Posts tagged ‘Valuable Resources’

One of the key roles of the Charity Commission is to encourage charities to adopt good practice.  They have set out six clear principles to communicate their definition of an effective charity in their guidance booklet CC10.

For a full copy of this guidance click here.  In brief, these ‘hallmarks’ suggest that a charity that is effective and well governed

  • Is clear about its purposes, mission and values
  • Has a strong, clearly identifiable board or trustee body that has the right balance of skills and experience
  • Is fit for purpose i.e. is structured appropriately to deliver efficient services
  • Is continuously learning and developing to maximise the impact of its work
  • Is financially sound and prudent.  It controls the use of valuable resources to maximise its potential
  • Is accountable to the public and its operations are transparent and understandable to all stakeholders.

It is the Trustees’ responsibility to ensure these hallmarks are in place.

In May 2010 the Scottish Charities Regulator reported that Charities with fewer trustees are more likely to fail.  Obviously quality of Trustees is a more important issue than quantity, but effective recruitment and retention of skilled and dedicated Trustees is imperative.

If your organisation needs assistance in developing these key principles or would like an audit of its effectiveness, please get in touch.  I use my own experiences as an accountant and auditor working in the 3rd sector in conjunction with sourcing highly skilled professionals from my business network to create a bespoke solution.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

Governance

When a member of the public pledges their support they rightly expect their donation to be utilised in an efficient manner which will create the most impact for the cause.

j0399181It is the responsibility of those charged with governance (trustees, directors, board members etc) to deliver this by acting with integrity, financial prudence, reasonable care and skill to ensure the organisation is managed effectively. 

When reviewing the expenses of an organisation, it is difficult to ignore the costs of professional advice.  I strongly believe that all managers of organisations whether achieving profits or not, need counsel. It would be foolish to believe that governors have the time, expertise and experience to deal with all aspects of the operation.

To ensure the best value from key professionals, I recommend an audit of costs every two or three years.  I am not advocating that advisers are changed this regularly as this in itself could prove to be inefficient, but a review and perhaps a tendering process is required to confirm the governors are taking adequate care over how they spend valuable resources.

Since for most third sector organisations an independent examiner or an auditor is a requirement and I myself am an accountant, I will focus on this profession.


The role of an accountant has changed

j0341589Long gone are the days when accountants were merely ‘bean counters’ or ‘tax calculators’.  The needs of businesses in general have changed and accountants have had to morph in to business advisers; budget, productivity and risk managers and strategic board members amongst other things.  Softer skills such as communication, team leadership and to some extent client coaching have become just as important, so if your accountant simply regurgitates the bookkeeping rather than providing constructive advice, you are being sold short; they have a lot more to offer you and your organisation.


Choosing an accounting professional

Providing services to not-for-profit organisations takes expertise as the sector has specific accounting requirements as well as a different type environment in terms of targets, principles, reporting and management needs.  Often the people working within this sector do so for low or no monetary reward and do not necessarily have the same skills of someone who has been involved in a corporate environment.  Therefore the level of support and the approach taken to professional advice should be different.

CBR002975Obviously it is essential that you can get on with your chosen accountant as you need to be able to trust and confide in them, so take the time to interview them and look at their website and publications.  Ask them to explain how their firm operates, what type of clients they service, who would create the team that would service you and what ideas they have for adding value to your organisation.

Ensuring your choice of accountant is competent is imperative to getting best value for accounting or audit services and the advice you need to operate effectively and implement your strategic vision.

Members of the main accounting bodies such as ICAEW and ACCA undergo rigorous examinations and must demonstrate many years practical experience before they are licensed to offer services.  They also must submit a detailed log of ‘Continued Professional Development’ to satisfy their supervisory body that they remain competent.

Less than 700 accountants in the UK currently hold a diploma in Charity Accounting.  To be honoured with the letters DChA by the ICAEW is an achievement I am very proud of. 

Both the ACCA and ICAEW maintain registers of licensed members, but do not be ashamed to ask for proof of qualifications and experience.  If you are still unsure, request references from their satisfied clients in your sector.


The right price for good quality services

money pigIt would be naïve to think that you always get what you pay for, so to make sure you are paying a ‘fair’ value for the services you are receiving you need to

(i)  Research appropriate firms in your region using websites, other professional recommendations and personal contacts.

(ii)  Be open about the scope of the work involved and your expectations and invite other tenders for comparison.

(iii) Ensure the firm you are using are the right size and have the right type of staff to service you properly.  Using a big name firm may provide kudos, but are you getting irregular contact from a newly qualified because you can not afford an experienced decision maker.

(iv) Make sure you read the terms of engagement carefully, this is your contract with them

(v)  Most accountants operate on an hourly fee, but this does not preclude you from knowing the rates involved or requesting a quotation.  Some accountants are happy to provide a fixed annual fee.

(vi) Ask whether there are any internal systems that should be improved to ensure that their time is used effectively.  Good quality management information and supervisory controls can save an auditor a significant amount of time.

(vii) Make sure their fee notes clearly define what you are being charged for and make sure you discuss these on a regular basis.

(viii) Do not avoid contacting your accountant for fear of incurring charges.  Regular communication is an essential part of making both your job and that of your accountant as efficient and effective as it can be.


GH_logo_notag compressedFor further advice or to discuss your accounting needs, contact Toni Hunter FCCA DChA at George Hay Chartered Accountants on 01480 426500  www.georgehay.co.uk

George Hay are registered to carry on audit work and regulated for a range of investment business activities by The Institute of Chartered Accountants in England and Wales. George Hay are members of the UK200 group of professionals. 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post