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RBK Can Guide Charities Through the Regulatory Maze

For almost six decades, RBK has provided accounting, audit and taxation services to businesses both at home and abroad. As Ireland’s largest independently branded accountancy firm, this established firm looks after clients in every sector, including not-for-profit (NFP) organisations.

Like all companies, not-for-profits also require auditing, financial reporting, tax and advisory services and RBK has a wealth of experience in dealing with these issues.

Ronan Kilbane is head of the charity and not-for-profit division within the firm, which has offices in Dublin, Athlone and Roscommon. He explained what the reporting requirements were for charitable organisations.

“The Charities Act 2009 contains eight sections which address financial recording and reporting matters for charities,” he said. “In addition, for incorporated charities [companies limited by guarantee], their reporting requirements are also derived from the Companies Act 2014.

“All organisations on the Register of Charities are required to provide information to the Charities Regulator CRA on their activities on a yearly basis. This is done by logging into their charity account and completing a template which requests financial information and facts about what activities were carried out by the charity.”

Kilbane said financial information and documentation required by the Charities Regulator for the annual return, varied, depending on the gross income of the charity and also the type of organisation.

“An incorporated charity must follow the requirements of the Companies Act 2014 as well as the Charities Act 2009,” Kilbane explained. “Generally, all incorporated charities with income greater than €100,000 prepare full audited accounts for the CRA and these are also filed with the Irish Companies Registration Office.

"Incorporated charities with income of less than €100,000 can avail of audit exemption but often, in reality, charities with income of less than €100,000 can also prepare full audited accounts if their constitution so dictates.

“An unincorporated charity with a gross annual income of €100,001 or more must provide a full set of audited accounts for the reporting period in question. While an unincorporated charity with a gross annual income of between €10,001 and €100,000 must provide a profit and loss account (or income and expenditure account and statement of assets and liabilities) for the reporting period in question.”

A specialist in this area, Kilbane went on to explain that an unincorporated charity with a gross annual income of less than €10,000 could choose to submit a profit and loss account (or income and expenditure account and statement of assets and liabilities) for the reporting period in question - but this is not required.

Education bodies (primary and secondary schools) and incorporated companies listed with the CRO may choose to submit a full set of audited accounts for the reporting period in question but, again, this is not required.

With many issues including GDPR and indeed Brexit impacting Irish businesses, Kilbane explains what challenges may face NFPs over the course of the next 12 months.

“There are ongoing viability and going concern issues such as ability to increase income and funding base and provide the desired level of frontline direct services,” he said. “The ability to fundraise and diversify income streams can be challenging so as to not place over reliance on only one source of funding.

“Rising general administration costs, support costs and governance costs will make it more difficult to allocate funding to front line direct costs. And sectoral reputational damage from recent charity frauds and scandals has led to enhanced public cynicism and apathy which continue to make fundraising more difficult.

“Regulatory compliance may also be an issue, especially if NFPs and charities are not currently SORP Compliant. And, lastly, staff retention and recruiting new staff are an issue for all sectors with a tightening labour market.”

With so many different factors to consider, NFP’s routinely need the input of experts and the accountancy firm, which was established in 1958, covers all of the areas which may require assistance including:

  • Statutory audit and assurance services 
  • Bespoke internal controls and governance reviews for charities and NFP’s 
  • Risk training and assistance in formalising a risk register 
  • Governance training to boards on statutory roles and responsibilities of trustees of charities/NFPs 
  • Internal audit services 
  • HR solutions 
  • Payroll solutions 
  • IT solutions

“We offer experience and expertise, as we are dedicated specialists with a specific charities and not-for-profit team within RBK of around ten people,” said Kilbane. “Being a larger firm, we have access to wider firm departments all under one roof such as tax, HR, IT and payroll, as well as bespoke accounting software to ensure compliance with SORP [accounting and reporting framework]. And given the volume of our NFP clients we have access to a wide database of best practices so we can see clearly what works successfully and what doesn’t.

“It is more advantageous to use an integrated accounting, audit and tax consultancy like ours, rather than individual expert consultants, as synergies can be obtained when all are under one roof and certain duplication of effort can be avoided. And more value can be added by the collaborative process of various departments bouncing ideas and solutions off each other.

"Also, there can be obvious cost benefits by just having one service provider, which can also cut down turnaround times, as deadlines can be more easily managed.”

3rd June 2018, Sunday Business Post