{"id":665,"date":"2016-11-01T12:45:09","date_gmt":"2016-11-01T12:45:09","guid":{"rendered":"https:\/\/goodgovernanceawards.ie\/?p=665"},"modified":"2016-11-01T14:24:26","modified_gmt":"2016-11-01T14:24:26","slug":"good-governance-presentation-laura-anderson","status":"publish","type":"post","link":"https:\/\/goodgovernanceawards.ie\/good-governance-presentation-laura-anderson\/","title":{"rendered":"Good Governance Presentation by Laura Anderson"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_one_full-d95256448b25db1777b304ca7821116b\">\n.flex_column.av-av_one_full-d95256448b25db1777b304ca7821116b{\n-webkit-border-radius:0px 0px 0px 0px;\n-moz-border-radius:0px 0px 0px 0px;\nborder-radius:0px 0px 0px 0px;\npadding:30px 30px 30px 30px;\nbackground-color:#ffffff;\n}\n<\/style>\n<div class='flex_column av-av_one_full-d95256448b25db1777b304ca7821116b av_one_full  avia-builder-el-0  avia-builder-el-no-sibling  first flex_column_div '     ><p>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_image-9bcea3934cba6f8f883d8eff6d9e0684\">\n.avia-image-container.av-av_image-9bcea3934cba6f8f883d8eff6d9e0684 img.avia_image{\nbox-shadow:none;\n}\n.avia-image-container.av-av_image-9bcea3934cba6f8f883d8eff6d9e0684 .av-image-caption-overlay-center{\ncolor:#ffffff;\n}\n<\/style>\n<div  class='avia-image-container av-av_image-9bcea3934cba6f8f883d8eff6d9e0684 av-styling- avia-align-center  avia-builder-el-1  el_before_av_textblock  avia-builder-el-first '   itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\" ><div class=\"avia-image-container-inner\"><div class=\"avia-image-overlay-wrap\"><img decoding=\"async\" class='wp-image-675 avia-img-lazy-loading-not-675 avia_image ' src=\"https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson-1030x605.jpg\" alt='' title='laura-anderson'  height=\"605\" width=\"1030\"  itemprop=\"thumbnailUrl\" srcset=\"https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson-1030x605.jpg 1030w, https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson-300x176.jpg 300w, https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson-768x451.jpg 768w, https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson-705x414.jpg 705w, https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson-450x264.jpg 450w, https:\/\/goodgovernanceawards.ie\/wp-content\/uploads\/2016\/11\/Laura-Anderson.jpg 1200w\" sizes=\"(max-width: 1030px) 100vw, 1030px\" \/><\/div><\/div><\/div><br \/>\n<section  class='av_textblock_section av-av_textblock-35972167d9f102c5ddaec0c531c98b9e'  itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><p class=\"p1\" style=\"text-align: justify;\"><b>Good governance awards \u2013 presentation by Laura Anderson of the Scottish Charity Regulator (OSCR)<\/b><\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Reflecting on the current status of charity regulation here in Ireland, I thought it perhaps appropriate to share with you the experience of charity regulation in Scotland over the first decade of OSCR\u2019s existence as we celebrated our 10<sup>th<\/sup> birthday in April this year.<span class=\"Apple-converted-space\">\u00a0 <\/span>In particular I\u2019ll provide some reflections relating to accounting and annual reporting and then finish with my own thoughts about good governance.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Right from the establishment of OSCR, we have recognised the huge importance of good annual reporting \u2013 not just financial reporting but also narrative reporting as it\u2019s often the words that make the numbers come to life.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">In the first 10 years of regulation, we committed a huge amount of our resources to improving the quality of accounts that Scottish charities produce.<span class=\"Apple-converted-space\">\u00a0 <\/span>Let me just provide a bit of context as to the sector that we are talking about here &#8211; there are approximately 24,000 charities in Scotland and the regulatory regime is fairly simple \u2013 every charity has to be registered with OSCR regardless of its size, charitable purpose or activity and we think that is a key way in which public trust and confidence in the Scottish charitable sector is maintained because it is clear for all to see when looking at the Scottish Charity Register who is and who isn\u2019t a charity.<span class=\"Apple-converted-space\">\u00a0 <\/span>In terms of composition, 60% of the sector have income of less than \u00a325,000.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">When regulations were introduced in 2006 these required all charities to prepare annual accounts and submit these to OSCR \u2013 again with no exceptions. <span class=\"Apple-converted-space\">\u00a0 <\/span>Charities in Scotland actually had a legal obligation to prepare accounts in a recognised format since 1992 but the reality was that those that did so were unfortunately in the minority.<span class=\"Apple-converted-space\">\u00a0 <\/span>However, when it became a legal requirement for all charities to file accounts annually with OSCR, we were frankly shocked by some of what we received which included bank statements, copies of cashbooks and in some cases big old-fashioned ledger books that recorded every single transaction in weird and wonderful ways.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">The requirements for charity accounts in Scotland are, we think, proportionate to the shape and size of charities and for small charities in particular seek to minimise any particular regulatory burden that may be perceived when thinking about preparing accounts.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Charities with an income of less than \u00a3250,000 are eligible to prepare receipts and payments accounts which are simple, cash-based accounts.<span class=\"Apple-converted-space\">\u00a0 <\/span>In essence the financial reporting shows money coming into and going out of the charity and lists the assets and liabilities that the charity has. The narrative part of reporting includes details of those acting as trustees and the charity\u2019s governing document as well as an explanation of the charity\u2019s activities and how these relate to the charity\u2019s purposes.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">For larger charities plus all charities that are also a company, the Charities Statement of Recommended Practice or SORP must be followed which sets out the methods and principles for both qualitative and quantitative reporting.<span class=\"Apple-converted-space\">\u00a0 <\/span>We are of course talking about accruals accounting here \u2013 so taking account of timing differences in transactions that cross the year end date for instance.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">The SORP is there to try to make sense of accounting standards for the charity sector because some of the really key transactions that charities enter into are not adequately addressed in accounting standards which are developed primarily for the commercial sector.<span class=\"Apple-converted-space\">\u00a0 <\/span>OSCR and the Charity Commission for England and Wales are the body that is recognised by the Financial Reporting Council as having responsibility for the development and maintenance of the Charities SORP.<span class=\"Apple-converted-space\">\u00a0 <\/span>Of course we don\u2019t work alone but instead we have a Committee which comprises representatives from across the UK and Ireland and includes both finance and non-finance professionals to ensure we have robust and well-rounded discussions and take account of the whole sector and the diverse range of users of charity accounts when making decisions.<span class=\"Apple-converted-space\">\u00a0 \u00a0<\/span><\/p>\n<p class=\"p1\" style=\"text-align: justify;\">The SORP brings consistency in reporting, ensuring transactions are treated appropriately and the format of accounts makes sense for charities.<span class=\"Apple-converted-space\">\u00a0 <\/span>There can be no doubt that having the SORP legally underpinning the accounts of charitable companies and larger charities is a huge asset to our sector.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">I mentioned earlier about the significant resource commitment OSCR made to improving the quality of accounts in the early years. <span class=\"Apple-converted-space\">\u00a0 <\/span>We decided early on that as reporting is such a key part of transparency for Scottish charities, we needed to consider all submissions to understand the quality, the common problems and what we could do to help.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">So you may find this hard to believe but we did look at every set of accounts that were filed with us up to the start of 2016.<span class=\"Apple-converted-space\">\u00a0 <\/span>Each one was assessed to determine whether the basic component elements were included \u2013 for example the Trustees\u2019 annual report, the required financial statements, a report from an auditor or independent examiner etc.<span class=\"Apple-converted-space\">\u00a0 <\/span>Where there were deficiencies, these were explained to the charity with a request to address these in the subsequent year.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">We also did some detailed studies looking at the accounts of smaller charities in 2007, 2008 and 2009 in order to assess levels of compliance and how these were developing.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">In 2007 for example, compliance levels were very poor \u2013 only a third of the charities sampled included a trustees\u2019 annual report within their accounts.<span class=\"Apple-converted-space\">\u00a0 <\/span>This improved to two thirds in 2008. <span class=\"Apple-converted-space\">\u00a0 <\/span>The format of accounts was also a major issue with many charities still using old style formats in 2008 and in terms of key items of disclosure, 90% of charities failed to disclose any information relating to trustee remuneration or expenses in 2007, reducing to 62% in 2008.<span class=\"Apple-converted-space\">\u00a0 <\/span>Although there were some further improvements in 2009, it was clear from all our activities at this point that charities were not getting the message for some reason as the same mistakes were being repeated and we even heard some horror stories about charities who had received our letter thanking them for their submission but highlighting the problem areas being posted on the charity\u2019s notice board as a sign of achievement!<span class=\"Apple-converted-space\">\u00a0 <\/span>Clearly we needed to change our approach. So we got tough and rejected accounts where there were fundamental problems with the financial statements and we gave charities 60 days to make amendments and resubmit to us. Fortunately that did have a good impact and in the 2015-16 business year 80% of charities filed accounts that included all the basic elements required by law.<span class=\"Apple-converted-space\">\u00a0 <\/span>A further 10% filed accounts but still with some room for improvement, however it is clear that the Scottish sector has travelled a long way along the road to achieving high quality financial reporting and I think this is a key contributory factor to the maintenance of good levels of trust in the sector by the Scottish public. In our recently published survey results, it was interesting to note that 54% of the public surveyed said their trust in charities had not changed over the last 2 years and indeed 8% said their trust had increased \u2013 I think this is really worthy of note bearing in mind the criticism that has been levied on the sector by the media in particular over the past year owing to events and practices by a very small number of charities in relation to the size of the sector overall.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">So let\u2019s turn our focus to the main thrust of this evening &#8211; good governance.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Good governance for me starts with commitment, passion and a true desire to do the best you can.<span class=\"Apple-converted-space\">\u00a0 <\/span>In this room here tonight, we have this in abundance and the nominees in each of the categories have more of this than some charities could ever imagine.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">It\u2019s sad but true to say that in the time since I joined OSCR just over 9 years ago and took up my role as Head of Enforcement 7 years ago, I have seen some pretty poor examples of governance<span class=\"Apple-converted-space\">\u00a0 <\/span>&#8211; trustees that didn\u2019t understand they were trustees let alone their responsibilities, boards who could barely agree what day to hold a meeting let alone what they should discuss and action at it and others who seemed to think that the best thing to do at a Board meeting was to score points off each other instead of really thinking about why they were there in the first place.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">In my experience, people become charity trustees because they have a belief in what that charity is set up to do, a desire to help others \u2013 let\u2019s be honest, being a trustee is sometimes not an easy job and unless you really have that strong belief and desire, you are not going to put yourself in that position.<span class=\"Apple-converted-space\">\u00a0 <\/span>But when trustees really focus on why they became involved in the first place, that\u2019s when the magic can happen!<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Good governance in charities starts from this point \u2013 having a clear focus on what the charity is about \u2013 its objectives.<span class=\"Apple-converted-space\">\u00a0 <\/span>I\u2019ve almost lost count of the number of boards that I\u2019ve come into contact with that seem to have lost sight of what the objectives of their organisation are and when you don\u2019t have a clear cohesive understanding of this, generally a trustee board cannot effectively run the organisation. They cannot make plans for activities to further the objectives as they are required to do and may drift off in a direction that isn\u2019t appropriate for the charity and most likely is outwith the powers that they have under the charity\u2019s governing document.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">When a trustee board clearly understands the objectives of the charity and can plan activities to further those objectives it can often be a lot easier for them to achieve real excellence in annual reporting \u2013 both financial and narrative \u2013 because everything that happens in the organisation flows from the objectives and there is true coherence in everything that the charity does \u2013 in short it all makes sense.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">And when it all makes sense, it\u2019s a lot easier to show and tell others the story of the charity which brings me onto my main hobby horse and one of the things that I have spoken to trustees about consistently over the last decade \u2013 the importance of the Trustees\u2019 Annual Report for a charity.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Often I think that the trustees annual report is something that trustees don\u2019t engage with because they think that it\u2019s something complex, difficult and just to do with the accounts so they probably won\u2019t understand it if they aren\u2019t finance professionals. <span class=\"Apple-converted-space\">\u00a0 <\/span>In fact this couldn\u2019t be further from the truth.<span class=\"Apple-converted-space\">\u00a0 <\/span>The trustees annual report is really just the story of the charity and what it has been doing during the year, what it has achieved and what it plans to do going forward \u2013 in all honesty does that really sound that hard?<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">And yet many, many trustee boards seem to find it incredibly hard or don\u2019t have a desire to try to get it right.<span class=\"Apple-converted-space\">\u00a0 <\/span>The perception is often that accounts are just about numbers and I\u2019d like to let you into a little secret \u2013 they aren\u2019t!<span class=\"Apple-converted-space\">\u00a0 <\/span>In some ways I feel a bit of a traitor saying that when I\u2019m a chartered accountant but I almost feel it is my duty to be clear about this \u2013 numbers are not the only thing that is important in a set of charity accounts which is why we really should use their proper title \u2013 the annual report and accounts.<span class=\"Apple-converted-space\">\u00a0 <\/span>Good narrative reporting is what I am constantly hoping more and more charities come to appreciate the value of and really try to achieve for themselves.<span class=\"Apple-converted-space\">\u00a0 <\/span>There is no one size fits all \u2013 of course there are legal requirements that each charity has to meet in terms of what should be included but in terms of how information is presented, the language used etc, it\u2019s up to the charity to choose what works best, bearing in mind the potentially diverse set of users of charity accounts.<span class=\"Apple-converted-space\">\u00a0 <\/span>Ultimately I find it easiest to think of the annual report as being the trustees\u2019 opportunity to tell the story of their charity \u2013 to shout it from the roof tops and be proud of what their charity has managed to achieve in the year.<span class=\"Apple-converted-space\">\u00a0 <\/span>The passion that led them to be involved with the charity in the first place can spill out here into communication that is informative, interesting and inspiring.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">I am immensely proud to have been invited here this evening and to have the opportunity to share some of my experiences with you.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">Tonight\u2019s awards celebrate fantastic examples of good reporting and our nominees truly have the gift of good governance in this respect which I\u2019m sure the rest of the sector in Ireland will be able to look at, learn from and replicate the good example shown.<span class=\"Apple-converted-space\">\u00a0 <\/span>Yes the sector is going through some tough challenges right now, yes it takes hard work and some blood sweat and tears to do the job well but it is worth it \u2013 having a sector that you are proud of is surely worth fighting for.<\/p>\n<p class=\"p1\" style=\"text-align: justify;\">I look forward to continuing to work with colleagues in the sector here as you travel on the journey you find yourselves on at the moment \u2013 a sector with high ambitions for itself, a new Regulator establishing itself in earnest and consulting on reporting requirements and above all passion and commitment to high levels of transparency, accountability and good governance.<\/p>\n<\/div><\/section><\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Good governance awards \u2013 presentation by Laura Anderson of the Scottish Charity Regulator (OSCR)<br \/>\nReflecting on the current status of charity regulation here in Ireland, I thought it perhaps appropriate to share with you the experience of charity regulation in Scotland over the first decade of OSCR\u2019s existence as we celebrated our 10th birthday in April this year.<\/p>\n","protected":false},"author":1,"featured_media":675,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,7],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Good Governance Presentation by Laura Anderson - Good Governance Awards<\/title>\n<meta name=\"description\" content=\"Good governance awards \u2013 presentation by Laura Anderson of the Scottish Charity Regulator (OSCR).\" \/>\n<meta name=\"robots\" content=\"index, follow, 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