Requirements of the Charities
Act 1993
10. In 1996 a separate and additional accounting
requirement was placed on NHS charities by the entry into force
of Part VI of the Charities Act 1993. NHS charities have always
been required to register for charitable status and submit to
the jurisdiction of the Charity Commissioners. After 1 March 1996
they were no longer exempt from the requirement in charity law
that all permanently endowed charities shall send their accounts
to the Charity Commissioners. NHS charities now fall within the
normal accounts monitoring programme undertaken by the Charity
Commission.
11. In its explanatory statement on the proposal
for the Order, the Department summarised the accounting regime
which applies to all charities under charity law.[7]
This is as follows:
a) If a charity's gross income or its
total expenditure in any one financial year exceeds £10,000,
it must submit accounts to the Charity Commission. But if the
gross income or total expenditure do not exceed £250,000,
the accounts are permitted to be subject to an examination before
submission, rather than to a full audit.
b) Charities with a gross income or total expenditure
of over £250,000 in any one financial year must prepare full
accounts for submission to the Charity Commission, and are subject
to a full audit.
c) If a charity's gross income in any financial
year is £100,000 or less, the charity may elect to prepare
accounts of receipts and payments only, and a statement of assets
and liabilities.
d) If neither a charity's gross income, nor its
total expenditure in any financial year, exceeds £10,000,
it is exempt from any requirement to have its accounts examined
or audited (unless the Charity Commissioners require otherwise),
and it is not required to submit its annual accounts to the Charity
Commissioners, unless requested to do so.
e) The Charity Commissioners conduct routine
monitoring of 'larger charities', and have powers to institute
general inquiries into charities or to carry out inquiries for
specific purposes.
12. The Department further recorded that NHS charity
trustees presently seek a dispensation from the Charity Commission
to allow the audit undertaken by the Audit Commission for the
purposes of section 98 of the 1977 Act to satisfy the audit scrutiny
requirements for accounts submitted to the Charity Commission.
13. The draft Charities Bill, which was introduced
in the House of Lords on 20 December 2004, would make a number
of changes to the present structure of charity law, in the light
of proposals contained in a recent review by the Cabinet Office.[8]
The Government proposes that the present audit threshold of £250,000
should be raised to £500,000. In addition, it is proposed
that the type of accounts to be prepared, and the level of audit
scrutiny, should be determined by an asset threshold as well as
the present income threshold.[9]
14. The House has instructed us to examine the draft
Order against such of the criteria specified in Standing Order
No. 141(6) as are relevant. We are also required to consider
the account which the responsible minister has taken of our report
on the proposal, and of any other representations made during
the period for Parliamentary consideration. Our discussion of
matters arising from our consideration is set out below.
5 
