The UK’s three independent regulators of charities (Charity Commission for England and Wales, Office of the Scottish Charity Regulator and Charity Commission for Northern Ireland) have issued an alert to charities. This alert is to advise that the regulated financial sector should be used by charities.
Financial regulation applies to charities when they move, use, receive or simply hold money and there is more scrutiny when moving funds internationally.
A good way to start showing compliance is to have at least one bank account in the charity’s name in a regulated banking system. Trustees need to be able to use this bank account to receive and pay out funds.
If the charity does not have a bank account this creates additional obligations on the trustees to show compliance, ensuring necessary records of income and expenditure are held. If cash is to be used the trustees need to be able to show why cash is reasonable in the circumstances.
The commission’s alert can be viewed here.