Introduction
Monitoring Return
The Monitoring Return is designed as an information return from larger Scottish charities and looks at specific areas of interest, including:
- payments to charity trustees
- relationships with connected trading companies
- for larger Charities, comparison of some income / cost relationships.
Pre populated annual returns including the supplementary monitoring return forms are sent out to charities automatically if the gross income for the previous year is over £25,000. You can view a specimen copy of the monitoring return form - this is for information purposes only and should not be used. Our Guidance Notes will help you complete your monitoring returns.
Meeting our requirements
The monitoring return requests some analysis of the charity’s current financial statements to allow comparison, for larger charities, of the income derived from specific activities with the costs associated with that income. Details requested in relation to trustees include payments to charity trustees and how this compares to the authority given in the charity’s governing document for such payments. Information on connected trading companies is considered to ensure that these companies are contributing financially to the objectives of the charity.
Processing of the Annual Return, Monitoring Return and Accounts
The information provided on the Annual and Monitoring Returns is input into a database and if the forms have been completed correctly will pass level one validation. If any information is missing, the forms will be reissued, prepopulated with the data provided, and a covering letter will highlight the omissions. If the forms are complete but no accounts received, a letter will be sent requesting timely accounts submission.
Level two validation involves a review of the accounts to ensure that the key components are present, including the charity trustees annual report and report of the auditor or independent examiner, and that the accounts are signed and include the Scottish charity number. Over the past two years of monitoring, OSCR has taken a pragmatic approach and where accounts have not met the required standard we have written to the charity with a qualified pass letter, highlighting the deficiencies requiring compliance in the following year.
Accounts which do not include a compliant receipts and payments account, statement of balances (R&P) or a Statement of Financial Activities and Balance Sheet (accrued) for accounting periods ending 31 March 2008 and later, will be returned to the charity. The charity will then have to make the necessary changes to the accounts and re-submit these to OSCR within 60 days. We will continue to issue qualified pass letters for any other deficiencies.
Once both validation stages have been successfully concluded, the Annual Return Status entry on the Charity Register will be updated to read: '(year) annual return complete'.
The information provided on the Monitoring Return will be assessed against 41 active triggers used for Exception Reporting. Where a trigger is activated OSCR Monitoring staff will undertake a more detailed review of the accounts to seek, wherever possible, a resolution to the exception. If following the accounts review, the exception remains unanswered or additional points have been identified, a request for further information letter will be issued. Any unresolved matters remaining at the end of this process will be assessed and directed as appropriate to either the Compliance Support or Investigation teams for follow up.
OSCR has an Enquiry and Intervention Policy under which enquiries, arising out of internal referrals and external complaints, are undertaken.
