The Charity Commission has published updated guidance on internal financial controls, also known as CC8, to help charities operating in an increasingly digital world. Internal financial controls are key tools for trustees to use to protect their charity and its resources, which is a key responsibility for all trustees. We have updated our guidance to make it clearer, shorter and ensure it reflects the many ways charities operate today.
What has changed?
We have restructured the guidance and simplified the language so readers can easily find the information they are looking for. We know that trustees very often manage their duties alongside other work and personal commitments so our new CC8 is also shorter – so that it is easier to read and put into practice.
We’ve also added new sections to reflect the ways charities can now operate. These cover issues such as:
- Using mobile payments systems, such as Google Pay and Apple Pay
- Accepting gifts and hospitality
- Accepting donations of cryptoassets
Why is this important?
The way charities and donors operate is changing
Following the COVID-19 pandemic, more and more charities took to providing their services online or using online services themselves. For some trustees this would have been their first time engaging with online payment systems and managing potential cyber risks. For others, while online payments may not have been new, developments such as cryptoassets, will be. The updated CC8 guidance now covers these areas to reflect the increasingly digital way charities receive donations and handle other assets.
Cryptoassets and cryptocurrencies in particular are new and fast evolving technologies and we published a blog last year to explain what they were and whether charities should use them. We know this is still a relatively novel idea to many – not just to trustees of charities. CC8 sets out the various risks presented by cryptoassets and sets out the Commission’s expectations of trustees should they, despite these risks, wish to accept them.
Charity resources remain under strain as the difficult economic climate continues
What should trustees do?
We encourage trustees to take the opportunity to read through our new guidance and discuss their charity’s internal financial controls at their next meeting. Trustees can use the accompanying checklist to help identify any gaps their charity may have and take action to address them.
*The views expressed are the author’s and not ICAEW’s.