Club officers have a responsibility to keep members up to speed with its activities and to account for all income and expenditure that has been handled by the Treasurer and by the club committee. This means that you need to present the club’s accounts to the end of the financial year at the Annual General Meeting. The accounts should be verified and signed off by the club’s committee.
You also need to produce annual accounts for HMRC (tax office) and Companies House where your club is a limited company.
You may also need to have your annual accounts audited. This just means that the financial records have been independently checked and verified as a true and correct record of the club’s financial position by someone with a recognised accounting qualification and registered auditor status.
Unless your club’s constitution, articles or members require it, clubs are not legally required to carry out an audit – unless the club:
- Is operating as a limited company with income (turnover) of £6.5 million,
- Has 50 employees or more
- Has assets worth more than £3.26 million
This isn’t likely for the vast majority of sports clubs.
If the club’s constitution states that the club must audit its accounts, the committee has a legal obligation to ensure this happens. The cost of an audit can be expensive so the club might want to think about changing its constitution/rules if this is considered appropriate and is supported by the members.
An alternative to a full audit is an independent examination. This simply involves an independent, qualified person (an outsider not connected to the club) examining the club’s accounting records to ensure they agree with the annual accounts produced for the members.
Clubs should check however, if terms and conditions of any grant funding or bank loan agreements require that the accounts be audited before changing its rules.