OSCR drew on the regulatory work it has carried out
Scotland’s charity regulator has published a new ‘lessons learned’ report highlighting the importance of good financial record keeping for charities.
The OSCR report draws on findings from our regulatory work and outlines common issues that can arise when accounting records are incomplete, inaccessible or not maintained in a way that reflects charity accounting requirements.
Keeping accurate and up-to-date financial records is a legal requirement for Scottish charities and helps trustees understand their charity’s financial position, oversee the use of funds and demonstrate that charitable resources have been properly managed.
The report highlights several key lessons for charities, including:
- Charities should keep accounting records that are appropriate to the size and complexity of the charity and its transactions.
- Keep the charity’s accounting records up to date.
- Do not just rely on accounting software for record keeping.
- Ensure responsibility for the charity’s finances does not rest with one person.
The report states: “Good financial record keeping is essential to effective charity governance. It enables trustees to understand the charity’s financial position, monitor the use of funds, meet their legal duties, and prepare accounts that comply with charity accounting requirements.
“Where records are accurate, up to date and accessible, trustees are better able to identify risks, make informed decisions and demonstrate that charitable funds have been properly managed.”
