Friday, 29 December 2006

Admin costs R.I.P.

ADMIN COSTS ARE DEAD. With the new accounting system enforced by the Charity Commission ("SORP 2005"), which nearly all charities are now observing, it is now impossible to work them out - and we will have to drop them from our site in the New Year.

The change represents an over-reaction (presumably an uncontested one) by the voluntary sector's lobbyists. Clearly the public wasn't consulted about the new SORP; but the public wants at least *some* clue of how much is spent on support costs. Now it won't have anything to go on at all.

It's a pyrrhic victory and a big shame: it won't increase the public's confidence in charities; it will just make people more suspicious.

3 comments:

Don Barnes said...

Absolutely right. I know how uppity charities get about their admin costs but to deny they exist at all is a crazy move. The pendulum has swung so far in charities' favour that we're now more in the dark than ever. Stupid stupid stupid.

Cameron Weaver said...

I totally agree. The Charity Commission has either has no idea, or wants to deny, that the public has any interest in admin costs - and so pretends they don't exist. This is staggeringly high-handed and shows a worrying lack of accountability and engagement with reality.

The committee that deals with all this stuff at the Commission didn't even discuss admin costs at their last meeting, and nobody there realizes that discovering admin costs is the number 1 priority for most people looking at charity accounts. Their behaviour astonishes me.

Brituncula said...

I would guess a lot of their problem was defining what is an administration cost - for example, if a charity gives small grants to individuals for veterinary treatment for their pets, is the cost of posting out the cheque "administration" or "functional"? Under the old SORP all book-keeping costs were counted as "administration" even though it's pretty essential to keeping the charity running at all.