Like companies (which must have both members and company directors) all Charitable Incorporated Organisations (CIOs) like us must have members and charity trustees.
The Charity Commission has produced two model constitutions for CIOs:
• ‘foundation’ – only voting members will be the charity trustees
• ‘association’ (the one we use) for charities that will have a wider membership, including voting members other than the charity trustees
In practice a CIO using the ‘foundation’ model is like an incorporated charitable trust, run by a small group of people (the charity trustees) who make all key decisions. Charity trustees may be appointed for an unlimited time and they will probably appoint new charity trustees.
As we use the ‘association’ model we can have a wider voting membership who must make certain decisions (such as amending the constitution), will usually appoint some or all of the charity trustees (who will serve for fixed terms), and may be involved in the work of the CIO.
There are not two different forms of CIO. A CIO with the ‘foundation’ model could change to the ‘association’ model if it wanted a wider voting membership. (This could also happen the other way around, but members who were not trustees would be giving up their membership.) Some of the changes would need Charity Commission approval.
Government Rules on the independent examination of charity accounts are here
What statements need to be prepared?
The report and accounts of registered charities preparing receipts and payments accounts will usually consist of FOUR related documents:
THREE are prepared by the trustees:
- A Trustees’ Annual Report – Giving details about the charity’s activities for the public benefit in the year, using the Charity Commission’s notes, template and guidance.
- A Receipts and Payments Account – providing an analysis of the incoming and outgoing cash for the year.
- A Statement of Assets and Liabilities – outlining the charities main assets and liabilities at the end of the year and including the cash balances at the year end shown in the receipts and payments accounts.
ONE document is prepared by either an independent examiner or an auditor.
An audit or independent examination is only required if the charity’s gross income is over £25,000, or if the trustees choose to have an audit or an independent examination.
Most charities preparing receipts and payments accounts choose to have an independent examination of their accounts instead of an audit.