Charity management accounts: the questions trustees should ask at every meeting

Trustees do not need to be accountants to oversee a charity’s finances, but they do need to understand the information they receive and know when to ask more.

The Charity Commission says the financial information provided at each trustee meeting should typically include the latest management accounts, a comparison of budget with actual figures, an explanation of the variances and details of cash flow and closing bank balances. Receiving those reports is the start of the job. The value comes from understanding what the figures mean for the charity’s sustainability and its ability to deliver services.

This article, written for trustees of charities in Liverpool, Manchester and across the North West, sets out what a useful finance pack should contain and six questions that turn financial reporting into board decisions.

Key points

• Financial oversight is a collective responsibility, not only the treasurer’s
• A finance pack should typically include management accounts, budget against actual, variance explanations, cash flow and closing bank balances
• A healthy bank balance can hide restricted funds and committed spending
• Trustees should read the papers before the meeting and leave it with agreed actions

Who is responsible for a charity’s finances?

The Charity Commission’s April 2026 blog on financial habits says collective responsibility is a cornerstone of good governance, and that this includes financial oversight. Financial information should be understood around the boardroom table, it says, not just by the treasurer.

The same blog accepts that not every trustee comes with a finance background. What matters is a willingness to engage with the numbers, ask questions and seek advice when needed. A treasurer or finance committee may do the detailed scrutiny, but the whole board should be able to say whether the charity is within budget, can meet its commitments and is financially sustainable.

What should a trustee finance pack contain?

The Commission’s 15 questions trustees should ask says the financial information at each trustee meeting should typically include:

• the latest management accounts
• a comparison of budget to actual figures
• an explanation for variances between forecasts and what actually happened
• details of cash flow and closing bank balances

Its guidance on improving a charity’s finances (CC12) also points to budgets and financial projections being provided at regular trustee meetings. Depending on the charity’s size and activities, a board is better placed when the pack also shows updated forecasts, committed expenditure, restricted fund balances and reserves compared with the reserves policy.

A bank balance on its own does not show financial strength. Some of the money may be restricted to particular purposes, and some may already be committed. The level of detail should be proportionate: a small community organisation may need a straightforward report, while a charity with several funding streams, employees and service contracts needs more analysis. The 15 questions also ask whether trustees read the accounts and background material before the meeting, so the pack should arrive in time to be read.

Six questions that turn the figures into decisions

1. What has changed since the last meeting, and why?

Management accounts should explain more than whether the charity is ahead of or behind budget. A charity may look underspent because recruitment was delayed. That could be a temporary saving, or it could mean planned services have not been delivered. Income below budget might be a grant paid late or a real shortfall in fundraising.

Trustees should establish:

• whether significant variances are timing differences or permanent changes
• whether shortfalls or unexpected costs will affect the full-year forecast
• whether the position is affecting delivery of charitable activities

2. Will we have enough cash to meet our commitments?

A charity can report a surplus and still have a cash problem. Grant income may be recognised in the accounts but not yet received, while salaries, rent and supplier invoices still have to be paid. The Commission’s checklist asks whether the charity can meet its financial commitments as they fall due and whether trustees would identify potential insolvency in good time.

A rolling 12-month cash flow forecast is a common way to answer that, and a charity under immediate pressure may need it more often. Trustees should ask:

• Can we meet payroll, supplier payments and other liabilities as they fall due?
• What happens if a major grant, donation or contract payment is late?
• When do cash balances get particularly low?
• What contingency is available if expected income does not arrive?

3. How much of our money is restricted, and what can we actually spend?

Restricted funds can only be used for the purposes the donor or funder specified. Unrestricted funds can generally be applied to any of the charity’s purposes. Designated funds are unrestricted funds the trustees have earmarked, and trustees can normally reconsider that decision. A charity may therefore hold a large cash balance and have little flexibility over how it is used.

Trustees should ask:

• What proportion of our funds is restricted?
• Are restricted funds being used in line with the funding conditions?
• Do we have enough unrestricted resources to cover general running costs?
• Is any project spending ahead of the funding available?

4. Are our reserves still right for the risks we face?

The Commission’s 15 questions ask trustees to know what assets are freely available to spend and not already set aside or designated, which is the idea behind the definition in SORP 2026. There is no single reserves figure that suits every charity. The Commission’s reserves guidance, CC19, asks trustees to set a policy that reflects their own circumstances.

Trustees should ask:

• What are our reserves now, and how do they compare with the policy?
• Are we drawing on reserves to fund recurring costs?
• Have changes in income, costs or risks altered the level we need?
• If reserves are below target, what is the plan to rebuild them?

The annual reporting requirements are covered in the article on charity reserves under SORP 2026, but reviewing reserves through the year is better than waiting until the accounts are prepared.

5. Are the assumptions behind our budget still realistic?

The Commission describes good practice as a realistic budget that is reviewed regularly against actual income and spending. An approved budget does not stay credible by itself. If it assumed a level of donations, grant renewals or commissioned income that no longer holds, it gives an optimistic picture.

Trustees should ask:

• Which income streams are confirmed and which are still uncertain?
• Have salary costs, supplier prices or other running costs changed?
• Are we relying on fundraising targets not yet achieved?
• Has demand for our services outgrown the budget?
• Do we need a revised forecast or alternative scenarios?

A revised forecast shows where the charity is likely to finish the year, which is more useful than the position expected when the budget was approved.

6. What action should we be taking as a board?

The last question is what the figures are telling trustees to do. Where pressure is emerging, the board may need to control spending, review activities, strengthen income, revise forecasts or take specialist advice. It should also ask whether the information itself is reliable. Unexplained balances, overdue reconciliations or repeated reporting delays can point to weaknesses worth investigating.

Before the finance discussion ends, trustees should be clear about:

• which financial risks need further attention
• what action has been agreed and who owns it
• when progress will be reported back
• whether further financial or professional advice is needed

Recording the questions, decisions and actions in the minutes also shows that trustees have considered the charity’s position.

Why regular reporting is the early warning

The Commission says that in its casework, financial difficulties that might have been manageable early can escalate when they go unnoticed or unacknowledged for too long. Most financial problems do not appear overnight, it adds, and they develop gradually. The Commission describes regular, accurate reporting as a way of making good decisions, not as bureaucracy.

The warning signs that trustees should be reviewing in 2026 are covered separately, and the point at which to involve the regulator is set out in contacting the Charity Commission about financial difficulty. The Commission has also published a Trustee Finance Toolkit and a financial health checker that matches a charity with the guidance it needs, and it suggests working through the checker with the board.

Frequently asked questions

Are your management accounts giving trustees the information they need?

UHY Williamson Croft’s charities and not-for-profit team works with trustees and finance teams across Liverpool, Manchester and the Wirral on financial reporting, budgeting, cash flow forecasting and governance. To review the information your board receives, get in touch or call Taylor Rogers on 0161 399 0121 (Manchester) or 0151 303 3112 (Liverpool).

Further reading: Charity finances under pressure: five risks trustees should be reviewing in 2026.

Sources: Charity Commission blog, good financial health starts with good financial habits, Charity Commission, 15 questions trustees should ask, Charity Commission, CC12, Charity Commission, CC19, Trustee Finance Toolkit, Commission financial health checker.