Significant rise in number of serious incidents reported to the Charity Commission

The regulator's annual report shows it received reports of 1,280 incidents in 2013/14, up from 971 in the previous year

Charity Commission
Charity Commission

The number of serious incidents reported by charities to the Charity Commission rose significantly in 2013/14, the regulator’s annual report shows.

The document, published by the commission yesterday, shows that the regulator received reports of 1,280 serious incidents, which included fraud, theft, suspicions of links with terrorism or allegations of abuse involving vulnerable beneficiaries, compared with 971 in the previous year.

Charities must report such incidents to the regulator and they must confirm in their annual returns that they did not experience anything that should have been brought to the commission’s attention.

"Serious incident reports are an important way for us as regulator to identify and assess the nature and scale of risks facing charities," the annual report says. "We assess carefully all serious incident reports that are submitted to us to decide what action, if any, we need to take as regulator. In some cases, we may need to take action ourselves; but in most cases, we check that the trustees are handling the incident properly and responsibly, and we help ensure the charity is protected for the future."

The accounts also show that the regulator opened more than four times as many statutory inquiries in 2013/14 as it did the previous year.

The commission, which has been heavily criticised over the past year by the National Audit Office and MPs on the Public Accounts Committee for failing to make greater use of its statutory powers to tackle the abuse of charitable status, said it opened 64 statutory inquiries in 2013/14, compared with 15 in the previous year.

The commission concluded 23 inquiries in 2013/14, compared with five in the previous 12 months. It also opened 1,865 operational compliance cases in 2013/14, up from 1,513 in the previous year.

It received 6,661 registration applications, compared with 5,949 in 2012/13. It approved 4,968 applications for registration in the past year, up from 4,714 in the previous 12 months.

The document says that the comptroller and auditor general, who is responsible for auditing the regulator’s accounts and reporting the results to parliament, gave only a qualified opinion on the accounts this year because of a "technical accounting breach".

The regulator had an excess capital spend of £150,000 because it estimated that some of its spending on a new electronic case-management system would be classed as revenue expenditure, but then decided, after discussions with the National Audit Office, that it should have been put down as capital spend. This decision came too late for it to transfer funds from revenue to capital to cover the difference. 

The accounts say that the commission was "reviewing how our IT and finance teams work together in future to prevent this reoccurring".

A commission spokeswoman said: "It’s important to note that our revenue underspend of £320,000 exceeds the capital overspend of £150,000, so we have remained within our overall resource envelope.

"This is commonly referred to as a ‘technical breach’ in the sense that it does not reflect more widely on the commission’s financial management."

William Shawcross, chair of the Charity Commission, said in a statement that the report examined a "difficult year for the commission".

"We have faced external criticism and continued serious pressures on our resources," he said. "Despite this, the commission has made significant improvements: these include stepping up our investigatory case work and improving our ability to identify concerns in charities.

He said he was confident the regulator would continue to improve under Paula Sussex, who joined the regulator last week as chief executive.

- This story was corrected on 11 July 2014. It originally said that there were 596 serious incidents reported to the commission in 2012/13; the regulator clarified that this referred to the number of reports, which gave rise to 971 incidents being recorded. The commission has changed the way it reports those figures since last year.

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