Charity Commission consults on reporting of serious incidents

The Charity Commission has launched a three month public consultation on proposals to update its guidance on how charities should report serious incidents, which provides examples around the reporting of incidents of significant financial loss

The regulator says the number of incidents reported has increased year on year since the reporting regime was introduced in 2007, and stood at over 2,2000 in 2015-16. However, casework continues to find serious incidents that should have been reported but were not. The commission is also asked on a regular basis by charities for advice on what to report, how and when.

Listing the most common types of incidents, the guidance explains what should be reported to the Commission (as well as to the police and other regulators). New checklists and a table of examples of what, and what not, to report to the Commission are included

The main categories of reportable incident are: financial crimes – fraud, theft and money laundering;   large donations from an unknown or unverified source, or a suspicious financial activity using the charity’s funds; links to terrorism or extremism;  suspicions, allegations or incidents of abuse involving beneficiaries;  and actual or suspected criminal activity which involves or affects the charity.

The draft updated guidance for trustees is designed encourage reporting at the time the incident occurs, or as soon as possible afterwards. There is an updated section to help with multiple reporting for larger charities, or those that report incidents on a regular basis, due to the risks arising from the nature of their work.

It adds some new types of incidents, which it says charities are experiencing on a regular basis and/or struggling to manage properly. These include examples around forced insolvency; the winding up of a charity; and the withdrawal of banking services.

It also expands the examples in the guidance around incidents of significant financial loss, including losses affecting solvency; significant fines and penalties from HMRC and other agencies; losses arising from litigation; and losses resulting from the loss of funding.

In addition, the guidance removes the need to report some types of incident, where these are risks rather than serious incidents, and where the relevant information about the risk is now requested in the annual return.

Michelle Russell, the Charity Commission’s director of investigations, monitoring and enforcement said: ‘We welcome comments from across the charity sector and a range of stakeholders on the proposed updates to the guidance.

‘We hope that that this improved guidance will raise awareness of the need to report serious incidents and help trustees identify how and when to make a report to the Commission. Our advice is - if in doubt, report it and take steps to prevent problems happening again.’

The consultation closes on 12 January 2017.

‘What to do if something goes wrong: reporting serious incidents’ draft is here.


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