Community accountancy is one of the most important parts of voluntary infrastructure. Community accountants provide a wide range of services for small voluntary and community organisations. These include courses and coaching on writing budgets, drawing up cash flows, full cost recovery, setting up book-keeping systems and financial controls, preparing financial reports for trustees and funders, preparing accounts for Independent Examination and Audit, PAYE, corporation tax and VAT.

Community accountancy enables good financial management and significantly reduces the risk of fraud. The Charities Act has introduced a wide range of regulations for charities, including fund accounting. Charities are given funding to spend on specific activities and the external scrutiny (audit etc.) tracks how these funds have been spent. This is very different from the profit and loss accounting of the private sector. It is not possible to go to a local college and study to be a treasurer of a charity. Community accountancy services are the only source of appropriate training for most voluntary organisations. These services are crucial for installing good financial management in the voluntary sector. Community accountancy has a major role in maintaining social cohesion because it is such a critical service for the formation and success of small community organisations.

The Finance Hub commissioned Community Accountancy Self Help (CASH) to work with the Community National Network CANn and Sheffield Hallam University to analyse the provision of Community Accountancy Services (CASs) in England and detail the strategic implications. The research found that:

• There are 80 CASs in England employing 105 full time equivalent community accountants.
• The distribution is very uneven: 26.5 community accountants in London but just 3 in South East England (excluding London).
• 24% of groups supported are from BME communities (three times as high as the proportion of people from ethnic minorities in the UK population).
• Across England well under 10% of groups in potential need of access to a CAS are able to get any CAS support.

The Finance Hub commissioned CASH and CANn to undertake further work including:

• An extensive tool kit for setting up a Community Accountancy Service available on www.communityaccounting.org
• A sub regional model for developing CASs
• A regional model for supporting CASs
• A paper on sustainability of CASs
• A paper on the business case for CASs
• Upgrading the CANn website including a map with directions to the nearest CAS
• A set of Quality Standards for CASs
• A set of Community Accountancy Competencies to identify the knowledge set

The background work has now been done to end the post code lottery and enable community accountancy to expand. Both rural and inner city communities have an enormous amount to gain from CAS which are a key to achieving the Capacity Builders vision that: “by 2014 all third sector organisations will be able to access high quality support that meets their needs when they need it”. Moreover, the business case showed that every £1 spent on community accountancy generates £5 in extra services and reduced tax evasion. Rarely can there have been a better case for funding a service.