News
Public Services Reform Act to introduce changes for charities
The new Public Services Reform (Scotland) Act 2010 will make a number of amendments to the Charities and Trustee Investment (Scotland) Act 2005. These changes, which flow from recommendations previously made to Scottish Ministers by OSCR, will affect charities and their trustees. The Public Services Reform Bill received Royal Assent on 28 April but the changes will only take effect once the relevant sections of the Act have been commenced and, in some cases, only after further regulations have been made. The Scottish Government has not published a timetable for this but we expect most of these provisions to be commenced within the year.
The provisions that specifically relate to charities are contained in Part 6A of the Act.
Changes include:
- Ministers will have the power to require charities to include information relating to their charitable status (e.g. their name and Scottish Charity number) on their websites.
- Charities will be able to ask for a review of our decision to direct it to take steps to meet the charity test. We will be able to vary or revoke such directions.
- The Court of Session will be permitted to bar former charity trustees from being charity trustees again.
- Charities will be able to ask us to approve a reorganisation scheme where the charity is proposing to add a provision to its constitution that will allow it to be administered more effectively. Charities will also be able to ask us to approve the reorganisation of restricted funds.
- Charities will be permitted to use charity funds to provide all their charity trustees with indemnity insurance.
The full Act can be read here.
Rolling Review: agricultural bodies urged to update
As part of our Rolling Review of charities, earlier this month we issued directions to three agricultural charities to amend their constitution. We determined that the wording used to describe their charitable purposes does not comply with the Charities and Trustee Investment (Scotland) Act 2005.
The Rolling Review of charities is the process by which existing charities are reviewed against the requirements of the charity test in the Charities and Trustee Investment (Scotland) Act 2005 (the ‘2005 Act'). The 2005 Act states that charities must have exclusively charitable purposes and provide public benefit in order to meet the charity test and remain on the Scottish Charity Register.
The three agricultural charities have been given twelve months to amend their stated charitable purposes in order to meet the charity test.
For further information about the directions issued please read our news item here.
You can read more about the Rolling Review of charities here.
Integrated Reporting - procurement phase
In previous newsletters we updated stakeholders about our Integrated Reporting project. Our Project Team continues to prepare for the delivery of this major development in our processes, scheduled to begin in 2011.
Following the positive feedback we received from respondents to our consultation, we have recently begun the more technical phase of systems development. We are making the arrangements for the technical delivery of the project and the management of the transition process.
We will also embark on a more detailed internal stakeholder consultation on the development of processes. We anticipate that this more detailed phase will continue until the end of 2010. Meanwhile, we will maintain regular meetings of the Charities Reference Group, to discuss ongoing development and key changes.
We also intend to hold more detailed focus groups and pilot testing sessions early in 2011. If you would like to be kept up to date with developments or would like to take part in any of the focus or pilot groups, please email our Project Manager, Louise Meikleham, at info@oscr.org.uk
You can find out more about our Integrated Reporting project here.
Changes to the monitoring regime
In April 2010 we introduced important changes to our annual monitoring regime. We now fail accounts that do not meet some basic accounting requirements and those where the charity is persistently non-compliant with these requirements.
This means the accounts are returned to the charity to be prepared again in accordance with the legislation.
For accounting periods ending 31 March 2010 and later, accounts will fail the validation process if they do not include:
- a compliant receipts and payments account, statement of balancesor a Statement of Financial Activities (SOFA), and Balance Sheet
- a compliant external scrutiny report from an Independent Examiner or Auditor as appropriate.
In addition, where a charity has previously received three consecutive qualified pass letters and a deficiency is noted with the accounts for the current year, the accounts will be failed. Accounts need to contain, as a minimum, the above 2 fail criteria plus:
- a trustees' annual report
- the signature of one charity trustee on behalf of all the charity trustees
- the Scottish Charity number (SC0xxxxx)
- appropriate information usually contained in the notes to the accounts.
Further information and guidance on our annual monitoring regime is available from our website here.
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Recent Publications
Last month we published a number of documents which looked at the issues surrounding financial difficulties and charity resilience within the sector. These documents included:
Charities in Financial Difficulties
The policy document sets out what we will do and what we will not do when charities are faced with financial difficulties. The policy provides a strategy which will, where possible, assist individual charities to navigate their way through their financial difficulties to a managed outcome which is best suited for the charity and its beneficiaries in the long term.
Read the policy here.
Resilience Research
The independent research report provides an in-depth analysis of our data to establish where there is a correlation between an organisation's profile and characteristics, including its regulatory history, and its resilience. The research provides an insight into both potential risks of failure, and potential success factors. The research will help OSCR, individual charities and professional advisors to identify and address risks to the overall sustainability of the charity.
Read the full report here or the executive summary here.
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Website features
Scottish Charity Register online search
We have introduced a new search facility to the online Register. Website visitors are now able to search the Register by The name the charity is known by. This means that you can search for a charity using a name that it is commonly known by.
You can use the new search facility here.
Updated pages
We have recently updated a number of pages in the Meeting our Requirements (formerly called Meeting Requirements) section of the website. This area of the website provides visitors with useful information and guidance documents on our annual reporting requirements for registered charities. You can read the updated pages here.
In addition to updating the information contained within these pages, we have added a number of new pages to this section. These include:
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