Charity Commission have released a report into an organisation that was defaulting on submitting its returns. It makes very interesting reading. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/525713/gresley_old_hall_community_welfare_centre.pdf
The charity had failed to make returns for two years in a row, and had been repeatedly warned by Charity Commission.
One of the Charity Trustees stated the reason for not making their returns was:
"due to the fact that the charity’s previous accountant had retired and
time was taken to identify a suitable replacement to carry out the work professionally and at a reasonable
This does not excuse the failure of the trustees to fulfill their statutory obligations.
The Commission state that:
"The charity’s trustees were in default of their legal obligations to file accounting information with the
commission. This was mismanagement and misconduct in the administration of the charity and a breach
of their legal duties."
They also state that:
"Trustees of charities with an income of over £25,000 are under a legal duty as charity trustees to submit
annual returns, annual reports and accounting documents to the commission as the regulator of charities.
Even if the charity’s annual income is not greater than £25,000 trustees are under a legal duty to prepare
annual accounts and reports and should be able to provide these on request. All charities with an income
over £10,000 must submit an annual return.
Failure to submit accounts and accompanying documents to the commission is a criminal offence. The
commission also regards it as mismanagement and misconduct in the administration of the charity.
For those individuals who were not trustees at the initial date of default, when they became a trustee, they
became responsible for making good the default.
It is important that the financial activities of charities are properly recorded and their financial governance
is transparent. Charities are accountable to their donors, beneficiaries and the public. Donors to charity are
entitled to have confidence that their money is going to legitimate causes and reaches the places that it is
intended to. This is key to ensuring public trust and confidence in charities."
(Source: Charity Commission)