After careful consideration the LEAN Board have decided to opt for an Independent Examination in place of an Audit.
Members or grant funders are invited to raise any questions with members of the Board or the Treasurer (David Williams) by contacting finance@leanarts.org.uk
Posted: 10/03/2022
LEAN
Members and Stakeholders
The
auditors have advised us that their fee for a full audit of our accounts for
2018-19 will cost £3,000. This is a reasonable price for the effort and
skill required, but represents a significant increase on last year (£1,800) at
a time when our funds are tight. With the additional pressure this year
of paying for necessary upgrades to the website, and other concerns, the Board
decided to consider whether an appropriate alternative might provide the
required level of independent scrutiny and assurance to members.
Legal
Background
As
a registered charity earning more than £25,000 a year, we are obliged by law to
have our accounts reviewed by a person independent of the charitys
organisation. This can take the form of
an Audit or an Independent Examination.
An
Audit must be conducted by a qualified professional, and considers the systems,
governance practices, transactions and accounts of the business. Charities with more than £3.25m of assets, or
with annual turnover of more than £1m, MUST have an Audit.
An
Independent Examination means an Accountant (Auditor if turnover above
£250,000) independent of the charity reviews the financial records and accounts
for consistency with each other and with verifiable financial facts (e.g, bank
statements). No opinion is required on
the quality of internal financial and operational controls unless the review
indicates a specific failing. An Independent Examination takes less time
than a full audit, and more of the work can be carried out by persons who are
not qualified auditors (therefore cheaper). Our current firm of auditors
have quoted a fee of £1500 for an Independent Examination.
LEAN Board 8th
July 2019
The Board
met in July, and considered the following:
– The
Charity Commission requires only that we comply with the assurance standard
appropriate to our financial risk – so we must at least have an Independent
Examination;
– None
of our funders currently requires a statutory audit of LEAN, or of their
projects, in their grant contracts with us;
– The impact
on LEAN staff could be reduced, as an Examiner does not need to undertake as
detailed a review of contracts, meeting minutes etc. as would be required in an
Audit; and
– It
would save us £1500.
Board decision,
to be ratified at the Annual General Meeting
The
Board concluded that it would be sensible to opt now for an Independent
Examination in place of an Audit.
The
Board has also formally tasked the Treasurer to conduct a detailed review of LEANs
financial procedures similar to that which would otherwise be undertaken by
an external auditor and to report on this to the Board. In this way, the assurance which might be provided
by an audit should be maintained, but at lower overall cost to the organisation.
The
form of independent assurance to be obtained in future years will be the proposed
for debate at the next Annual General Meeting.
In the meantime, members or grant funders are invited to raise any
concerns with members of the Board or the Treasurer (David Williams) by contacting
finance@leanarts.org.uk
David
Williams
Board Member (Treasurer)
