ISTOCK/ DILOK KLAISATAPORN
FINANCE
Insights on the Dramatic Reduction in CRA Charity Audits
I
BY MARK BLUMBERG
recently read on a blog with some statistics relating to the number of audits that the Charities Directorate of CRA was conducting each year. Frankly, I could not believe the numbers, so I wrote to CRA to ask them for up-todate information. Here is the response I received from the Charities Directorate: Please find attached a table containing the number of completed audits of registered charities for the 2020-2021 fiscal year, as well as the completed audits for the last ten fiscal years. These audit statistics are reported by fiscal year, from April 1st to March 31st. As you will note, the number of completed audits for the 20202021 fiscal period differs from the audit statistics you referenced. This was an oversight on our part and we have shared the revised table with the other implicated parties. While you may note a decrease in formal charity audits, the CRA has actually increased its compliance coverage through other initiatives. As part of its ongoing efforts to ensure charities meet the requirements of registration, the Charities Directorate uses a multi-streamed approach to compliance. This involves various audit and non-audit interventions, depending on a registered charity’s risk of non-compliance: ❯ Non-audit interventions focusing on early education provide charities with the opportunity to resolve lower-risk cases of 38
FOUNDATION Magazine
January/February 2022
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non-compliance before they get worse. Audits are reserved for isolated cases where charities demonstrate a risk of engaging in more serious non-compliance.
Balancing its compliance program in this manner allows the CRA to: ❯ increase the overall number of registered charities with which the Charities Directorate interacts before enforcement action is required; ❯ address lower-risk non-compliance among a broader segment of the charitable sector through education or compliance agreements; and, ❯ dedicate its audit resources to those registered charities that demonstrate a higher risk of engaging in more serious noncompliance. In addition, all charity audits were put on hold on March 16, 2020, due to the COVID-19 pandemic. In line with the CRA’s business resumption plan, high-risk audits, meant to address the most serious non-compliance, resumed in July 2020, with remaining charities-related compliance activities having fully resumed in September 2020. For more detailed information and statistics about the CRA’s Charities Directorate’s programs, go to Reports on the Charities Program. foundationmag.ca
