Financial responsibilities of a charity trustee

Category: Charities - Posted On: Nov 9 2022


Charities rely on trustees to help control and manage the charity and it is the duty of all the trustees that the charity fulfils the charitable purpose for which it was created. While it can be seen as an honour to fulfil these duties, it involves a certain commitment and level of responsibility which should not be underestimated.

Our EQ Charities team discuss what is required of a trustee and the responsibilities associated with it.

What is a Charity Trustee?

The 2005 Act defines trustees as ‘persons having the general control and management of the administration of a charity’. They may be called directors, management committee members or committee members, but the law considers them to be ‘charity trustees’.

What are the Charity Trustee Responsibilities?

All charity trustees have legal duties and responsibilities under the 2005 Act that must be met. The general and specific duties, which apply equally to all charity trustees and to all charities registered in Scotland, are:

1. You must act in the interest of the charity2. You must comply with the 2005 Act (specific duties)
1.1 You must operate in a manner consistent with the charity's purpose2.1 Charity details on the Scottish Charity Register
1.2 You must act with care and diligence2.2 Reporting to OSCR: making changes to the charity
1.3 You must manage any conflict of interest between the charity and any person or organisation who appoints charity trustees2.3 Financial records and reporting
2.4 Fundraising
2.5 Providing information to the public

What are the financial obligations?

Anyone who has given time or money to a charity will have an interest in seeing its resources used properly. Trustees are responsible for financial record keeping and reporting. The 2005 Act states that trustees must:

  • keep proper accounting records
  • prepare a statement of accounts, including a report on the charity’s activities, each financial year
  • have the accounts independently examined or audited
  • send a copy of the accounts to us
  • keep the accounting records for six years.

The 2005 Act also requires charity trustees to act with care and diligence when managing the affairs of the charity. Having good financial controls in place make sure that trustees can manage the charity effectively and meet their legal duties.

Trustees must also prepare a Trustees’ Annual Report (TAR) for inclusion in the annual accounts. You can read the requirements of the TAR in our previous article.

If you have any questions, or want to discuss your circumstances, please contact a member of our EQ Charities team via charities@eqaccountants.co.uk or contact one of our offices.