Accounting & Audit Requirements for Group Districts, Counties/Areas & Scottish Regions
The Association’s guidance has been revised to be more consistent with the charity regulators. However, the Association has a few additional rules which apply to Scout Groups, Districts and Counties/Areas/Regions. These are set out in Appendix 1 and relate to the External Examination of accounts.
This document reflects the Charity Statement of Recommended Practice (SORP), other guidance, and forms part of The Scout Association Policy, Organisation & Rules (POR).
The SORP determines how Charities’ accounts are presented. This includes such areas as the layout of the Statement of Financial Activities and of the Balance Sheet, how to account for charitable activities undertaken, support costs and governance costs. They also determine the contents of the Trustees’ Annual Report for the year. Related specimen reports and accounts, are available on www.scouts.org.uk.
The regulatory and legislative background slightly difference in England & Wales, Scotland and Northern Ireland (The Charity Commission for England & Wales, the Office of the Scottish Charity Regulator (OSCR) and The Charity Commissioner for Northern Ireland). Whilst every effort has been taken to include information from all three regulators, please check the relevant websites for the official regulator guidance documents
Note: Whilst it is a requirement in Northern Ireland that all Groups, Districts and Counties are registered with the Charity Commission for Northern Ireland, in England & Wales and Scotland Groups, Districts, Counties/Areas/Regions do not need to be registered unless certain criteria, set by the relevant regulator, are met. Whether a registered charity or not, the guidance and rules within this factsheet should still be followed except where there is reference to sending items to the regulator.
Type of Accounts
Subject to the rules in POR, the Trustees of each Group, District or County/Area/Region will also have to decide whether they prepare accounts on the Receipts and Payments or the Accruals basis. The relevant rules are included in Appendix 1B and summarised in Appendix 2.
It is important to understand that the law requires accounts to be produced for a charity as a whole and this will be the entire Group, District or County/Area/Region, not individual Sections. The accounts must consolidate all the activities carried on in the name of the Group, District or County/Area/Region. Ensuring that this is done is the responsibility of the Group, District or County/Area/Region Treasurer who may have to obtain information from other people who may keep financial records for individual Sections. POR requires all bank accounts to be in the name of the Group, District or County/Area/Region and that the Treasurer should be a signatory to the bank/other accounts held (POR and the charity regulators require that a minimum of two persons must sign all cheques). Failure to comply with these requirements could prejudice the position of all Trustees as they have a joint responsibility.
It is expected that most Districts and Groups with gross income in the year below £250,000 will choose the Receipts and Payments basis, as explained in Section 4.
If a Group or District had straightforward activities, e.g. it does not operate a Campsite, a Scout Shop or hold regular Gang Shows, it should consider using one of the specimen accounts in producing their annual accounts.
If the accounts of the Group or District are more complex, the specimen accounts may need to be amplified. One way of doing this, without rewriting the whole specimen accounts, would be to insert additional narrative in the Specimen Trustee’s Annual Report and additional sheets in the spreadsheet where these are necessary to include all the information required.
If the Group or District has a subsidiary company or charity or if it has any arrangement under which it shares the running of an activity with another organisation, this must be explained in the accounts. The notes to the accounts should include the terms of the agreement, a summary of the accounts of the joint activity and a note if the auditor or examiner's report has been qualified. It is considered that the specimen Receipts and Payments Accounts formats should be suitable for use by joint Scout/Guide Groups.
Based on historic experience most Counties/Areas/Regions are compelled, or choose, to follow the Accruals Accounts basis. In addition, Districts and Groups with high levels of income or particularly complex operations may opt for the Accruals Accounts basis.
If the Group, District or County/Area/Region has a subsidiary company or charity or if it has any arrangement under which it shares the running of an activity with another organisation, this must be explained in the accounts. An activity would include, e.g. running a building or a campsite. The SORP explains how this should be shown in Accruals Accounts. The Charity Commission for England and Wales and OSCR has detailed guidance on Accrual Accounts and SORP that must be followed. More information can be found online.