Updated guidance from the Charity Commission CC12
The Charity Commission has been more proactive in reviewing charities that are experiencing financial difficulties. As well as an update to their guidance in CC12, there is a report on their website: 'What should you do if you are concerned about your charity’s financial position?'
Sayer Vincent have put together a few pointers:
- Make sure you are getting reliable financial reports regularly. These need to tell you the current financial position and look forward
- Speedy updates containing reasonable estimates are better than perfectly reconciled accounts that are slow to produce
- Monitor cash flow closely, updating it weekly at least
- Consider the nature of your funding and talk to funders early. If your funding is restricted, you need to get permission to use it for unrestricted purposes
- Funders may well be supportive and may agree to support a restructuring plan, but you need to talk to them early and be completely open with them
- Be warned that redundancies cost more in the short-term because of pay-offs so savings will only come in the future financial year
- To retain capacity and make short-term savings you might be able to talk to staff about reducing hours, secondments or sabbaticals
- Make sure you have properly understood the underlying issues before you make decisions
- Involve the board e.g. with a weekly conference call to update them
source sayervincent 24.10.16.