GUIDANCE NOTES FOR STANDARD FORM OF ACCOUNTS DISTRICT Accruals

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GUIDANCE NOTES FOR STANDARD FORM OF ACCOUNTS DISTRICT Accruals Powered By Docstoc
					The Methodist Property Office – Resourcing Mission


                                                                                                               Year 2008-2009




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Method of Accounting - Accruals
This Standard Form of Accounts (Accruals) should be                  An Auditor or Independent Examiner must not be a
used where the District’s gross income from all                      member of the Synod or any District Committee, nor a
sources (including income from Connected                             close family member or business associate of a trustee.
Organisations) exceeds the Accruals threshold. (Details
are on the Methodist website)                                        The Charity Regulator guidelines indicate that a major
                                                                     contributor to, or beneficiary of, a charity does not have
All of the financial thresholds for 2008 – 09 are based              the necessary degree of independence to act as an
upon gross income. Expenditure is not taken into                     Independent Examiner.
account.
                                                                     Annual Report and Accounts
To calculate gross income for threshold purposes
add the Total Incoming Resources figures shown in                    Every Methodist District is required to prepare and
the Statement of Financial Activities (SOFA) line 10                 complete its Annual Accounts using the Standard Form
columns 1 to 3 (General and Restricted funds).                       of Accounts to meet the requirements of the Conference
Capital Receipts from the sale of property are not                   and of the Charity Commission (for England and Wales)..
income and may be excluded from the calculation of
gross income.                                                        Charity Registration
                                                                     Districts in England and Wales with a gross income
Contributions to the Methodist Church Fund may                       exceeding £100,000 are required under the Charities Act
also be deducted.                                                    2006 to register with the Charity Commission from 1
Accruals Accounts include all Incoming Resources and                 October 2008 in line with the programme agreed with the
Resources Expended relating to the period regardless of              Charity Commission.
when they were received or paid. This differs from the
Receipts and Payments method which is based on cash                  All other Districts will continue to be Excepted Charities
movements in the year.                                               under Statutory Instrument no 2655 of 2007. If required,
                                                                     Districts should make their accounts available to the
(see Thresholds table – Methodist website)                           public on request.

Accounts Scrutiny Requirements                                       In Scotland the Districts have registered with the Office
Where gross income exceeds the audit threshold an                    of The Scottish Charity Regulator (OSCR) in order to
audit is required by a Registered Auditor. (Details are              maintain charitable status under the Charities and
on the Methodist website)                                            Trustee Investment (Scotland) Act 2005. The Excepting
                                                                     Order no longer applies.
*Where an audit is required the auditor may produce a
set of SORP compliant accounts without also completing
the Standard Form of Accounts. The Declaration Form                  In the Isle of Man and the Channel Islands, the Charities
from the latter should be completed and attached.                    Act 2006 does not apply, but the Standard Form of
                                                                     Accounts must be completed.
Where an audit is not required an Independent                        All Districts, whatever their jurisdiction, must complete
Examination is the appropriate method of scrutiny.                   Annual Accounts and arrange for them to be audited or
(Details are on the Methodist website – Threshold Table)             independently examined, as appropriate.
Registered Auditors have their own professional
requirements. There is a Charity Commission booklet of
guidance notes for Independent Examiners and
information in Managing Trustees and Methodist Money.
Standard Form of Accounts/District Accruals notes 2008 page 1 of 3
Further Information
                                                                     3 Interest and Investment Income - Include all bank
Additional information can be provided to the Synod to               and Central Finance Board (CFB) interest under this
give more detail and District Treasurers may design their            heading, including interest income from deposits with the
own forms for this purpose to suit local needs. The                  Trustees for Methodist Church Purposes (TMCP). Where
Synod should carry out an annual review of their                     the use of income is restricted, the amount should be
activities and report accordingly in the Trustees’ Annual            entered in the Other Funds (Restricted) column.
Report. A Model is available on the Methodist website.
                                                                     7 Grants - Money received in the form of grants from all
The Charities Act 2006 requires registered charities to              sources should be entered on this line differentiating
complete a Trustees’ Annual Report. A full report is                 between general and restricted funds.
required where the charity is required to carry out an               9 Left blank for your use if required.
audit, A briefer report is available in the case of all other
charities. (Guidance is available from the Charity                   10 Total Incoming Resources -Total of lines 1 - 9.
Commission website                                                   RESOURCES EXPENDED
The Trustees’ Annual Report should accompany the                     11 Salaries and associated costs - Enter the gross
Annual Accounts and include objectives and                           amounts payable to any District staff (which does not
activities and confirm that the trustees have                        include the District Chair’s stipend). Include employer’s
established a Reserves Policy.                                       NIC and pension contributions.
                                                                     12 Manse costs - All costs incurred in maintaining the
The Standard Forms of Accounts follow the requirements               manses should be shown here, including Council Tax
of the Statement of Recommended Practice (the                        and water rates, insurances, repairs and renewals.
Charities SORP) and are also endorsed by the Charity                 Details of the individual amounts comprising the total
Commission and the Office of the Scottish Charity                    should be set out as a note to the accounts.
Regulator (OSCR).
                                                                     15 Insurances, Utilities etc - This heading includes the
Reporting Process                                                    cost of water charges, insurances and any other Council
                                                                     taxes on District properties other than the manse.
The Standard Form must be signed by the District
Treasurer and by an Independent Examiner or Auditor,                 17 Depreciation-The charge for the year on any fixed
as appropriate. It must then be adopted by the District              assets capitalised in the Balance Sheet.
Trustees, presented to Synod and then signed by the                  18 Provisions - Sums set aside for anticipated future
District Chair. The Declarations set out on page 8 are               expenditure.
provided for this purpose.
                                                                     23 Total Resources Expended - The total of lines 11
Audit                                                                to 22.

Where an audit is carried out by a Registered Auditor the            24 Net Incoming Resources - Deduct line 23 from line
Standard Forms need not be completed though the                      10, to arrive at the Net Incoming Resources figure.
format used is a preferred format if the Auditor concurs.            Where Resources Expended exceed Incoming
                                                                     Resources, put the resultant amount in brackets.
Send the completed Standard Form of Accounts to
the Resourcing Mission Office (pages 1 - 8) together                 25 Transfers between funds -This will balance to nil
with a copy of the District Reserves Policy; the                     across the columns. If there are movements between two
District should retain these guidance notes, the                     or more funds in the ‘Other Funds’ column, show the net
Annual Report, any Internal Organisations’ Report                    amount.
forms, and all the notes to the accounts.                            27 Gains and losses on investment assets -This is the
                                                                     total of any gains and losses resulting from the
How to complete the Form                                             revaluation of investment assets to market value at the
Round all amounts to the nearest £.                                  end of an accounting period and any gains and losses
                                                                     resulting from the disposal of investment assets during
STATEMENT OF FINANCIAL ACTIVITIES (SOFA) for                         the year. Add to (or subtract from) Sub total to arrive at
the year ended 31 August 2009                                        Net investment in funds.
INCOMING RESOURCES                                                   28 Total funds brought forward - Bring forward the
1. Assessment/Share - All amounts due from the                       figures from last year’s accounts.
Circuits in the District.
                                                                     An Internal Organisations Report Form, which is
2. Capital Receipts - Include sales of investments and               distributed with the Standard Form of Accounts, must be
the District manse. Proceeds of sale of property will be             completed by each Internal Organisation to enable Total
held in a separate trust for the District trustees.
Standard Form of Accounts/District Accruals notes 2008 page 2 of 3
Incoming Resources and Resources Expended figures
for the Church to be calculated.                                     Together, the main District accounts and the accounts of
                                                                     any other District Organisations make up the financial
Transfers between the District and other District                    position of the Charity. These figures are combined in the
Organisations are not part of gross income or total                  SOFA. The Total Incoming Resources determine the
expenditure, and payments to the Methodist Church                    method of accounting required and the method of
Fund may also be deducted from the total income figure.              accounts scrutiny.

GUIDANCE NOTES – BALANCE SHEET                                       Various publications (including help for independent
as at 31 August 2009                                                 examiners are available from the Charity Commission’s
                                                                     website (www.charitycommission.gov.uk).
(see Notes to the Accounts page 4)




Standard Form of Accounts/District Accruals notes 2008 page 3 of 3

				
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Description: GUIDANCE NOTES FOR STANDARD FORM OF ACCOUNTS DISTRICT Accruals