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Background to the proposed change to the Constitution
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UK-TUG is a voluntary association whose purposes are charitable (educational
and scientific). It cannot register as a charity, because its annual gross
income at about \pounds 3000 is less than the minimum \pounds 5000 threshold.
UK-TUG's constitution refers to independent examination of its accounts. Since
2007, there is no requirement for annual scrutiny of account for charities
whose annual income is less than \pounds 10,000. Indeed, if an independent
examiner has been appointed and finds that the income is less than this figure,
they are required to refer back to the Trustees (a Charities Act term which
effectively would mean the committee of UK-TUG) for confirmation that the
examination should proceed. (See the Charity Commission document CC63(a) --
Independent Examination of Charity Accounts 2007.)

Other changes to legislation have increased the scope of audit and independent
examination where this is a statutory requirement. Consequently, the level of
fees charged by professional accountants have risen significantly. A medium
size firm of accountants in Leeds would charge fees in the region of \pounds
750--\pounds 1000 for independent examination of UK-TUG accounts,
notwithstanding that this is a quarter of the gross income. Smaller firms of
accountants (with two or three partners) commonly do not undertake independent
examination or audit for voluntary associations or charities. This seems to be
because practitioners are now expected to hold relevant certification, in
addition to their primary accounting qualifications, before they can act on
behalf of larger organisations, and so they are unwilling to act for smaller
ones because of the problems arising from the need for professional indemnity
insurance.

UK-TUG paid \pounds 215 last year in accountancy fees, and a similar provision
has been made in the accounts for 2010--2011. However the wording of the report
makes it clear that this was not not technically an independent examination. It
seems likely that a full independent examination by a professional accountant
would cost significantly more than \pounds 215. As this is already more than
10\% of the gross income last year, it seems prudent to ask whether UK-TUG
wishes to continue to specify independent examination in its constitution.
There is no statutory requirement for it to do so.

As a result, and bearing in mind the provision referred to at the end of the
first paragraph, it seems necessary to either ask for specific authorisation to
pay the going rate for a professional independent examination, or else to alter
the Constitution so that this is not required in future. Independent
examination by an unqualified person (such as a treasurer of a similar
organisation who is competent to draw up accounts that meet the Charity
Commission's Statement of Recommended Practice), would be a reasonable
alternative if there was a suitable volunteer, but this is not always easy to
arrange.

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