The Charity Commission is investigating 12 charities that have failed to file their annual reports, accounts or returns for two or more years, its chief executive, Sam Younger, will announce today.
Speaking at the regulator’s annual public meeting in London, Younger will say that the commission has opened a "class inquiry" into charities that are "in default of their statutory obligations to meet reporting requirements by failing to file their annual documents for two or more years in the last five years".
The regulator has warned the defaulting charities that they could be referred to the police for prosecution if they do not comply.
In a statement, the commission said it would initially look at charities with last known incomes of more than £500,000 a year. This would include "charities that have submitted an annual return but failed to submit a trustees’ annual report and accounts – and vice versa," the statement said.
The commission will then move on to investigate any other charities that have failed to meet reporting requirements for two or more years.
The regulator said it had identified 86 charities with last known incomes of more than £500,000 that were in "double default".
As of 23 September, 12 of these charities, whose names will be revealed at the meeting this afternoon, had still failed to submit the required documents and were being investigated by the commission, the regulator’s statement said.
Of the remaining 74 charities, 16 had been dissolved by Companies House, 32 were in the process of going into liquidation or administration and two had ceased to exist, the commission’s statement said.
The remaining 24 charities either met reporting requirements after they were contacted by the commission, were already subject to existing compliance cases or had agreed to submit their missing documents within a set time, a spokeswoman for the commission said.
Before launching the inquiry, the commission contacted all the charities that had been identified as in default, requiring them to comply within a certain time or risk being investigated.
The commission then started its inquiry by issuing a "formal legal direction" to trustees, ordering them to meet the reporting requirements within a set time, the statement said.
"The regulator has put the trustees on notice that, should they fail to comply, it will make a referral to the police for criminal prosecution unless it is evident that the relevant trustees took all reasonable steps for securing compliance," the statement said.
The commission could also use its powers to appoint interim managers at the defaulting charities, and it might ask the trustees to pay for the costs of appointing the managers themselves.
Commenting on the announcement, Younger said the commission had already made clear its intention to become tougher on charities that defaulted on their reporting requirements.
"This latest enforcement step sends an unequivocal message that we will not tolerate charities that demonstrate contempt for the public they are accountable to by failing to meet reporting requirements"
He said that failure to meet reporting requirements was often the sign of mismanagement within a charity. "In some cases the excuses given by the charities are, frankly, poor," he added.