Providing an Effective Internal Control System – First Steps to Good Governance in Charities Synopsis Senior management in a charity needs to establish an effective framework of control as part of its governance process. ‘The voluntary sector is not immune to poor management, fraud or simple breakdowns in controls.’ Responsibility for risk management and control should be clearly understood by all its staff and volunteers. Statements are given as to how a charity can proactively tailor risk management and control for its organization. Cutting edge internal auditing in a charity will always continuously assess its effectiveness as part of the control framework. Contributed by Tracey Hassell, reproduced from her book Charities Internal Controls Checklist
(2003), with permission from the publishers Plaza Publishing Limited, London, England.
After Reading the Case Study Consider:
1. How have the recommendations in this case study been impacted by the publications
on corporate governance and control published since and discussed in this chapter? [In
particular, the Financial Reporting Council statements Internal Control Revised Guidance
for Directors on the Combined Code (2005) and The Combined Code (2006), and the
ACEVO/ICSA/NCVO Good Governance: A Code for the Voluntary and Community
Sector (2005).]
2. Does the framework of internal control in your organization ‘    ensure everyone is
aware of the contribution that they personally should make to the whole process’?
3. Whether you are a charity, or not, are your internal auditing resources and practices
keeping up to date and at the cutting edge of the constantly evolving issues of risk,
control and governance in your organization and industrial sector?
4. Have you addressed all the statements on internal control in Figure 5.6.1, including any
added or changed by you after considering question 1 above?