The Charity Commission and Security Incident Reporting

There has been a development in charity regulation by the Charity Commission in recent years to transfer regulation and reporting onto charity trustees. This has, not surprisingly, coincided with cutbacks at the Charity Commission at a time when the role of charities has been expanding.

The key to imposing these extra burdens on charity trustees is the Charity Commission’s use of Section 60 of the Charities Act 2011 to ask questions. This statutory provision makes it a criminal offence for a person to knowingly or recklessly provide the Charity Commission with information which is false or misleading. The offence is wide enough to cover withholding information. The offence could potentially lead to a maximum fine or two years’ imprisonment – a sobering thought.

When the charity trustees complete their annual return they will see that Section 60 is cited and they are warned that a failure to properly answer the questions set could lead to a prosecution under that section. At the same time the annual return has been expanded to ask more questions such as whether there have been any serious incidents and questions about overseas funding, staff salaries, safeguarding of children and vulnerable adults, grant funding from government, whether trustees have resigned and then appointed as staff and whether any charity trustees are directors of a trading subsidiary. All of these questions have potential regulatory consequences depending on how they are answered.