Examination of accounts

• If you need a hand preparing a financial report to present to your AGM or send with a funding application…
• If you want some reassurance that you are keeping the books properly…
• If you’ve taken on the role of treasurer, but can’t make head nor tail of the records you’ve inherited…
• If your constitution says you need to have the accounts externally scrutinised each year…

…you might benefit from an examination of your accounts.

What exactly is an examination of accounts?

If your group's accounts are going to be examined, you need to give the examiner all the paperwork for the year (or whatever period the examination will cover). They will look through it and may contact you to ask about anything that is not clear. They will return the books and papers to you with a written statement that summarises the accounts.

An examination must be carried out by a competent person who is independent of the group. They do not have to be a qualified accountant. If your group is a registered charity, the independent examination should be done by a member of an approved body, such as the Association of Charity Independent Examiners (ACIE).  Two members of staff at the Resource Centre are ACIE members.

The examiner will check:

• whether accounting records have been kept as required and the accounts accord with those records
• whether they have come across a matter in the course of their examination which they believe it is appropriate to report
• (if the group is a registered charity) whether the format of the accounts is in accordance with the Regulations and where appropriate is consistent with the Charity Commission's Statement Of Recommended Practice

How long will it take?

The length of time it takes to complete an examination depends on how complicated the accounts are, how clearly the records and paperwork have been kept, and how fully the information is given to us. When we have had an initial look at the account books, we will be able to give you a better idea of how long it will take. As a rough guide, we advise groups to allow at least four weeks between bringing the books in and getting them back.

If you have a deadline (for example, an AGM), please let us know when it is, and we will do our best to get your books back to you in time. We cannot guarantee to complete an examination in less than four weeks, however.

Does it cost money?

If you are a small group (that is, a not-for-profit group with an annual income below £35,000) based in Brighton & Hove, you can get a free examination of accounts, thanks to funding from the Big Lottery Fund for the Money in Mind project.

For groups that are based in areas of social housing, ethnic minority community groups, and disabled people’s groups, examinations are carried out by staff at the Resource Centre. Please contact us to book in your accounts for examination.

For other small groups, examinations are carried out by Impact Initiatives. Call 322944 to book in your accounts.

If your group is not eligible for free support from the Money in Mind project, see this list of local suppliers of Independent examination of accounts.

What you need to bring

For us to be able to properly examine your accounts, and produce a sheet that we certify is a fair reflection of your records, we need to see the following:

Background information about your group (only if we haven't examined your accounts before)

If we are examining your accounts for the first time, we need to see

• your Constitution
• your annual accounts for the previous year
• your charity number if you are a registered charity

Accounts books

Your written record of what has been received and spent. This might be an account book, a folder, loose sheets, or a computer file, but it should contain a list of all monies in and out. We need to see all the books you have used to keep track of your money - remember your petty cash book, if you have one, or any notebooks dealing with floats or money held by other people.

Bank information

Your bank or building society records. Your bank statements or building society book, plus any cheque books and paying in books. These must cover the whole period, and not just the final month. We can photocopy the relevant part of these if you need to take them away with you.

Details of what cash you have

Information about how much cash your group has that is not in the bank. This should include, for example, any petty cash held by the treasurer and any floats or other cash held by other members of the group. You need to bring this with you to be counted at the Resource Centre, or bring written confirmation from two other committee members that they have seen and counted it.

Receipts

Receipts for money you have spent. Where the group is paying part of an individual’s phone bill we need to see the phone bill, plus a note giving details of what is being paid by the group.

Income details

Paperwork for money received. If you have a grant from the Council, for example, we need to see the letter saying it has been paid into the account and detailing any conditions for use of the grant.

Details of Assets

If your group owns equipment (valuable items only), fixtures & fittings in premises or the building itself, we have to show this in your annual accounts. We need to know the value of these items when your accounts were last examined and the rate of depreciation which you use – this information should be in your annual accounts for the previous year.

Are you a charity?

If you are a charity, it is very helpful if you can let us know which funding is restricted (ie it has conditions that you have to spend it in a very specific way) and what things it was spent on.

Don’t Panic!

We know that things get lost, that people can forget to get receipts, and that books sometimes get into a muddle. We don’t expect everything to be perfect, and will do our best to help sort out any problems.

An examination of accounts can be an opportunity for your group to get additional one to one support or training to help with managing money in the future.