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Posted 28 September 2017
Update on Serious Incident Reporting
Trustees have to report adverse incidents, both real and potential, to the Charity Commission. By this, we mean, broadly, anything that significantly risks either the reputation of your charity (or of charity in general) or its assets or beneficiaries. This regime, known as Serious Incident Reporting (SIR), has become an essential part of regulatory oversight.
Despite its importance, the regime has been criticised for lacking effectiveness, with trustees reportedly failing to raise the alarm when required. A national consultation in 2016 highlighted key areas for concern. Last week, the Commission published new guidance in an effort to improve understanding of the regime.
Here is a summary:
- We have all seen the “should” and “must” differential in modern Commission guidance (the latter being a legal requirement rather than merely best practice). SIR guidance was not as clear as it should be. The new version makes the distinction clearer.
- The mantra ‘if in doubt, report it’ was criticised for encouraging a culture of unnecessary reporting and a tick box mentality. It is true – charities need not report a leaky tap – and trustees should have faith in their decision-making capabilities. However, smaller charities appeared to welcome this approach. As a compromise, the Commission has kept the mantra but also drafted an examples table and a fraud checklist to assist trustees in their own assessment of the incident.
- Guidance now confirms that the statutory duty to report serious incidents exists exclusively within the context of the Annual Return (a ‘must’) for charities with an income of over £25,000 per year. We would still advise charities to report serious incidents as soon as is reasonably possible, regardless of income. It is still easier to do that, and have it noted by the Commission than to risk criticism for failure to do so.
- The Commission are often told that their language towards charities and trustees is abrasive (in fact, I sat in a room when a trustee made one such comment to the Chairman and CEO of the Commission in person!). This is said to damage relations between charities and the regulator. In response, the Commission has said that it will continue to encourage good practice and prompt reporting from all charities. It also says that charity representatives that communicate early can be supported effectively with pro-active advice and guidance.
- As proposed, the Commission has removed the criterion ’not having a safeguarding policy’ from the list of reportable incidents as this is now provided for within the Annual Return.
We should reiterate that unproven incidents should also be reported. Unsurprisingly, the Commission did not accept the submissions of respondents suggesting that they should not be reported until proven.
Serious incident reporting is serious – it is important that trustees and senior staff are aware of the new guidance. If you are worried that something serious has happened or is likely to happen, get in touch with the charities team on 01392 207020 or email: firstname.lastname@example.org