As an ex auditor I am delighted not to be knee deep in the charity accounts season as we currently are. However, as a trustee and charity advisor, I see this time as a golden opportunity to see if you are getting value for money out of your auditors or examiners or even if you are working together with them in the most efficient way possible. With so many charities having 31st March year ends the months April to July inclusive are amongst the busiest time for accountants so communication between them and their client at this time of the year is often not at its optimum.
So ask yourself the question whether you need to have your work done at this time of the year when the team working with you are moving swiftly from one job to the other. The auditor or independent examiner is absolutely dependent on your cooperation at this time of the year and can ill afford it when something goes wrong during the work as sorting out your problem can cause them problems elsewhere. This will often lead to extra fees for you. So think about having your audit or independent examination happen at a quieter time of year for the auditor and use that to potentially negotiate a better fee. This might mean a year end change which may not suit certain charities but may not be an issue.
Many charities agree timetables for production of information with their auditors or examiners but some still do not which can create problems right at the outset. And even when timetables are agreed are they realistic for you first of all? Can your team produce what they promise in time for the auditor or examiner and is it of the right quality? Failure to meet the timetable can again cause problems and additional fees so make sure that the timetable is capable of being delivered.
One area where a lot of time can be saved is in the production of the Trustees Annual Report. Too many times I used to be held up by the late production of probably the most important section of the Annual Accounts. Yet it consists of primarily words, many of which are standard and others descriptive of both current and future activities. Given that a well run charity should have a reasonable idea of its results before the annual accounts are produced, what is stopping the trustees from producing the words to the report and adding in any relevant figures later? Only if there are surprises as a result of the audit or examination and in a well run charity that should not be the case. Therefore consider having your draft trustees report ready at the beginning of the year end process before the auditors or examiners arrive.
Finally what about assessing the performance of the auditors or advisors. This should happen at the end of every audit or examination either to validate their performance in order to confirm re-appointment or to feed back any issues. In any event I would always recommend re-tendering at the least every three years and at the most every five years. You need to judge what else is out there. Are you getting merely a compliance service which you may feel is all that is necessary, provided you have other skills on the board of trustees to give you what you need? Or you may want a more pro-active service where the advice is ongoing, even if you do not recognise the need yourself! The larger the firm the larger the fee? Possibly, although that is not always the case. The use of the accountants to prepare the accounts for smaller charities is sometimes the case where the charity's accounting staff have limited skills but can the accountants help bridge the gap by training your staff? VAT can be a big issue for many charities but does your firm of accountants have someone with the necessary skills or are they learning at your expense? Some charity's use one firm of accountants for the audit or examination and other specialist advisors for other advice.
Whatever the situation a well crafted tender request can give you the answers. It does not need to be War and Peace which sadly some charities produce and which then produce an equally long tome in response. Such an approach may even put off certain firms from tendering when they could be just what you need but don't have the marketing resources that some of their competitors do. Some of the most effective requests for tender that I came across were less than 2 sides of A4 but asked some challenging questions which were very good at sorting out a shortlist of potential candidates. Those questions were often based around existing or previous problems and asking the firms concerned how they might have approached the issue. You are not looking for a freebie answer (although you might get one!) but for the sort of process they would go through which will tell you much about the firm
So in conclusion, use this time of year to consider whether your auditors or examiners are delivering what you originally asked for or something beyond and are they delivering Value For Money?