What Should be Included in a Charity’s Trustees’ Report?

A trustees’ report is the narrative part of a charity’s financial statements and helps to explain the numbers in the accounts. The inclusion of a trustees’ report in the charity’s financial statements is a legal requirement and enables a charity to be transparent and publicly accountable for the funds received and what these have been spent on. As well as being a legal requirement, the report is also a useful tool for charities to communicate to the public and show the important work that the charity is doing and how they can help.

The below advice is relevant to small charities preparing accrual accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

The following sections should be included in the trustees’ report:

Reference and administrative details

This section should include:

• The name of the charity.
• The charity registration number and company registration number (if applicable).
• Registered office address.
• A list of trustees who served during the year and up to the date the financial statements were signed. Dates of appointment and / or resignation should be included, if applicable.

Objectives and activities

This section should include:

• The purpose of the charity, per the charity’s governing document.
• Details of the activities that the charity undertakes to fulfil the charitable purpose.

Achievements & performance

This section should include a summary of the main achievements of the charity during the year, for example the activities the charity undertook and how these helped to fulfil the objectives of the charity.

This section of the report is an excellent way to show case the work of the charity. Stakeholders reading the report will be able to see how their donations/contributions to the charity were used and what difference was made. Tables and graphs can also be used to illustrate the achievements.

Plans for future periods should also be outlined. Prospective donors reading the report will see how a contribution to the charity would be used.

Financial review

This section should include:

• Review of the financial position at the end of the year, for example the surplus or deficit achieved in the year and the balance of total funds (restricted and unrestricted).
• Reserves policy outlining what level of reserves is to be held and why. If the actual reserves held are more or less than the policy, then provide details of the plans in place to improve the position.
• If a deficit was made in the year, or there are any uncertainties relating to going concern, these should be addressed.
• Risk assessment detailing the risks and uncertainties facing the charity and a summary of the strategies in place for managing the risks. It is important that this section addresses the impact of covid, Brexit, and the cost of energy, etc.

Structure, governance, and management

This section should include:

• Nature of governing document.
• Details of how trustees are appointed and trained.

Useful guidance regarding trustees’ reports and reserves policies can be found in the ‘guidance and forms’ section of the Scottish Charity Regulator’s website:  www.oscr.org.uk

If you would like to discuss your charity’s trustees report in more detail, please do not hesitate to contact us.

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