Kent charities come together to strengthen their governance
Kent Good Governance Charity Forum Summary 5 Feb 2019
The inaugural Kent Good Governance Charity Forum event took place on 5 February 2019 at the Hilton Hotel, Maidstone and the following video provides a short round up of what was discussed during the event and the topics that may be tackled in future Forum events.
Dates and venue information for upcoming events will be available shortly.
A round up of the event can be found below along with:
The Kent Good Governance Charity Forum Summary provides an overview of the topics and issues that were discussed in an easy to print format.
Using the code for operational improvement: Alyson Howard, MHA MacIntyre Hudson.
- The code is there to be a tool box not another layer of rules and regulation. Use it to sense check what you are doing.
- Managing risk is not just about policies, it is thinking about what you do, how you do it and what could go wrong.
- Regularly revisit whether what you do is aligned with your charitable purpose.
- Good trustee training can be a great aid for recruitment and retention.
- Proper process and controls are like your suit of armour, they protect, you, but you have to walk into battle!
Legal duties of a charity trustee: Christopher Eriksson-Lee, Brachers LLP
- Charity trustees should make sure they are aware of their legal duties to avoid putting themselves or their charity at risk; more info can be found in the Charity Commission’s guidance ‘The Essential Trustee.’
- A paper trail is essential for compliance; keep a written record of all board meetings, policies and procedures.
- A governing document is a legal requirement for all charities and trustees must have a copy. You can find a useful template via the Charity Commission.
- Decision-making processes need to be informed, rigorous and timely, and effective delegation, control, risk-assessment and management systems must be set up and monitored
- Trustees should have a clear understanding of what constitutes a serious or less-serious incident, and the reporting process that follows.
Good governance from a bank’s perspective: Neil Poynton, CAF Bank
- Understand your legal requirements and obligations – often it is not just a Bank being awkward.
- Adopt an open transparent approach with your Bank.
- Prepare to be asked questions and have the answers ready.
- Do you have the skill set to undertake borrowing or investing.
- Align your actions with your charity’s mission and objectives.
Action: Does your Board and supporting governance documentation empower you to achieve your mission or inhibit it?
Maximising VAT recovery: Sue Rathmell, MHA MacIntyre Hudson
- Good governance for VAT means managing risks and having good procedures in place.
- Be open and transparent with HMRC.
- Make sure you claim the reliefs from VAT that you are due.
- Maximise input tax recoveries.
- Regularly review your VAT position – don’t assume nothing ever changes!
What was the outcome of the audience polls that took place during the forum?
We ran a number of poll questions during the event and these results can be found below.
Which of these registers/policies do you have in place?
Health and safety policy – 97%
Risk register – 84%
Safeguarding policy – 74%
Conflict of interest policy – 55%
Fraud policy – 48%
Reserves policy – 48%
Register of conflict/pecuniary interests – 45%
Investment policy – 35%
Have you conducted a skills audit on your board?
Yes – 55%
No – 45%
Which of the following worries you most in your charity at the moment?
Fundraising – 54%
Recruitment and retention of trustees – 32%
Bank or online fraud – 29%
Contracts with commissioners – 25%
Employment issues – 25%
Safeguarding – 18%
Reputation – 18%
Internal fraud – 14%
Ransomware – 7%
When did you last review your governing documents?
In the last year – 68%
In the last 3 years – 14%
In the last 5 years – 18%
In the last 10 years – 0%
Never/More than 10 years – 0%
What do you think is the first think you will do in response to today?
Read the Charity Code in full – 36%
Review your governing documents – 28%
Review and update your policies – 28%
Consider your organisational purposes – 0%
Review your register of conflict/pecuniary interest – 0%
Decision making and risk control – 38%
Board effectiveness – 33%
Foundation – the trustee role – 13%
Leadership – 8%
Diversity – 4%
Organisational purpose – 4%
Integrity – 0%
Openness and accountability – 0%
Questions and Answers
During the event, attendees posted a number of questions that we have provided answers for below.
To what extent do or should these concepts and principles extend to international charities /NGOs?
The Code is a best practice code for the UK. But those principles and concepts apply ethically further afield. You might want to satisfy yourself that the organisation with whom you work have similar values and codes of practice wherever they may be situated.
How do you define “serious” in terms of reporting? Is this just financial to Charities Commission?
No it is not just financial. Serious is what the board feel is serious. That could be safeguarding, and employee matter or reputational damage.
Do you have a checklist of policies we should have so we can work through what we have or haven't got?
You can look online and take from what is there as a starting point to suit your charity. For example www.smallcharitysupport.uk.
We are not registered for VAT as yet. A 3rd party is running an evaluation workshop for us and this is vat-table? Can we reclaim the VAT - or must we register?
Most charities have to be registered for VAT in order to recover VAT on costs. Only hospices, search and rescue, medical courier and air ambulance charities can make claims for VAT without being registered. Is your provider a charity? Charities can exempt education and vocational training whereas businesses have to charge VAT.
We struggle to find trustees. How can we ensure we have diversity and also ensure we have people who have the right skills?
A good place to start is to read Getting on Board's report on trustee recruitment.
Any guidance on "tips" 're maximising Gift Aid would be well received
Use the small gift exemption to save on paperwork.
Can you clarify what is non-business activities in terms of VAT recovery?
Charities can't recover VAT on costs relating to their non-business activities. Grants and donations where they are freely given with no expectation of getting something in return.
Our governing document is old and not relevant to our current work. How easy is it to change and by how much can we change it?
It can be changed and the Charity Commission is open to the need for charities to do this.
Are grants to work with x number, a business activity?
Grants can be either business activities and therefore subject to VAT or non-business activites and therefore outside the scope of VAT. The important determining factor is whether the 'donor' receives something in return for their grant. There have been many cases in this area and each grant has to be looked at individually. What the contract or agreement says is very important in determining the VAT treatment.
As a smaller charity we have not required an investment policy to date! To comply with the governance charter should we create this policy anyway?
For a small charity what is important is that you record you have considered it. Your response might be that you do not need one as you do not have surplus funds to invest.
Are charities ready for the VAT implications relating to Making Tax Digital?
Good question! Charities are required to be ready just like everyone else, with their first VAT return beginning on or after 1 April 2019. Records must be kept digitally and VAT returns submitted digitally. VAT group registrations have a 6 month extension. HMRC have promised a 'light touch' to enforcement in the first year of operation. MacIntyre Hudson can submit VAT returns using bridging software on behalf of clients so please contact Sue Rathmell if you need help.
We have no empirical evidence from which to draw a well founded conclusion but I believe it to be the case.
What’s the panels view on CEO”s being trustees?
Paid trustees open the risk of conflict. Audience point - The trustees are the government and the operation team are the Civil Service!
What is the panel's view on a trustee being co secretary as opposed to a member of executive?
The Company Secretary does not carry the same level of responsibilities as a trustee, so I do not see why a member of the executive team should not do this role, especially as it means the executive can control the necessary filings with Companies House and the Charity Commission.
Download the file on Kent Good Governance Charity Forum Summary
Download the file on CAF Bank Slides
Download the file on MHA Slides - VAT
Download the file on MHA Slides - Overview
Download the file on Brachers Slides