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inappropriate investment policies, fraud and error, etc. To minimise nancial risk, the trustees of religious institute charities should:
Keep reliable books and records i.e. “proper books of account”
Maintain an affective system of internal control including proper delegation and segregation of duties, authorisation and approval, the employment of properly quali ed staff and advisers, budgetary processes, payroll procedures, controls over purchases and expenditure, controls over the collection of all income due, and so on
Maintain adequate reserves to ensure long term commitments can be met
Control and safeguard the charity’s assets including property (through a detailed maintenance programme) and investments (through good investment policies and the appointment of trusted advisers)
Comply with all relevant laws and regulations; and
Carry adequate and appropriate insurance
WHAT IS MEANT BY
“PROPER BOOKS OF ACCOUNTS”?
Section 130 of the Charities Act 2011 (or the relevant section of the Companies Act 2006 for incorporated charities) requires accounting records to identify and explain a charity’s transactions, to disclose at any time, with reasonable accuracy, the nancial position of the charity at that time and to enable annual accounts to be prepared. The records must show details of all monies received and all monies expended as well as the assets and the liabilities of the charity.
In the case of a religious institute charity, the records apply not simply to the provincial fund but to the entire institute including individual communities and to members who live alone.
While a few of the smaller religious institute charities may continue to maintain manual accounting records, most will now use computerised accounting packages at provincial fund level - such as Sage, Xero, and so on. At community level records will vary between manual, Excel spreadsheets and the use of similar packages as those used at provincial fund level.
At its most basic, the charity should contain records of all transactions that pass through its bank accounts analysing the transactions between speci c
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