compliance Trustees and management also want to make sure that everything is correct, and reports are compliant as this is their responsibility Donors and funders on the other hand won’t be as concerned about compliance. They are more interested in finding out about the financial viability of the charity, current activities and future plans. And then you have your beneficiaries. They want to know why they should be supporting you. They want to know about your message. Statistics show 99% of the general public are not interested in the figures and therefore the TAR is the most important as it is the selling tool showing what the charity is about and what is trying to achieve, also its impact. But your charity will have other stakeholders, the public, staff, funders, trustees, beneficiaries… and they have other focusses. Do staff need to be more focussed on technical aspects, e.g. fundraisers having a grasp of the numbers and what they mean – reading a set of accounts
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- So what types of messages are you trying to communicate? You need your financial information and details of your objectives and achievements as well as information on future plans. But it should not be too detailed. Reference and administrative details have to be included but don’t have to be included first – they can be moved to the back of the accounts Significant events- how would you summarise the year in order so someone could understand the significance of work What will you need funding for, why will funders, volunteers and staff continue to support you?
- Some other concessions for these “small” charities under £500k…
- Firstly, the SORP is clear that there needs to be a link between the activities you report in the trustees’ report and those you report as income and expenditure on the Statement of financial activities. The report and financial statements need to be a single document telling your story and explaining how you have used the resources available to further your aims. The trustees’ report is the place to describe the aims and objectives, explain how your activities meet those aims, what you have achieved as a result and the impact you have had. The SOFA should then reflect those activities in numbers. In sets of accounts I read, this isn’t always the case. Often the TAR and the accounts are prepared independently. So the practical points to consider are: What are your key charitable activities – if there isn’t currently a link between the trustees’ report and SOFA, which headings will you adopt? Can you report the income and expenditure in this way? Remember that you will need to restate the prior year as well Perhaps start thinking about this now – engage the trustees in the decisions, as well as consider practical considerations of how you will crunch the numbers.
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Some other concessions for these “small” charities under £500k…
- Example accounts from Charity Commission and OSCR on charity SORP microsite. Plus helpsheets. Also Sayer Vincent website! SORP 2015 made simple Reading charity accounts made simple SORP training Template accounts – if interested let me know, if not a client, can purchase for a small fee
- I hope that’s enlightened you on the changes brought about by SORP 2015. We have time for some questions.