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4. Reporting to OSCR: Charity accounts

Published: 30/03/2020
Updated: 22/12/2020

Charity accounts

Most of the reporting requirements to OSCR and the timescales for doing so are set in charity law. We cannot change these. However, we will change the way we respond to delays in reporting at this time.

We want to reassure charities that our approach to regulation during this time will be flexible and supportive.

We understand that for many charities it may be difficult to meet filing deadlines.  We have implemented a ‘grace period’ for charities.  If charities submit late during this time, they will not be penalised by being marked late on our register. OSCR has allowed an additional 9 month grace period for charities whose annual information was due to be submitted during the pandemic period (from 01 March 2020 onwards). This grace period will be valid for all charities with a due date up to the 31 March 2021. After that point we feel that charities should have had enough time to be able to get processes in place in order to be able to submit. If your due date falls after that time, and you are worried about your submission, please get in touch with us at and we can try and help.

Where you have all the information and are able to submit, please do so.  

Wherever possible please scan and attach your accounts in OSCR Online. Any accounts posted to us will take longer to process whilst the office is closed.

At this time we are allowing charities to submit annual reports and accounts with typed signatures to help you meet your deadlines and finalise your accounts without physical or ‘wet’ signatures.

Under charity law all annual reports and accounts for Scottish charities are subject to independent external scrutiny from an independent examiner or auditor.

Charity law does not provide OSCR with the power to grant exemptions from audit or independent examination, even under the current conditions. All annual reports and accounts must have the appropriate external scrutiny report.

External scrutiny is an important part of the annual reporting process. It allows an independent review of the report and accounts, assuring the reader that the accounts set out the financial position of the charity with reasonable accuracy and can be relied upon to make decisions. 

There is new guidance on the COVID-19 impact for audit and independent examination.

UK Charity Regulators have updated their joint guidance on Matters of Material Significance reportable to UK charity regulators.

The UK Charity Regulators have produced new guidance for independent examiners to assist with some of the considerations arising due to the impact of COVID-19.

The Financial Reporting Council have published a range of guidance to help auditors consider the impact of the pandemic on their work.

The SORP-making body has published guidance for trustees and preparers of charity accounts looking at the potential impact of the control measures to contain COVID-19 on financial reporting by charities. The guidance considers the implications for the trustees’ annual report, going concern and the alternative basis to going concern when preparing accounts under the SORP.

A trustees’ annual report (TAR) is the narrative part of your accounts. It contains information about the charity; how it is run; its activities and achievements; and helps to explain the numbers in the accounts.  Every charity needs to prepare a set of annual accounts which must include a trustees’ annual report.

The TAR is really about telling the story of what has happened in your charity over the past year and helps readers understand why you have spent money in the way you have.

The approach you take to explain the impact COVID-19 has had on your charity needs to be appropriate and right for your organisation. The diversity of the charity sector means that one size does not fit all so there is no universal solution.  

We recognise that many charities will be experiencing significant challenges in terms of using current resources, including reserves and thinking about the longer term sustainability of the charity. Some charities will have not been able to carry on any of their activities and will have no funds coming in.

As well as financial challenges, there are many operational challenges for charities. Some are unable to operate, others have an increase in demand for services, significant changes to the work the charity does, fundraising, volunteers, staff.

Whatever the challenges faced by your charity your TAR is a how you can explain what you did and why. 

The SORP guidance highlights the need for charity trustees to explain in their narrative report the impact of COVID-19 on their charity, for example:

  • the implications for the delivery of their activities and services
  • any financial uncertainties regarding the charity’s financial sustainability and the steps being taken to address these and
  • the impact on the charity’s ability to fundraise and how the trustees managed this situation.

These are good points for all charities to cover in their trustees’ annual report at this time, not just charities preparing accounts in line with the SORP. 

In addition, the guidance highlights the relevant considerations about going concern to enable charity trustees to think this through appropriately and make the right decision for their charity.

We also have general guidance on TARs.

The impact of the COVID-19 pandemic is being felt in every walk of life and charities are no different. 

When reading the annual report and accounts of a charity:

  • that have been signed off during the pandemic or
  • where the financial year included the pandemic

it is important to think about what that charity has been through and how the COVID-19 measures affected the charity. 

This will help you understand the information in the right context and avoid misunderstanding. Given the impact of COVID-19, the charity’s finances are not likely to look similar or comparable to the previous years.

The best place to start is with the Trustees’ Annual Report. This is where the charity tells their story of what’s happened during the financial year. The charity trustees should explain how any unusual or unexpected events have affected the charity. For example:

  • how COVID-19 has affected the operations and activities of the charity
  • the impact on the beneficiaries
  • the affect on the charity’s finances
  • how governance arrangements were adapted to cope with the COVID-19 control measures
  • what happened to the charity’s staff and volunteers.

COVID-19 will affect charities in different ways, many charities will experience financial challenges while coping with a surge in demand for their services. Others will not be able to carry out their usual activities but will still have incurred costs. 

The financial challenges facing many charities will be varied:

  • a lack of normal fundraising activities
  • grant funding coming to an end and couldn’t be renewed
  • the charity didn’t have any reserves to draw on to help deliver activities.

It’s reasonable for the accounts to show:

  • a significant decrease in the charity’s income, which may or may not have a corresponding decrease in the amount spent by the charity
  • a large increase in the amount spent on charitable activities
  • reserves of the charity decreasing a lot as they are used to fund the charitable activities (meaning a decrease in the net assets figure on the balance sheet)
  • changes in the value of investments as a result of changes in financial markets.

The impact of COVID-19 on the finances and operations charities will not be confined to just one year and will be seen in annual reports and accounts for some time. Good narrative explanations from charity trustees are key to helping readers understand the impact on the charity both now and in the future. 

In summary, when reading charity annual reports and accounts:

  • be aware of the challenges that the charity has experienced
  • do not expect the finances to look similar to the previous year
  • make sure to read the Trustees’ Annual Report to understand what has happened.

See our blog Charity annual reports and accounts – reading them through the right lens for more information.

All charities have a legal duty to provide a copy of their latest annual report and accounts to anyone who requests them (this duty also applies to copies of governing documents). We expect that funders, donors and the public will have an increased interest in charity accounts during COVID-19.

A good way to publicise how your charity has dealt with COVID-19 is to publish your annual reports and accounts on your website and provide us with a link to go on your entry in the Scottish Charity Register.