OG15 L2 Charity accounts and reports: External scrutiny - wording of grants/refusal of dispensation and consent to alteration of year end

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Policy Statement/Overview

IMPORTANT NOTE

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Summary of the guidance

 

Casework Guidance

Please read the IMPORTANT NOTE on the front page

OG15 L2

OG15 L2 External Scrutiny of Accounts: Wording of grants of dispensation or refusal from the requirements of s144(2) of the 2011 Act and of consent to alteration of year end - 16 October 2012 

 

Audit and examination dispensations

 

Regulation 34(2)(a) - sufficiently similar statutory requirements 

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) and 145(1) of the Charities Act 2011.

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(2)(a) of the Charities (Accounts and Reports) Regulations 2008 from the requirements of section 144(2) and 145(1) of the 2011 Act.

 

The dispensation will operate without a specific time limit, unless it is withdrawn by us or the statutory provisions that provide for sufficiently similar requirements to section 144(2) no longer apply to the charity. 

 

This dispensation is conditional also on the trustees sending to the Commission any report made to the trustees with respect to the accounts of the charity for each relevant financial year to which this dispensation is applied.

 

Or

 

Regulation 34(2)(b) - Audit by Comptroller and Auditor General or Auditor General for Wales

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) and 145(1) of the Charities Act 2011.

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(2)(b) of the Charities (Accounts and Reports) Regulations 2008 from the requirements of section 144(2) and 145(1) of the 2011 Act.

 

This dispensation shall only have effect if the accounts of the charity for the relevant financial year are audited by (Audit Body Name).

 

The dispensation will operate without a specific time limit, unless it is withdrawn by us and is conditional on the trustees sending to the Commission any report made to the trustees with respect to the accounts of the charity for each relevant financial year audited under this dispensation.

 

Or

 

Regulation 34(3)(a) - other sufficiently similar arrangements or requirements (independent examination)

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 145(1) of the Charities Act 2011. The trustees have confirmed that the charity meets or will meet the threshold criteria for independent examination for the financial year ended [insert year end date] and that the trustees had elected for an examination rather than an audit.

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(3)(a) for the financial year ended [insert year end date] from the requirements of section 145(1) of the 2011 Act.

 

This dispensation is granted on the basis of the other arrangements or requirements being considered by us, on the basis of the information you have supplied to us, to be sufficiently similar to those imposed by section 145(1) for the independent examination of a charity.

 

This dispensation applies only to the particular financial year referred to in this dispensation and is conditional on the trustees sending to the Commission any report made to the trustees with respect to the accounts of the charity for the particular financial year to which this dispensation applies.

 

Or

 

Regulation 34(3)(a) - other sufficiently similar arrangements or requirements (audit)

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) of the Charities Act 2011.

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(3)(a) for the financial year ended [insert year end date] from the requirements of section 144(2) of the 2011 Act.

 

This dispensation is granted on the basis of the other arrangements or requirements being considered by us, on the basis of the information you have supplied to us, to be sufficiently similar to those imposed by section 144(2) for the audit of a charity.

 

This dispensation applies only to the particular financial year referred to in this dispensation and is conditional on the trustees sending to the Commission any report made to the trustees with respect to the accounts of the charity for the particular financial year to which this dispensation applies.

 

Or

 

Audit under section 29 Audit Commission Act 1998 - other sufficiently similar arrangements or requirements

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) of the Charities Act 2011. You have confirmed that the trustees of [ insert charity name ]  wish to appoint the Audit Commission to undertake the audit of [ insert charity name ] required under section 144(2) of the 2011 Act and that they have agreed to act as auditor under section 29 Audit Commission Act 1998 for financial year ended [ insert year end ].      

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(3)(a) for the financial year ended [insert year end date] from the requirements of section 144(2) of the 2011 Act.

 

This dispensation is granted on the basis of the other arrangements you have entered into with the Audit Commission being considered by us to be sufficiently similar to the requirements imposed by section 144(2) for the audit of a charity.

 

This dispensation applies to the financial year referred to in this dispensation and to subsequent financial years that are audited under the same engagement terms considered for the purposes of this dispensation or a subsequent agreement that does not alter significantly the terms of the audit engagement.   This dispensation is conditional on the trustees sending to the Commission the report made to the trustees with respect to the accounts of the charity for the particular financial years to which this dispensation is applied.

 

Or

 

Other exceptional circumstance affecting a non-company charity

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) of the Charities Act 2011.

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(3)(b) of the Charities (Accounts and Reports) Regulations 2008.

 

The trustees have confirmed that for the purposes of this dispensation they have elected for an independent examination in place of an audit as though this option were available under section 145 of the 2011 Act.

 

This dispensation from the audit requirements of section 144(2) is for the financial year ended [insert year end] only and allows an independent examination in place of an audit for this particular financial year.

 

This dispensation is given based on the information provided by the trustees that the charity is not a company and that the exceptional circumstances outlined would mean that an audit would be a  disproportionate burden in this instance and that there is no constitutional or other requirement on the charity which requires the performance of an audit.

 

This dispensation is also conditional on the trustees sending to the Commission the independent examination report made to the trustees with respect to the accounts of the charity for the particular financial year to which this dispensation applies.

 

Or

 

Exceptional circumstances for an eligible charitable company

 

(note this letter can only apply to financial years starting on or after 1 April 2008 where the charity is not subject to an audit requirement under Part 16 of the Companies Act 2006 - this letter should only be used in conjunction with accountancy advice) 

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) of the Charities Act 2011.

 

[CHARITY NAME] IS HEREBY GRANTED A DISPENSATION UNDER Regulation 34(3)(b) of the Charities (Accounts and Reports) Regulations 2008.

 

The trustees have confirmed that for the purposes of this dispensation they have elected for an independent examination in place of an audit as though this option were available under section 145 of the 2011 Act.

 

This dispensation from the audit requirements of section 144(2) is for the financial year ended [insert year end] only and allows an independent examination in place of an audit for this particular financial year.

 

This dispensation is given based upon the information provided by the trustees that the charity is small charitable company not subject to the audit requirements of Part 16 of the Companies Act 2006 and that the exceptional circumstances outlined would mean that an audit under the 2011 Act would be a disproportionate burden in this instance and that there is no constitutional or other requirement on the charity which requires the performance of an audit.

 

This dispensation is also conditional on the trustees sending to the Commission the independent examination report made to the trustees with respect to the accounts of the charity for the particular financial year to which this dispensation applies.

 

Or

 

Refusal of dispensation to non-eligible company charity

 

Thank you for your application for dispensation from the accounts scrutiny requirements of section 144(2) and 145(1)) of the Charities Act 2011.

 

Unfortunately, we cannot grant a dispensation in the circumstances you have described.  Our powers under regulation 34 of The Charities (Accounts and Reports) Regulations 2008 are limited to independent examinations or audits required by section 145 of the 1993 Act.

 

If a company does not meet the criteria of a small company it will be subject to audit under the provisions of Part 16 of the Companies Act 2006.  We have no powers to grant a dispensation where a charity is subject to the audit or scrutiny requirements of company law. 

 

Or

 

Refusal for request of dispensation from audit

 

Thank you for your letter dated XXXX requesting an audit dispensation.

After careful consideration of the circumstances set out in your request for an audit dispensation I regret that on the basis of the information you have provided a strong enough case has not been made.

In setting the audit thresholds and requirements for external scrutiny, Parliament takes account of the public interest in charity and the need to uphold high standards of accountability to maintain public confidence in charity. In the light of this public interest in charity we are obliged to take great care when using our powers and we do not do so lightly. Our general approach is that the increase in audit thresholds has resulted in a more focussed targeting of the audit regime and so a strong case must be demonstrated if the Commission is to permit a reduced scrutiny requirement from that considered appropriate by Parliament.

We will not therefore agree dispensations unless we consider that a case has been made demonstrating exceptional circumstances. In making your request you identified the following circumstances as justifying the lower level of scrutiny of an independent examination: [case officer to complete].

When considering whether or not to offer dispensation, consideration is given to the exceptional circumstances outlined by the applicant. However we do not believe a sufficient case has been made on this occasion and so your request for a dispensation has been denied.

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Change of Financial Year End

 

Consent to change of financial year end of a non-company charity

(must not be used for charitable companies)

 

Thank you for your application for our consent to amend the financial year of the [insert name of charity]. 

 

In accordance with Regulation 3 of the Charities (Accounts and Reports) Regulations 2008 we consent to the request made in your letter [insert date] to change the accounting reference date to which accounts are prepared.

 

The amended accounting reference date of the charity will be [insert date].

 

Please note that the accounts of your charity should clearly disclose the change in the financial year and explain, in a prominent note to the accounts, the exceptional reasons for amending the accounting reference date to which accounts are prepared.

 

A financial year using this amended accounting reference date cannot be less than 6 months and not more than 18 months from the end of your previous financial year.

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