CC8 – Internal financial controls for Charities update

Published by Sam Rouse on 8 November 2023

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In late Spring 2023, the Charity Commission published its updated guidance for charities, called CC8, about internal financial controls. 

The main purpose of this guidance was to help charities to keep up, with a world become evermore digitalised, as well as serving as timely reminder to trustees, that internal financial controls are key tools for use in protecting their charity and the resources of that charity. 

Whilst much of the guidance remains unchanged, there are some developments to be aware of. 

What are the main changes?

The most significant change is actually a fairly simple one: the guidance has been restructured, and the language simplified, in order for trustees to more easily understand that which is being asked of them. 

There have also been a small number of new sections added, to reflect the change to online operating systems, which give guidance around: 

  • The use of mobile payment systems, 
  • Accepting gifts and hospitality, and 
  • Accepting donations of crypto assets. 

What else does the guidance cover? 

For reference, the guidance also covers: 

  • Risks of fraud. 
  • Public collections. 
  • Fundraising. 
  • Receiving donations online. 
  • Staff costs controls. 
  • Reimbursements of expenses. 
  • Making loans, and 
  • Various other matters. 

What is the importance of these changes? 

Trustees are legally required to responsibly manage their charity’s resources and ensure accountability at all times.  Whilst certain functions can be delegated, to management, the ultimate responsibility falls upon the trustees shoulders.  It is therefore crucial that clear and robust financial controls are designed and implemented, to ensure efficiency and effectiveness, giving the charity’s assets the vital protection they need from both internal and external risk factors. 

Trustees should therefore ensure that they have thoroughly read, scrutinised, and understood the guidance.  It can be used, in conjunction with the new accompanying internal financial controls checklist, to identify where clear gaps and weaknesses may exist within their existing processes, thus providing an action planning opportunity about how to improve moving forwards. 

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