Charities are failing to meet their legal requirements to report serious incidents such as fraud, theft and failure to protect vulnerable beneficiaries, the Charity Commission warned today.
All charities are required to report to the Commission any actual or suspect incident which could cause loss of money or assets, damage to the charity's property or harm to the charity's work, beneficiaries or reputation.
In the year to March 2014 there were 1,280 serious incidents reported to the Commission, compared to 971 incidents in the previous year. However the regulator says its case work continues to find serious incidents that should have been reported but were not.
“If trustees fail to act responsibly in relation to an incident, including failing to report, or not reporting promptly when the incident occurred, the Commission may consider this to be mismanagement and take regulatory action, particularly if further abuse or damage has arisen following the initial incident,” the Commission said.
The alert also points out that the potential reputational damage of an adverse incident can be mitigated if trustees are able to demonstrate that they acted responsibly in handling the problem. The Commission is reminding charities that, if asked by the media about an incident, the Commission will normally provide a statement acknowledging that trustees acted responsibly in reporting it.
The Commission said that charities face potential reputational damage if they fail to report an incident.
Michelle Russell, Head of Investigations and Enforcement at the Charity Commission, said: “We see cases where charities experience more serious problems down the line, including reputational damage, in part because trustees failed to report an incident to us in good time. So my message is: don't compound the problem that has occurred, help solve it by reporting it to the Commission.”