When should charities make ‘serious incident reports’ to the Charity Commission?

Sarah Furness, Partner

Although there is no statutory obligation on charities to report ‘serious incidents’ to the Charity Commission, charities with income of over £25k per annum must file annual returns with the Charity Commission and one of the mandatory questions to be answered is ‘have you reported every serious incident which you should have done?’. Further, a charity is not relieved of the expectation to report serious incidents just because they are not required to file annual reports with the Charity Commission.

It is a criminal offence to provide false or misleading information to the Charity Commission (in the annual return or otherwise) and failing to report ‘serious incidents’ could also lead the Charity Commission to accuse the Trustees of a charity of mismanagement. In practical terms, the Charity Commission is more likely to intervene if a charity’s failure to report ‘serious incidents’ leads to bad press – for the charity and them...

The guidance makes it clear that a serious incident report should be made promptly by the Trustees of a charity (or by some-one whom they have appropriately delegated to) where a serious adverse event occurs, whether actual or alleged, which results in or risks significant:

• harm to a charity’s beneficiaries, staff, volunteers or others who come into contact with a charity through its work
• loss of a charity’s money or assets
• damage to a charity’s property
• harm to a charity’s work or reputation

Usually, you would certainly expect incidents to be reportable where there has been significant harm caused to beneficiaries or others, where a crime has occurred, any links or suspected links to terrorists or extremists, and where there has been suspicious financial activity including a large unverifiable donation. If you are not sure whether to report a serious incident, erring on the side of caution can sometimes be seen to best practice and there is a straightforward online form for charities to complete. Not only must charities report the incident, they must also say what they have done to limit the impact of the incident and to stop such an incident happening again.

Alternatively, making the Charity Commission aware of the incident in some other way can also be advisable if an incident is not necessarily reportable but the Trustees are keen to be as open as possible with the Charity Commission. It is worth remembering however that there is a balance to be gained here because if a charity is making regular reports/contact unnecessarily, this in of itself may cause the Charity Commission to intervene and consider if there is a wider cultural or mismanagement problem within a charity. Any decision not to report must be justified and documented and ideally there would be a formal policy in place setting out what the charity considers to be reportable and how decisions will be made, documented and actioned.

Finally, it is of note that there may be other regulators (or indeed the police) whom charities need to also make aware of serious incidents, for example, the local authority, Ofsted or the CQC, where there are safeguarding issues.

Please contact us if we can assist.