The current furore surrounding Oxfam has thrown many issues into the limelight, including how and when to report serious incidents to the Charity Commission.
Oxfam made a serious incident report (SIR) to the commission in 2011 regarding issues in Haiti, but has been criticised for not making clear in that safeguarding issues were involved or reporting other key aspects of the situation. So, whilst initially backed up by the commission in the press for making an SIR, it is now under formal investigation by the commission as to why it did not report matters more fully, and over its handling of the incidents and its impact on public trust. It is clear that if Oxfam had failed to make an SIR at all, they would be in an indefensible position with the Commission.
Serious incident reporting is required of all charities, as regulated bodies. Although charities should make an SIR as and when matters arise, a question on whether there have been any serious incidents is included in the annual return. The role of an SIR is twofold. Firstly, it gives the charity the opportunity to explain the facts and how it dealt with the situation. And secondly, it allows the Commission to advise and support the charity, and share lessons to be learnt with the wider sector (e.g. fraud alerts if the commission becomes aware that a number of charities are being targeted).
The Charity Commission has recently updated its guidance and risk framework. It considers that an SIR would be relevant where something results in or risks:
1. Significant loss of a charity’s money or assets
2. Damage to a charity’s property
3. Harm to a charity’s work, beneficiaries or reputation
In more detail it includes the following categories:
1. Financial crimes – fraud, theft and money laundering
2. Large donations from an unknown or unverifiable source, or suspicious financial activity using the charity’s funds
3. Other significant financial loss
4. Links to terrorism or extremism including “proscribed” organisations, individuals subject to an asset freeze or kidnapping of staff
5. Suspicions, allegations or incidents of abuse involving beneficiaries
6. Other significant incidents such as insolvency, forced withdrawal of banking services or actual/suspected criminal activity
The guidance makes a number of key points:
1. The obligation to report to the Charity Commission is additional to, and not a substitute for, reporting issues as appropriate to the police, safeguarding authorities and other regulators
2. A charity should report incidents when aware of them and not await the outcome of any potential police arrest, investigation etc.
The serious incident reporting regime is intended to act as a check to make sure charities:
1. Put in place appropriate procedures on fraud, safeguarding and other relevant risks to minimise the risk of such incidents arising
2. Take appropriate steps to deal promptly with incidents or allegations as they arise
3. Get support from the Commission
4. Can learn from the experiences of others
In the light of Oxfam’s experiences, charities should take this as an opportunity to:
1. Review their safeguarding procedures
2. Review their financial and fraud controls
3. Make sure such matters are more than paper policies and that an understanding of the reasons for and how to apply these are embedded in the culture of the charity
4. Ensure employment policies are up-to-date and reflect these obligations
5. Be ready to make a safeguarding report if required
If you need advice reviewing the issues raised in this article or any other issue get in touch either by telephone 01726 74433 or email email@example.com