The CFG has responded to a commission consultation, which closed last week, on new guidance for serious incidents, which adds new examples to the list of events that should be reported to the regulator.
The draft guidance, published in October, defines a serious reportable incident as "an adverse event, whether actual or alleged, which results in or risks significant loss of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", such as significant financial losses or criminal behaviour within the charity.
But the CFG says in its response that it is not clear why some of the examples that have been added to the list of incidents are considered serious and reportable, because they might not necessarily have been caused by trustee failure.
These new additions to the list include negative media attention, the loss of banking services and loss of funds due to unsuccessful litigation, all of which the CFG says would not automatically constitute a serious incident.
The new list also includes loss of public funding or key delivery contracts, which the CFG argues in the current volatile funding environment would lead to a deluge of reports.
"We are concerned that, in some areas, the new guidance seeks to focus more on operational matters which are not directly related to trustees fulfilling their legal obligations but are merely ‘of interest’," the CFG response says.
"It is important that the Charity Commission focuses on its core obligations to ensure that trustees understand and follow the law, rather than seeking to shape the operational decisions that trustees make in furtherance of their charitable purposes."
The law firm Bircham Dyson Bell says in its response to the consultation that the guidance is misleading because it suggests there is a legal duty for charities to report serious incidents separately from their annual reports. It also says the new guidance is less clear in places than the existing version.
"In particular, the draft suggests there is a duty on charity trustees to report serious incidents, whereas the relevant duty is to complete the annual return," the response says.
"It is misleading to suggest there is an ongoing free-standing duty on charity trustees to report serious incidents. The current guidance is clear on the legal position."
The law firm also criticises the draft guidance for focusing on the commission’s relationship with the media when explaining why SIR is necessary, which it says "risks giving the impression that serious incident reporting is media-driven" rather than part of the regulator’s role.
BDB also praises the inclusion of a checklist for trustees of all the information they need to include in an SIR on fraud, but calls for the commission to produce a similar checklist to cover all kinds of reportable incidents.
Both the CFG and BDB welcome plans to drop some parts of the guidance, including the section that tells charities to report a lack of vetting procedures designed to ensure trustees and staff are eligible for the roles they’re appointed to.
The National Council for Voluntary Organisations' response agrees with the additions to the list of examples of serious incidents, but says they should be considered serious only if the financial loss to the charity is significant enough to put the charity’s financial resilience at serious risk.
It says a loss of banking services should be considered reportable only if the charity is unable to secure new services or loses all banking services, and media attention should not automatically be considered a serious incident.
A commission spokesman said the regulator was pleased with the number of responses to the consultation and would be publishing a report in response in the next few months.