The Charities Statement of Recommended Practice (SORP) was introduced to provide guidance for preparers of charity financial accounts on the application of Financial Reporting Standards. As such, charities which were required, or chose, to prepare accounts that give a ‘true and fair’ view had a framework that they had to follow. Subsequent to the 1995 SORP, new SORPs were issued in 2000 and 2005 with the latter being adopted in Scotland in 2006. The latest SORP took effect in 2015, with some updates in 2019, and was subsequently adopted in Northern Ireland. It is also under consideration in the Republic of Ireland, with charities there able to volunteer to adopt it if they so wish.
The SORP provides an opportunity for trustees to set out how they have performed in fulfilling the charitable purposes of the organisation, as well as detailing how resources have been utilised. It, therefore, combines technical aspects of financial accounting and annual narrative reporting by trustees (in the Trustees’ Annual Report). The annual report and accounts provide information about charities, supporting transparency and accountability, and promoting confidence in the charity sector.
The SORP is developed by the SORP-Making Body (the charity regulators of England and Wales, Scotland, and Northern Ireland with the Republic of Ireland an observer) and approved by the Financial Reporting Council. Following a review of the governance of the SORP-Making Body, it undertook to engage more broadly with those that use the SORP. Six engagement strands were established to support the development of the next SORP. The six strands are:
The Chartered Governance Institute was appointed the Convenor for the Trustee Engagement Strand,
trustees being a group which it has been difficult for the SORP-Making Body to engage in previous SORP consultations. The work of the strand will cover:
Each strand is free to develop their own work plans and priorities in the three years scheduled for the review.
As part of its scoping work, the Trustee Engagement Strand is seeking the help of trustees to understand their:
The questionnaire is aimed primarily at existing or recently retired trustees of charities registered or operating in Wales, Scotland, the Republic of Ireland, Northern Ireland and England. It shouldn’t take long to complete, but the experience of trustees could help to fundamentally change future SORPs to make them fit for purpose for the charities it covers.
The survey can be completed anonymously at www.surveymonkey.co.uk/r/93T2K76 until 7 December 2020, and we urge governance professionals to share this information with their trustees and encourage them to complete the survey.
The Trustee Engagement Strand will be adding summaries of its activities on its part of the SORP website: www.charitysorp.org/about-the-sorp/engage/engagement-strand-membership-trustees/, so anyone with an interest can follow its work there, or directly contact Louise Thomson at the Institute.