This is a follow-up to the question "Can a charity give up its charitable status?", posted on 5 June.

Hi Charlie,

Further to my question regarding a Pre-school giving up charity status: we have now ascertained that the group have no financial records/supporting invoices/receipts. They do however have their bank statements. In the absence of any records we are assuming that an accountant would be unable to untangle the charity and the unincorporated group and make the decision in respect of whether the club is one entity or two sperate organisations.

The accounts submitted to the Charity Commission by the staff are assessed on their bank statement only. As all proceeds are banked together (with no record made of individual transactions) and expenditure is assessed with one cheque being made out when required, the group has indicated there is some guess work involved in this process.

There are 4 trustees but they have no meetings so it would appear that the staff run the 2 groups as 1 but with very little knowledge and support available to them. They have had 2 bank accounts in the past but at some point decided to pay all proceeds into the non charity account.

We have now set up a formal accounting procedure for them which involves retaining all relevant income and expenditure paperwork and ensures that they are now keeping two distinct records for the Charity and unincorporated group. Where would you suggest the group goes from here?

As an independent support organisation what is our position with regard to what we now know about this group, are we obliged to inform the Charity Commission about the situation? Would it be worth laying cards on the table to the Commission letting them know they are now getting things in order and ensure that thay have the necessary support to operate correctly from this point on?

Ideally the group would want to de-register as a charity and run as a Company Limited by Guarantee, but we have advised them to sort the above issues first before taking the next steps.

With regard to cheque and BACS signing I would appreciate some best practice comments please. A regional based charity with a turnover in excess of £1m with seven trustees.  Legal advice says that two trustees should sign all cheques over £200.  Given that trustees are spread far and wide throughout the region and are all busy people, this idea is hopelessly impractical. For charities say between £1m and £5m turnover, what would a good signing regime be?  And for really big charities when would such signing be taken on board by the senior members of staff?