New guidance on Serious Incident Reporting – Understanding responsibilities as Trustees

From recent cases and charity failures the Charity Commission firmly believes there is significant under-reporting of problems by charities, putting charities at potential risk of further harm, including reputational damage.

By reporting a serious incident trustees demonstrate that they are taking appropriate action. Trustees can limit reputational and actual harm to the charity and in the case of an incident escalating it could encourage the Commission to lend support to the trustees have they handled the situation responsibly.

The Charity Commission has issued improved guidance “How to report a serious incident in your charity”, to help charities report appropriate matters as soon as possible after they occur.

The guidance provides a reporting checklist so trustees can ensure that all necessary information has been provided to the Commission.

A serious incident is any adverse event (actual or alleged) which leads or could lead to loss of or damage to charity assets or property or harm to beneficiaries or work of the charity. Most incidents reported involve financial loss or safeguarding issues but all serious incidents must be reported regardless of their nature. The type of incidents to be reported are set out in the ‘how to report’ section of the guidance.

Incidents must be reported promptly and must be reported even if the police or other regulator have been informed. Although the reporting of a serious incident may be carried out by an employee or adviser of the charity, it is the trustees who are responsible for ensuring this takes place. It’s worth bearing in mind that as part of the Annual Return there is a declaration that there were no serious incidents in the previous financial year that should have been reported to the Commission but were not. Trustees will be aware that making a false declaration is an offence under section 60 of the Charities Act 2011.

The new guidance:

• Includes new tools, such as examples and checklists to make it clearer to trustees what they should, and should not, report to the regulator.
• Provides greater clarity on incidents resulting in “significant financial loss”, making clear that losing significant funding or contracts that the charity can’t replace should be reported to the regulator.
• No longer requires trustees to report if their charity doesn’t have a safeguarding policy in place, as that information is now captured through the annual return.