AGM 2015 Proposal 1

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Freegle AGM 2015 - Disapplication of the Requirement for Audited Accounts

Wording and result of Poll sent to all registered Members of Freegle

Request from the Board of Freegle

The Board would like the AGM to approve the disapplication for a full audit for the Freegle Ltd accounts 2014/15 and 2015/16 and instead accept Independent Examination from a qualified accountant. This would be in line with procedure used with Freegle UK accounts for the previous two years.

The reason we are asking for disapplication of audit is due the the level of expense for an external auditor and time required from the volunteer Treasurer required for a full audit.

Under the laws governing Industrial and Provident Societies you must have a full audit if you are a charitable society type IPS and have a turnover of over £250,000 or assets in excess of £2,800,000. As we don't get anywhere close to these figures the expense and time for a full audit seems excessive when our transparency is confirmed by a qualified accountant through Independent Examination.

More information can be found in plain English from the Co-op here:

An Audit Tale | Co-operatives UK

...and in the legal explanatory note here: si2006/draft/em/uksidem_ 0110737857_en.pdf

Statement from the Treasurer of Freegle The following statement was posted by the Treasurer of Freegle, Jane Loveday, to Freegle UK Central on 14 June 2015.

As Treasurer of Freegle UK and Freegle Ltd, I thought it might be useful to describe what actually happens in the various options for checking the accounts, and my opinion of each option.

  • Option 1 - No internal or external checking of the accounts, just trust that the treasurer knows what she's doing & that she is honest & not in league with any of the bank signatories. The advantage is that there is no extra work for the Treasurer, no fees to pay, but the big disadvantage is that if there any suspicion of shady practice, now or in the future, there is no proof either way, and Freegle's reputation would be damaged. From a purely personal point of view, I would always insist on some form of checking - far from being an imposition, I feel it is a vital safeguard for all parties, not least the person keeping the books.
  • Option 2 - Appoint an internal auditor from within Freegle. This is better than nothing, but unless we have someone who has relevant experience or qualifications, the standard of the checks is not formalised or consistent - it can range from doing nothing because they think I probably am doing a good job to being over zealous and demanding chapter and verse on every last penny. There is also the potential problem that the internal auditor and the Treasurer may well know each other, even if that is just on-line, so the checking is not as arm's length as it should be.
  • Option 3 - Have an external, qualified accountant carry out an Independent Examination (IE) of the accounts. An IE has a structure and a formal report at the end of it. It is far from an easy option - the IE of the Freegle UK accounts for the financial year ended 5th April 2014 resulted in me sending over 40 emails to the Ind. Examiner giving answers & supporting documentation to very specific (and insightful) questions. I was impressed by the thoroughness and thoughtfulness of the examination - and at a very modest fee.
  • Option 4 - A full blown audit. This would be more detailed than the IE, cost more, and take up more of my time. Given the thoroughness if the IE, I don't see the point of doing this for the fairly modest sums involved in the Freegle accounts.

I therefore fully support the Board's proposal to dis-apply the requirement for a full audit, and to have an Independent Examination instead.

Question to Freegle Members

I approve the Board's request for the disapplication of the requirement for audited accounts as described in this poll.

Options provided to vote: Yes or No

Result of Poll

The poll was carried by 56 voting yes (1 voting no). This result was posted on Freegle UK Central on 19th June 2015 -

AGM 2015