Financial management during COVID-19
Richard Sagar
Policy Manager
Charity Finance Group
policy@cfg.org.uk

Funding for the charity sector
https://www.gov.uk/guidance/financial-support-for-voluntary-
community-and-social-enterprise-vcse-organisations-to-respond-to-
coronavirus-covid-19

Coronavirus Community Support
Fund - £200 million
https://www.tnlcommunityfund.org.uk/fundin
g/covid-19/learn-about-applying-for-
emergency-funding-in-england

Coronavirus Support Finder
https://www.gov.uk/business-coronavirus-support-finder

Covid-19 update webinar, co-hosted by NCVO and CFG
Update from the Commission
27 May 2020
Nigel Davies, Assistant Director Accountancy Services

Charity Commission COVID-19 update
In these uncertain and challenging circumstances the Commission looks to be as
supportive as we can be and to play our part in assisting the charity sector.
Through this time the Commission continues to be ‘open for business’
• Look firstly at where we can help
• Secondly consider relevant advice and guidance
• Close with developments in hand

Where we can help

Charity filing - Flexibility in our handling of late filing
The disruption due to controls on travel and face to face meetings will affect the
preparation and approval of charity annual reports and accounts, and the external
scrutiny of them. Charity law provides for the 10 month filing period and we have no
discretion:
• Talk to us as soon as you identify a problem
• E-mail direct to the dedicated team: filingextension@charitycommission.gov.uk
giving charity name and registration number and we will see how we can
accommodate delayed filing

Hosting your AGM and trustee meetings electronically
• Some charities have clauses in their
governing documents that allow
them to meet virtually or to use
telephone facilities.
• This is particularly important if not
holding your AGM may make it
difficult for you to finalise your
annual reports and accounts.
• If not, check your governing
document and see if you can
make amendments to facilitate
changes as to how or when
meetings are held.
• Where there is no such clause in
your governing document and
you decide to hold meetings
over the phone or using digital
solutions, we will understand
but you should record this
decision and that you have
done this to demonstrate good
governance of your charity.

Charity Objects and restricted funds - Understanding if you can help with
the Covid-19 efforts
Lots of charities are considering whether they can help the effort to tackle COVID-19
and its severe impact on people right across the country
• You first need to understand your charities existing charitable objects as set out in your
governing document and the structure of your charity’s funds
• Charities with non related objects may still be able to support the Covid-19 response
• Understand restrictions against your charities objects. For example, serving a particular
region
• You may be able to adapt or change your objectives as long as they are reasonable- in
certain circumstances we can assist

Our advice and guidance

Charity Commission guidance:
 Dedicated page: https://www.gov.uk/guidance/coronavirus-
covid-19-guidance-for-the-charity-sector
 12 topics currently covered, including:
Amending objects
Use of reserves
Flexible approach to late filing
On-line AGMS and meetings
Reminder to report serious incidents including on-line
fraud and financial difficulty
Safeguarding
Working with non-charities

Keeping people safe and reporting serious incidents
Reporting Serious Incidents
Keeping people safe
• It is ultimately the responsibility of the charity trustees to continue to report serious
incidents using our current guidelines, and we will continue to ask trustees to use their
judgement in deciding whether an incident is significant in the context of their charity and
should be reported to us.
• It’s important that during this pandemic we continue to take care of our most vulnerable
people, we ask anyone with concerns about someone in a charitable environment to review
our safeguarding guidelines and take the necessary steps to inform the Commission of your
concerns.

Working with a company or business to help with Covid-19 efforts.
Charities can work with non-charitable companies or businesses in a number of ways.
For example, you could:
• Provide a service or run a project together
• Have staff seconded or volunteering for your organisation
• Enter into a commercial partnership to raise funds (for example, a company donates a percentage of sales
and uses your charity’s name on their promotional material)
You should:
• Make sure that linking with a business for this purpose is in your charity’s best interests and that your
trustees support it
• Ensure that any activities you carry out fit with your charity’s purposes
• Identify, address, and review risks as well as benefits
• Consider any conflicts of interest or risks to your charity’s reputation

Charity Commission guidance:
 Other updates on our site for:
Guidance for examiners to carry out an independent
examination:
https://www.gov.uk/government/publications/independent-
examination-of-charity-accounts-examiners-cc32
Updated guidance for auditors and examiners on
reporting matters of material significance:
https://www.gov.uk/government/publications/guidance-
for-auditors-and-independent-examiners-of-charities

Financial planning during Covid-19
Reserves can be spent to help cope with unexpected events arising from the Covid-19
outbreak
Trustees are encouraged to think about the spend, projects and charity activities that
can be stopped or delayed in order to focus on essential spending
You should identify which of your funds or assets have limits on their use and
investigate if you are able to reprioritise this funding
Further guidance can be found on the Charity Commission Coronavirus (Covid-19):
Guidance and Support page on GOV.UK

Developments in hand

Charity Commission guidance:
 Updates in train for:
Serious incident reporting
Updating CC40 Charity emergency appeals: starting,
running and supporting charitable emergency appeals
CC8 Internal Financial Controls guidance
Fraud alerts:
https://www.gov.uk/government/news/coronavirus-covid-
19-increased-risk-of-fraud-and-cybercrime-against-
charities

Gov.uk/charity-commission
0300 066 9197
Charity Commission for England and Wales
@Chtycommission
Contact us

Coronavirus: financial
reporting issues for charities
CFG/NCVO webinar 27 May 2020
Naziar Hashemi

© 2019 Crowe U.K. LLP | Confidential | 2© 2020 Crowe U.K. LLP
Entitlement, Probability and Measurement
The impact of coronavirus may require further consideration of these criteria for their
different sources of income.
• Coronavirus Job Retention Scheme – eligibility criteria, match with salary cost
• Events – cancelled or postponed? Cancellation policy, conversion into donation
• Donations and grants – likelihood of receipt,
• Contracts – performance conditions, no cost extensions
• Legacies – valuation, timing
See FAQs on Income recognition https://www.crowe.com/uk/croweuk/insights/sorp-
2015-income-recognition
Income recognition

© 2019 Crowe U.K. LLP | Confidential | 3
• Legal vs constructive obligations
• Leases and onerous contracts
• Pension liabilities
• Gift Aid payments from subsidiaries
• Finance covenants
Think about
Commitments & liabilities
• Tangible and intangible fixed assets
• Investments
• Stock
• Debtors
Valuations & Impairments
https://www.crowe.com/uk/croweuk/insights/covid-19-financial-reporting-charities

© 2019 Crowe U.K. LLP | Confidential | 4© 2020 Crowe U.K. LLP
• An entity is a going concern unless the Trustees intend that the charity will cease its
activities, or has no realistic alternative but to do so. In assessing whether the going
concern assumption is appropriate, the Trustees are required to take into account all
available information about the future, which is at least, but is not limited to, twelve
months from the date when the financial statements are authorised for issue.
• The Trustees’ assessment on ability to continue as a going concern is likely to be a
key area of emphasis for boards and auditors
• The Financial Reporting Council thinks it is likely that more companies will disclose
‘material uncertainties’ to going concern in current circumstances.
Going Concern
https://www.crowe.com/uk/croweuk/insights/covid-19-financial-reporting-charities

© 2019 Crowe U.K. LLP | Confidential | 5© 2020 Crowe U.K. LLP
• Discussion of key impact of COVID-19
• Financial review and risks
• Reserves policy
• Going Concern
• Future plans
• Post balance sheet events
• As up to date as possible
Trustees’ annual report
https://www.crowe.com/uk/croweuk/insights/covid-19-financial-reporting-charities

© 2019 Crowe U.K. LLP | Confidential | 6
Uncertain future with many possible impacts
1. Liquidity, cash and reserves management
2. Strategy & scenario planning
3. Governance & decision making
4. Risk management
5. Structures, operations and business models
See: https://www.crowe.com/uk/croweuk/insights/non-profits-
managing-in-uncertain-times
Survive
Adapt
Collaborate
Plan for
success

© 2019 Crowe U.K. LLP | Confidential | 7
Link cash management with risk management & forecasting
process
Rethink reserves – Why are these held? What is the appropriate
level? How should it be used?
Think about the NOW and the FUTURE
Liquidity and reserves
How are cash requirements going to be managed.
Are funds going to be obtained by borrowing, selling investments
or drawing down on cash balances, cutting / deferring
expenditure?

© 2019 Crowe U.K. LLP | Confidential | 8
The strategy must be able to deal
with uncertainty
Predicting the probable is difficult
Develop tactics on the premise that
several different outcomes are
possible
Strategic thinking