Incidence and perceptions of “qualified” accounts filed by small charities

Abstract

Charities filing accounts with the Charity Commission for England and Wales have been asked since 2014 whether their accounts are qualified. It was found that 96% of charities (£100k–250k income) stating that their accounts were qualified had mis-answered the question. This was explored further with charity personnel and funders supporting small charities: the notion of qualified accounts was found to be misunderstood both by operational charities and by their funders. This raises issues regarding use of data on the Charity Commission’s Register and for charity regulation, as the Commission indicates that qualified reports are a trigger for possible regulatory investigation. HIGHLIGHTS 96% of charities, stating to the regulator they have qualified accounts, do not Term “qualified accounts” misunderstood by small charities and funders Funders seek charity accounting compliance information from regulator Regulator’s website displays inaccurate information on charities’ qualified accounts Funders unlikely to dismiss a small charity solely on basis of qualified accounts.