4.1 Constitutions, accounts and accountability
All Registered Charities must hold a constitution stating their aims and objectives.
Every year, your organisation needs to keep proper books and an Annual Statement of Income and Expenditure (these accounts must be checked by an auditor if your organisation’s annual income is more than £100,000). All accounts must be held for six years in case they are queried.
The reason that you need to detail your accounts and hold on to them for six years is because you are answerable to the public (you are, after all, getting exemption from tax payments which the rest of the public are having to cough up).
The public have the right to ask to see your accounts at any time and they can call in an investigation by the Lord Advocate if they think your organisation is being mismanaged.
Your accounts and constitution must therefore be accurate, up to date and available for inspection if necessary. If you cannot provide them on request, your organisation could lose its charitable status, its activities can be suspended, and it could face penalties – see Charities Legislation 1992 (a copy can be obtained from the Council).
As well as having charitable status, your Committee might wish to consider the advantages of becoming a Company limited by Guarantee. There is more information on this in the section on Financial Risk.