The joint SORP-making body and SORP Committee are seeking the views of users of charity reports and accounts based on their first year's use of the new Charities SORP (FRS 102). The research exercise aims to gather the views of funders, financial supporters, preparers, trustees, employees and beneficiaries of charities and others who use charity accounts. Clearly that includes many in the health and social care system.
The current Charities SORP (FRS 102) applies to all charities for financial years beginning on or after 1 January 2016.
The consultation aims to identify any necessary changes in good time to prepare the next Charities SORP (FRS 102). This will coincide with the Financial Reporting Council’s planned triennial review of the accounting framework introduced by Financial Reporting Standard (FRS) 102 applicable in the UK and the Republic of Ireland. Changes to FRS 102 will require a new Charities SORP.
Therefore, the SORP research will inform the development of the next Exposure Draft of the SORP – which is likely to be consulted on in 2018. It is expected that the next SORP would take effect from 2019.
The consultation questions are focused on five themes which look at:
Just as charities have varied and diverse stakeholders, charity reports and accounts have a range of users with different needs. The research exercise presents a unique opportunity to consider the current charity reporting framework and users’ needs.
Organisations operating in the public sector will often have strong interactions with charities through grants, contracts to deliver services and other forms of partnership. Within the UK there has been an increasing number of charities involved in delivering public services – allowing the state to expand both their reach and impact of their provision. As such, the public sector represents an important source of income for the charities, with many charities being wholly dependent on government funding.
Charity accounts and reports play an important part in the public sector’s interactions with charities. Financial information provided by charities is key in the commissioning process for contracts to deliver public services. Information about the charity’s performance, achievements and future plans help to facilitate and inform collaborations between the third and public sector.
As such, we would encourage CIPFA members who are users of charity accounts to read and respond to the consultation.
Details about how to respond can be found on the SORP microsite together with the invitation to comment document, or via E: firstname.lastname@example.org. The consultation runs for 31 weeks from 4 May to 11 December 2016.