Charity Compliance Update – October 2017

This month it’s all about reporting to the regulators.

Reporting serious incidents in charities – updated guidance for trustees

On 22 September the Charity Commission for England and Wales published a feedback and response document to its consultation around the reporting of serious incidents in charities. The consultation closed on 12 January 2017.

The feedback and response(s) covered the following areas:

  • Format, style and length of guidance welcomed – the new examples table was well received but larger charities, with existing risk assessment processes, found it less helpful.
  • Statutory basis of reporting – concerns had been raised over the ‘duty to report’ wording which implied a legal duty. The Commission has agreed to alter the wording to read ‘the Commission expects’ or ‘should’ instead. Further concerns over the ‘if in doubt, report it’ wording were rejected by the Commission and the wording has been retained.
  • Optimum timing of reports and multiple reporting – the Commission has said it will encourage good practice for all charities, regardless of size or income, in reporting serious incidents to the Commission promptly and acknowledge that immediacy may not always be achievable, by including the qualification, ‘as soon as is reasonably possible’, into the specific advice on when to report.
  • ‘Significant financial and other loss’ classifications – proposed to include the withdrawal of funding, litigation costs and banking services. The Commission will:
    • retain the proposed requirement to report financial loss, where this threatens the charity’s ability to operate and serve its beneficiaries, or where the charity’s financial reserves are not sufficient to cover the loss.
    • retain loss of banking services as a new classification to best protect charity funds and afford the Commission adequate sector oversight.
  • Updated wording on unverified donations – the Commission will refine the classification to include the word ‘significant’ and qualify it to where donations ‘cannot’ be verified and ensure that trustees are directed to the Commission’s Compliance Toolkit for more detailed guidance on due diligence and verification.
  • The Commission’s safeguarding remit – see the link to the full consultation below to read all seven responses by the Commission to this area.
  • Impact of negative media attention – the Commission is to include the words ‘serious’ or ‘significant’ in the reporting guidance in order to be proportionate and encourage meaningful compliance.
  • What happens after reporting? In response, the Commission will continue to ensure a timely acknowledgement of receipt is issued to all reporting charities and a standard reporting form will be developed, offering vital information prompts, in order to ensure trustees submit the essential detail needed

Read the full consultation and response documents here.

Authorising advisors to file charity accounts

In a move to ensure that all future filings are fully electronic, the Charity Commission for England and Wales updated their guidance on 9 October around how to authorise a charity advisor to submit accounts.

The guidance covers the following key areas:

  • How to authorise an advisor (for charities)
  • How to register for the service and file (for advisors)

Ensure you are up to date with the latest filing process here.

Annual return guidance updated

On 6 October 2017 the Charity Commission for England and Wales updated their guidance for preparing a charity’s annual return.

The guidance update includes reference to the consultation feedback in relation to serious incident reporting (see above).

Worthwhile making sure that your staff and clients are aware of any changes.

OSCR Trustees’ Annual Report guidance

The Office of the Scottish Charity Regulator (OSCR) has released a video providing guidance around how to create an effective Trustees’ Annual Report.

Full written guidance is due to be published later in 2017.

Why not bookmark our previous two-part article advising what to include in a charity’s Trustees’ Annual Report?

Converting to a Charitable Incorporated Organisation (CIO)

Secondary Legislation to enable charitable companies and Community Interest Companies to convert into CIOs was laid before Parliament on Thursday 14 September 2017. Subject to Parliamentary approval, phased implementation of CIO conversions could begin from January 2018.

Read more here.

Consultations round-up

Here’s our monthly round-up of (and links to) key consultation opportunities and those closed, pending feedback.

The following consultations are currently open and inviting a response:

  • Charity Tax Group – Potential new Welsh taxes – opened 5 July 2017. The Welsh Government Finance Secretary will suggest that taxation could be used to change behaviours or to discourage activity which has negative social impacts. Email FinancialReformMailbox@wales.gsi.gov.uk to get involved. A shortlist of ideas will be considered in Autumn 2017
  • Charity Commission for England and Wales Annual return 2018 – opened 1 September 2017, will close 5pm on 24 November 2017. Changes to apply to charities’ financial years starting on or after 1 January 2018.
  • OSCR – Fundraising draft guidance consultation – opened 7 September 2017, will close 1 December 2017. The response is split into parts:
  • Online usability questionnaire
  • Content questions and response form (scroll down to access)

The following consultations are closed with feedback analysis pending – watch this space for an update in future briefings:

“The Commission had planned to publish an analysis of the consultation in early August. However, the high volume of submissions means it has not been possible to prepare the analysis in that timeframe. We will continue our work on the review and plan to publish our analysis later in 2017.”

Article as published by Accounting Web October 2017