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Charity Commission update June 2023

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Nicola Adams takes a look at all the latest news from the Charity Commission.

Update to CC8 Internal Financial Controls for Charities

The Charity Commission has updated its guidance on how to manage your charity’s financial activity and use internal financial controls to reduce the risk of loss.

The guidance has been restructured to make it clearer, more concise, and to cover new issues which were not relevant or in existence when the original guidance was drafted. This
includes risks arising from newer technology to reflect the digital age we all live in.

New sections of the guidance cover issues including using mobile payment systems, such as Google Pay and Apple Pay, and considering donations of crypto assets, such as cryptocurrency.

The Charity Commission has also refreshed existing advice on more traditional risks of holding public collections, making payments to related parties and operating internationally. A new section has also been added on accepting hospitality.

To enable the guidance to be put into practice it contains a revised checklist. This checklist enables trustees to have informed discussions about risks, safeguards and controls needed to protect their charity’s assets. Fraud and financial mismanagement can happen at any charity and this can damage a charity’s financial viability, staff morale, the charity’s reputation and
public confidence and trust.

The updated guidance can be found on the Charity Commission website using the link: Internal financial controls for charities.

Charities Act 2022 – June 2023 changes

As we have previously advised, the changes being introduced by the Charities Act 2022 are coming into effect in stages. The first stages came into force in October 2022 and further changes have now been introduced from 14th June 2023. The June 2023 changes are summarised below:

Using permanent endowment

Many charities hold permanent endowment funds, often historic in nature, which are unable to be spent on the charity’s activities. The 2022 Act has introduced new statutory powers to enable charities to spend, in certain circumstances, from a small permanent endowment fund of £25,000 or less without Charity Commission authority. Certain charities may also borrow up to 25% of the value of their permanent endowment fund without Charity Commission authority. Where charities cannot use the statutory powers, Charity Commission authority will need to be sought.

Selling, leasing or disposing of charity land

The new Act simplifies the legal requirements for land transactions. The changes include confirming a trustee or employee can provide advice on the disposal if they meet relevant requirements; widening the category of advisors who can advise on disposals; giving trustees discretion on how disposals are advertised; and removing the requirement for charities to get Commission approval for granting a short or fixed-term residential lease to a charity employee.

Find out more.