05 September 2014
The Charity Commission has issued an alert to charities, reminding them of their duty to report serious incidents to the regulator.
In the alert, the regulator has said it believes serious incidents are under-reported, preventing the Commission from assessing the true scale and nature of risks facing charities and putting some charities and their work at risk where the trustees need assistance to handle them.
The Commission defines an incident as serious if it risks or results in significant loss of a charity's money or assets, damage to a charity's property or harm to a charity's work, beneficiaries or reputation. The most common types of incidents reported include fraud, theft and confirmed safeguarding issues.
In 2013-14, there were 1,280 serious incidents reported by charities to the Commission, which the regulator says is an increase on the previous year (971 incidents were reported in 2014-13). However, the regulator’s case work continues to find serious incidents that should have been reported but were not.
The Commission has also taken this opportunity to clarify its position on regulatory action should trustees fail to report a problem. If trustees fail to act responsibly in relation to an incident (including failing to report, or not reporting promptly when the incident occurred), the Commission may consider this to be mismanagement and take regulatory action, particularly if further abuse or damage has arisen following the initial incident.
The regulator also adds that the potential reputational damage of an adverse incident can be mitigated if trustees are able to demonstrate that they acted responsibly in handling the problem. Charities are being reminded that, if asked by the media about an incident, the Commission will normally provide a statement acknowledging that trustees acted responsibly in reporting it.Head of Investigations and Enforcement at the Charity Commission, Michelle Russell says: ‘I urge trustees of all charities to read and follow the guidance we have issued today and to report incidents to us as soon as they occur. Reporting incidents is a basic part of responding responsibly to a problem in a charity. We see cases where charities experience more serious problems down the line, including reputational damage, in part because trustees failed to report an incident to us in good time. So my message is: don't compound the problem that has occurred, help solve it by reporting it to the Commission.’