Trusts, Trustees and Charities

 

Staffordshire County Council held its Endowment Charities Meeting to discuss the Annual Accounts for 2024/2025 last week.  

Staffordshire County Council acts as a custodian trustee for 13 educational endowment charities.  Part of its responsibilities is to oversee both the administrative and investment aspects of these charities.  One of the key duties includes approving the annual accounts before they are submitted to the Charities Commission. 

The allocation of income is delegated to the managing trustees of the respective schools, with County Council Officers ensuring that expenditure is in accordance with the Trustees’ intentions.  In scrutinising the accounts it was noted that three of the charities generated an annual income exceeding £25,000.  Income via interest from the funds invested were noted, and that paid from the COIF Investment Fund amounted to approximately £53,000 annually.  

However, expenditure, the Report noted, ‘varied, with funds being used for educational visits, prize-giving evenings, sporting and cultural activities, and occasionally for financial assistance such as uniforms.  The accounts remained simple, primarily detailing income and expenditure, and this simplicity was mirrored in the accompanying trustees’ report and the level of the audit.’   All, probably, light touch.         

But attention was drawn to the fact that, for some of these charities ‘no expenditure had been recorded’.  The question was raised as to why there had been no financial activity reported, given that the purpose of such organisations is to provide funds and support to the community.

It was noted that, ‘on occasion, funds were set aside for larger projects. For example, one school had previously saved resources over several years with the intention of constructing a theatre. The accounts were regularly distributed to the managing trustees and / or the individual schools to ensure they were aware of available funds.  At times, the Charity Commission also requested clarification regarding periods of inactivity, prompting reminders to schools about the purpose of the funds and providing copies of trust deeds as needed’.

Such periods without expenditure were not considered ‘unusual’. The Committee also discussed a distinct case concerning the Burton on Trent Educational Charity, which had recently had a scheme put in place following its establishment from the sale of land previously owned by a local school. The income from this fund had remained unused, leading to ongoing discussions about whether to continue administering the Charity or to wind it up and transfer the remaining assets to a similar charity in Burton. This matter was under current review, and it was confirmed that no permanent endowment had yet been invested which would make any decision to wind up the charity more straightforward, even though there would still be a requirement to follow the appropriate Charity Commission process to do so.

Members emphasised the importance of being kept informed about any schools, projects, or financial allocations under consideration, and that having this information available at the biannual meetings would provide helpful context for understanding related requests and developments.

Members further commented on establishing a structured plan to monitor dormant charities, possibly on a quarterly basis depending on satisfaction with outcomes.

It was suggested to review the past three to four years to assess whether funds had been accumulated for specific projects.

It was resolved that the Charities and Trusts Committee:

a.     Approve the Annual Accounts for 2024/25 for the 13 Charities where Staffordshire County Council is the Custodian Trustee;

b.     and b. Approve the Trustee’s Annual Reports for the 3 Charities, which are required to submit such to the Charity Commission.

However, it was unclear if the ‘suggestion’ to more closely assess the under-performing/stagnant charities was to be part of the resolution part (b).  That might be useful to know.

It would also be helpful if all Trusts and Charities within the county were to be similarly scrutinised, particularly those in the care of Parish and Borough Councils.

It would also be helpful if the Charities Commission undertook a little more scrutiny of all Charities and Trusts, generally.  It would also be helpful if the criteria of the regulatory bodies could be more clearly stated and defined, especially for the groups of individuals who raise funds from commercial enterprise and who call themselves Private Charities.   Such criteria must include clear and transparent accounting practices and submissions to the Charities Commission and/or HMRC and to the public.