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Reporting of trustees’ expenses in Annual Accounts and controls over expenses

The Independent Expert Group issued a report on expenses which highlighted the importance of good internal control procedures on the payment of expenses to trustees, staff and volunteers. It also provided a timely reminder of the importance of meeting the Statement of Recommended Practice (SORP) disclosure requirements for trustees’ expenses in the statutory accounts.

Items to be included in trustees’ expenses

These are refunds to trustees for costs incurred by them personally in order to carry out trustee duties. A refund of properly incurred expenses is not a trustee payment, nor is it a personal benefit.

Disclosure in statutory accounts

The notes must include the total amount of trustees’ expenses in the year and their nature. If none have been claimed this should be stated. There is no requirement in the SORP to provide details of expenses paid to senior staff.

The notes should also include the total number who claimed or incurred expenses during the year.

Additional information on trustees’ expenses that can be provided with the statutory reports and accounts

Additional information, in excess of that required by the SORP, can be added if the trustees’ consider this to be helpful to readers of the accounts.

Controls over the payment of expenses

The Charity Commission recommend that there is a written policy for the payment of expenses. This should ensure that a charity only reimburses legitimate expenses properly incurred on its behalf.  The policy should clarify whether the charity pays expenses for travel, hotel, conference, business, training and out of pocket expenses, and if so, on what terms. The policy should also include the requirement to complete expense claims and to provide receipts. There should be controls to check that only appropriate expenses are reimbursed for all trustees, staff, including the CEO, senior management and volunteers.

P11ds will have to be completed and filed with HMRC for each staff member earning £8,500 or more.

 

 

Date: 27th July, 2010
Author: Wendy Bambrick

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