In 2021, all charities registered in Ireland must complete their first annual Compliance Record Form to comply with the Charities Regulatory Authority (CRA) Governance Code (the Code).
How to demonstrate compliance with the Code
- The Code sets out the minimum standards that charity trustees should meet to effectively manage and control their charity.
- To demonstrate compliance with the Code, charities must complete the Compliance Record Form and subsequently update the Compliance Record Form every year.
- The Code operates on a ‘comply or explain’ basis, meaning that charities must comply with the Code or else explain why they have not done so.
- Compliance with each specific standard must be demonstrated as part of the Compliance Record Form. Organisations must record the actions that the charity has taken to meet each standard of the Code and reference the evidence that backs this up. The Compliance Record can also be used to explain why a charity is not in compliance with any particular standard in the Code.
Reporting on compliance with the Code in 2021
Under the Charities Act 2009, every registered charity in Ireland is required to submit an Annual Report to the Charities Regulator within ten months of the charity’s financial year-end. From 2021, charities will be required to submit a declaration in relation to compliance with the Code with their Annual Report.
A charity will be required to determine if:
- It does not need to meet the Additional Standards of the Charities Governance Code.
- It does need to meet the Additional Standards of the Charities Governance Code.
- It has not yet commenced compliance with the Charities Governance Code.
Additional standards of the code are those standards which a charity that is considered “complex” should meet or charities who are not complex but decided to apply the additional standards.
The CRA has not defined what is considered a “complex” charity and the charities trustees of each organisation are best placed to make that decision. Charity trustees can base this decision on indicators such as income streams, number of employees, complexity of activities, working with vulnerable people or operating overseas.
The charity will be required to declare if, at the time of filing its Annual Report, they have:
- Complied with all sections of the Charities Governance Code.
- Complied with some of the sections of the Charities Governance Code.
Formal adoption of the Code at Board meetings
All charities are expected is to discuss and agree at board meetings how they will meet the standards of the Code and to document their decisions in the minutes. The Compliance Record Form should record the actions taken to meet each standard of the Code and all minutes of meetings relevant to each standard of the Code.
The Charities Regulator will adopt a balanced and proportionate response in relation to any charity which is not in full compliance with the Code in 2021, with an emphasis on understanding common reasons for partial or non-compliance. This will enable the Regulator to identify common reasons for non-compliance and provide further guidance to charities on meeting the standards set out in the Code.
How Crowleys DFK can help
We recognise that completing the Compliance Record Form and ensuring compliance is properly documented is a time-consuming task and the process will be challenging for many organisations. At Crowleys DFK, we can assist you through the process of completing the Compliance Record Form. We have developed a suite of templates for the Compliance Record Form and the various policies and documents needed as evidence of compliance.
For more information and expert advice, contact a member of our Charities & Not-for-Profit team.