New guidelines advise charities on 'serious incidents'

1st March 2018

As Oxfam’s Haiti scandal continues to dominate the news, the Charity Commission says other charities could be at risk of damaging their reputations as too many serious incidents go unreported.

The regulator has issued improved guidance on what incidents should be reported – and how - in order to help charities deal with matters as soon as possible after they occur.

Kirsty McEwen, Head of the Charity and Not for Profit team at Higgs & Sons, said this week that while the guidelines offer clarity and advice, charities should consider seeking further support in establishing their own internal protocols to make sure serious incidents are brought to the attention of the trustees as soon as possible.

“A specialist lawyer is often a valuable source of help and support to charities, as a means of helping them to avoid serious incidents in the first place,” said Kirsty.

“The Commission says there is significant under-reporting of problems and the guidelines go some way to addressing the problem. However, it would be prudent for individual charities to be prepared for any eventuality. If a serious incident does occur having clear protocols in place can help to mitigate the risk to the charity and helps to show the Charity Commission you have been diligent in managing risk.”

The new guidance:

  • includes new tools, such as examples and checklists to make it clearer to trustees what they should, and should not, report to the regulator
  • provides greater clarity on incidents resulting in “significant financial loss”, making clear that losing significant funding or contracts that the charity can’t replace should be reported to the regulator
  • no longer requires trustees to report if their charity doesn’t have a safeguarding policy in place, as that information is now captured through the annual return.

The Commission says that reporting a serious incident to the regulator reminds trustees that they can limit reputational and actual harm to the charity and allows the Commission, if asked, to state that the trustees handled the situation responsibly.  The regulator also states that, if in doubt about whether to report, err on the side of caution.

A serious incident is an adverse event, whether actual or alleged, which results in or risks significant:

  • loss of your charity’s money or assets
  • damage to your charity’s property
  • harm to your charity’s work, beneficiaries or reputation

The most common type of incidents are frauds, thefts, significant financial losses, criminal breaches, terrorism or extremism allegations and safeguarding issues.

Serious incident reporting has been increasing steadily year-on-year since 2011-12 when 1,027 incidents were reported (compared to 2,182 in 2016-17), but the Commission continues to find events and problems in its case work that should have been reported to the regulator at an earlier date. The Commission also highlights that the reports can flag recurring issues or concerns in the Sector which can help them to assist charities and potentially prevent issues arising for other charities.

Kirsty added: “The new guidelines are comprehensive and cover many scenarios and offer a step by step guide about what to do if a serious incident occurs.

“It remains the responsibility of individual charities to be transparent and rigorous in their operation at all times. We welcome these new guidelines which will equip all charities with tools and checklists to make it clearer to trustees what they should, and should not, be reporting to the regulator.

For further information, guidance or advice contact Kirsty McEwen or a member of Higgs & Sons’ Charity and Not For Profit team on 0345 111 5050.


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