External regulation and internal control in the charity sector
The thesis comprises an analysis of the regulation of the charity sector and its managerial implications, focusing on internal control. The thesis begins with an introduction which outlines the aim of the thesis, research design and method, and is divided into four further interlinking but self contained chapters with appendices. The second chapter reviews the definition problem of charity; the debates on politics, convergence and religious influences; a critical evaluation of the Salamon and Anheier hypothesis; the problem for statistical analysis and new developments. The third chapter places charity into an historical, political and economic context; the 'spirit' of charity is reviewed; the emergence and dismantling of the statutory welfare state is discussed and the policy implications for the future direction of charity. The fourth chapter looks at the history of charity regulation and the events which led to the establishment of the permanent Charity Commission. The 1987 criticisms are considered from the perspective of how much was the Commission itself to blame. The new system of regulation and the charity accounting standard are described and appraised against theoretical perspectives. International comparisons are made and the British system evaluated. The fifth chapter looks at the regulatory focus, the charity trustee. The role of the trustee is considered against the new legislation and managerial perspectives of the ideal trustee are considered. Liability and risk considerations, we argue, inevitably focus on an evaluation of control systems. The absence of information on control functions in charities is considered and why a survey was deemed necessary. A synopsis of the findings in 1991 and their relevance in 1995 is discussed, which offers comfort and concerns about internal control in the larger charities. In the appendix are the full results of the 1991 Internal Audit Survey and the European Survey of Audit, Accounting and Supervision Practices. The Conclusion provides a combination of practical suggestions for improvements of internal control in charities and suggestions for the Charity Commission as it embarks upon a more pro-active role. Future directions for research in this field are recommended.