The Charity Commission should not be allowing charities to become CIOs if their reporting is not up-to-date, says Tania Mason.

Am I the only person who is astonished that the Charity Commission allowed Challenge to Change to convert to a Charitable Incorporated Organisation even though it was more than four months late filing its accounts at the time?

This is a charity with income of at least £250,000 – a significant sum - most of which is provided by institutional funders in the form of multi-year grants.  

The CC has few enough powers to enforce accounts submission on time - that's why the red box on the Register of Charities was devised.  So surely the regulator should take every opportunity it can to encourage a charity to get its reporting up to scratch?

When asked why the charity was allowed to convert, the Commission said that “late accounts do not impact the legal status of a charity that continues to operate, as a charity is prescribed by the Charities Act”.

This smacks of following the letter rather than the spirit of the law again, as it was accused of doing in the disastrous Cup Trust case.  The Commission could have withheld conversion to CIO structure until the accounts were filed, and then publicly announced it had done so once the charity had got its accounts in and successfully converted to CIO.  Sounds like a missed opportunity to me.

There was a time when the Charity Commission wouldn't provide any authorisations or legal orders unless accounts and annual return were up-to-date. If charities want something from the Commission they will soon get that sorted out.