Serious incidents reported to the Charity Commission rose by almost 70 per cent in past year

The number in the year to August 2015 increased to 2,129, compared with 1,264 the year before

Charity Commission
Charity Commission

The number of serious incidents reported to the Charity Commission went up by almost 70 per cent in the past year, the regulator’s Tackling Abuse and Mismanagement Report, published today, has revealed.

The number in the year to August 2015 rose to 2,129, compared with 1,264 in the same period the year before.

Of these, 417 were over financial mismanagement or abuse, 1,042 involved concerns about current or historic safeguarding, 11 were connected to terrorism, 130 to serious governance concerns and 16 to fundraising.

The regulator said in the report that it had strengthened its approach, revealing it had used its legal powers 1,200 times compared with 790 in the year before – a 52 per cent increase. However, the the overall number of cases it dealt with fell to 1,569 from 2,024 in 2014/13

The number of statutory inquiries went up by two-thirds, from 64 in 2013/14 to 103 this year, while the number of compliance case dropped from 1,865 to 1,024 – a 45 per cent decrease .

This year’s report focuses on helping trustees deal with dominant figures in a charity. This follows the collapse of the children's charity Kids Company, which has been linked to the dominant role played by its founder and chief executive, Camila Batmanghelidjh. 

Michelle Russell, the commission’s director of investigations, monitoring and enforcement, said: "It is important that we identify the cultures and behaviours that prevent trustees collectively from doing a good job, and share these insights with trustees."

She said the influence of dominant individuals could be one of the "underlying factors" hindering good governance.

"Strong leadership is important, and often charities rely on the passion, drive and volunteer time of key individuals but when they are allowed excessive power or influence within a charity, the other trustees are likely to disengage, fail to contribute to or challenge ideas or decisions," she said.

 "This can also lead to serious problems for the charity, including unmanaged conflicts of interest or unauthorised personal benefit." 

The report also shows that concerns about financial abuse, financial crime and financial mismanagement continue to feature heavily in the commission’s compliance case work. Concerns about financial abuse or financial mismanagement, such as fraud or theft, featured in 42 of the 53 investigations (comprising both statutory inquiries and regulatory compliance cases) concluded in 2014-15 and concerns about financial management featured in 398 completed compliance cases (of a total 1,125 cases). 

"The effect of these problems is almost always that money intended to help beneficiaries is lost or misapplied," Russell said.

"We as regulator are doing more to proactively identify concerns about financial mismanagement in charities, for example through our programme of themed reviews of charities’ financial accounts."

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