The Charity Commission is looking for responses to its proposals of how it will use its new power of issuing an official warning to charities and trustees.
It has outlined how the official warning power, which was given to the regulator in the Charities (Protection and Social Investment) Act 2016, will work in a consultation paper published today.
The regulator is asking charities, their advisers, other regulators (particularly those that exercise similar powers) and anyone else with an interest in the charity sector on its proposed approach to respond to the consultation.
It is asking for comments on four main points: the commission’s overall approach, how it will use this new power, how it will give notice and consider representations, and how it will publish official warnings.
Sarah Atkinson, director of policy and communications at the Commission, said: “The power to issue an official warning is an important new power for the commission to tackle misconduct and mismanagement proportionately and effectively.
“We are keen to ensure that the sector understands our approach and the important safeguards for charities. We hope that charities, professional advisers and other interested parties will respond to our consultation to further inform that approach.”
Regulator's use of power
The draft guidance states that the power will supplement the Commission’s existing powers for dealing with wrongdoing in charities. It will be able to issue an official warning when it considers there has been a breach of trust or duty, or other misconduct and mismanagement in the charity.
It can be issued to a charity trustee, or trustee for a charity, where it considers that they have committed a breach of trust or duty, or other misconduct or mismanagement. An official warning can also be issued to a charity, in connection with which the commission considers a breach of trust or duty or other misconduct or mismanagement has been committed.
A decision on whether to issue an official warning is based on the assessment of the risks, which involves taking into account factors including the level of financial loss to the charity; the likelihood of recovering any funds lost to the charity; the risk of harm to beneficiaries; and whether the misconduct or mismanagement was an isolated or repeated incident.
The draft guidance says that the Commission can publish an official warning, or the variation or withdrawal of an official warning. It would publish the warning along the same guidelines as it publishes statutory inquiries and regulatory case reports which state that the Commission would usually publish something with a few exceptions. These include it being detrimental to a particular individual or group of individuals, for example a risk to someone’s personal safety.
The consultation, available here, closes on 23 September 2016.
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