31. Reporting Serious Incidents

The annual return to the Charity Commission asks us to confirm that we have reported any serious incidents but have they defined what a serious incident is?

The guidance up to now has been that any serious incident that has resulted or could result in a significant loss of funds or a significant risk to a charity’s property, work, beneficiaries or reputation should be reported to the Commission immediately, not just on completion of the Annual Return.

What is the broad legal position on serious incidents?

The legal position is that charity trustees should provide information about serious incidents as soon as possible after they become aware of them. For charities with an income over £25,000 you must, as part of the Annual Return, confirm that there are no serious incidents or other matters relating to your charity over the previous financial year that you should have brought to the Charity Commission’s attention but have not.

Who do we report to if we aren’t a charity?

If you are an unincorporated association you have no regulator as such and therefore you will have to read these guidelines and then use your own judgment about how to proceed. For example, serious incidents of a criminal or fraudulent nature would be reported to the police and incidents or allegations of abuse to the local social services initially.

Isn’t there more specific guidance to help us?

Yes, the Charity Commission has issued guidelines (June 2008) to help trustees/management committee members decide if an incident warrants being reported or not.
The Charity commission suggest two approaches; the first is to use a series of factors in each case to help you assess the seriousness of the event; the second approach is to compare your incident to the examples given in the new guidance.

How does the first approach work?

With the first approach you use a series of factors to try to gauge the severity of the incident in relation to the size and character of your organisation. Some of the factors suggested are:

  • the proportion of assets at risk;
  • the public profile of the charity (for example if it is a household name);
  • the public profile of the serious incident (for example any media coverage);
  • the risk to the charity’s reputation and to the charity sector as a whole;
  • how far services have been withdrawn as a result of the serious incident;
  • the risk of further harm to the charity or its beneficiaries; and
  • whether the charity has been previously investigated or given advice and guidance on the issue.

What is the second method of assessing the seriousness of an incident?

The Charity Commission have also listed some specific circumstances that help you decide if an incident is considered serious or not. These are:

  • criminal activity;
  • connections to proscribed (banned) organisations (lists on the Home Office and Treasury websites);
  • charity links to or support for terrorism, financial or otherwise;
  • misuse of a charity to foster criminal extremism;
  • fraud and money laundering;
  • significant loss of property or funds;
  • large donations from an unknown source (of goods and shares as well as money);
  • abuse of vulnerable beneficiaries;
  • not having adequate measures in place to protect vulnerable beneficiaries;
  • being subject to an investigation by another regulator, such as Ofsted or the Health and Safety Executive;
  • sham charities, set up for illegal or improper purposes.

I have recently learned that there was a serious incident in the charity but the director never told the committee. How do we report something we don’t know about?

The responsibility for reporting serious incidents rests with the trustees, so you will have to make sure that senior staff do not withhold such information, unwittingly or otherwise. Organisations need some written guidelines that set out how the head of staff and the committee interact: what needs to be reported, what decisions the director can make without reference to the committee, how far the budget can be changed before it needs to come back to the committee etc. Such guidelines could be included in the director’s job description or be part of a separate document. Whichever way you chose to do it you should use these guidelines to make sure that your staff know what needs to be reported to the trustees so that you aren’t left in the dark again.

What should I do if I’m still not sure?

See the full guidance here http://www.charity-commission.gov.uk/library/rsinotes.pdf
Email: rsi@charitycommission.gsi.gov.uk
or call the Charity Commission on 0845 3000 218

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