Choosing the Right Type of Accounts and Examination
The type of accounts the PCC prepares and whether an audit or an independent examination is required depends on its financial situation:
- Gross income £250,000 or less: The PCC can prepare accounts on a receipts and payments basis or an accruals basis.
- Gross income over £250,000: The PCC must use the accruals basis and consider whether:
- The gross income exceeds £1 million, or
- The gross income exceeds £250,000 and the gross assets exceed £3.26 million
If either of these thresholds is met, the accounts must be audited by a registered auditor.
If neither threshold is met, the PCC can opt for an independent examination, provided the examiner meets the qualification requirements outlined below.
Independent Examination of PCC Accounts
If your PCC is eligible for an independent examination, the person who carries out this review is known as the independent examiner. They are formally appointed by the Annual Parochial Church Meeting (APCM) usually based on the recommendation of the PCC.
To make a recommendation, the PCC should understand:
- What the independent examiner is expected to do
- What information they will need
- What they will report on
It is essential that the independent examiner is independent of the PCC and has the necessary skills and understanding to carry out the role effectively.
- If the PCC’s gross income exceeds £250,000, the independent examiner must hold an appropriate professional qualification.
- If the income is £250,000 or less, the examiner does not need to be a qualified accountant, but should still be competent to carry out the role.
In all cases, the person appointed should have relevant financial experience—this could include, for example, a treasurer from a neighbouring parish or someone with a background in finance or administration.
Please see the Charity Comission's Independent Examination Guide for Trustees for more information, this may be helpful to circulate around PCC members.
Help Available
We are often asked to recommend the services of an independent examiner. Whilst we cannot endorse one particular firm or individual, we do get to know of organisations and people willing to help:
- West Yorkshire Community Accounting Services (WYCAS) offers a full range of accounting services, including independent examination. See https://www.wycas.org.uk/ to find out more.
- You can email resourcingparishes@leeds.anglican.org for further advice and support
Useful Resources
To support your PCC in carrying out or preparing for an independent examination, the following resources are available:
Guide to Independent Examinations
A practical, step-by-step guide created by one of our Treasurer Ambassadors, Lydia Groenwald. This guide reflects real parish experience and is a helpful starting point for both examiners and PCCs
Templates and Checklists
Sample Letter of Engagement (PCC Accountability)
Independent Examination Checklist (Charity Commission)
Example Independent Examiner’s Report (PCC Accountability)
Example Accounts
External Guidance
Parish Resources – Independent Examination
Directions and Guidance for Indpendent Examiners (Charity Commission)
Charity Comission's Independent Examination Guide for Trustees
If you need help accessing any of these resources or would like to suggest additional tools, please contact resourcingparishes@leeds.anglican.org.