From 1st April 2016, OSCR has introduced a notifiable events regime, designed to help charities tackle problems promptly and effectively, and to provide OSCR with reassurance that charity trustees are fulfilling their duties.
Under the new regime, a notifiable event is an event which will have a significant impact on a charity. It is for the charity trustees to judge whether an event is sufficiently significant to be reported to OSCR, having regard to the size and nature of the charity. The events which OSCR considers should be notified under the regime are:
- Fraud or theft
- Substantial financial loss
- Incidents of abuse or mistreatment of vulnerable beneficiaries
- Not enough charity trustees to make a legal decision
- Criminal investigation or other regulatory investigation, including the imposition of sanctions or the raising of concerns by another regulator or agency
- Significant sums of money or property donated to the charity from an unknown or unverified source
- Suspicions that the charity and/or its assets are being used to fund criminal activity, including terrorism
New guidance from OSCR sets out more detailed descriptions of each of the events and examples are given of what would constitute a notifiable event and what information OSCR would expect to receive.
Although the notification of events is not a legal obligation, OSCR would have a concern if a significant event was not reported, particularly if that event had negative repercussions for the charity concerned or for the charity sector as a whole. Minor events, however, do not need to be reported to OSCR – charity trustees have to make a judgement call on whether any one event is significant to their charity in the overall context.
The expectation is that a notifiable event would be reported to OSCR as soon as possible after it has occurred (or come to the attention of the charity trustees), but OSCR appreciates that some events, such as fraud or theft, may have to be reported to the police or to another regulator before OSCR is informed.
Reports of notifiable events are to be made to OSCR by email to a dedicated email address (email@example.com) setting out the following information:
- What the event is and how it has (or may have) a serious impact on the charity
- What action (if any) has already been taken in response to the event
- What further plans the charity trustees have in place to deal with the event
- What plans the charity trustees have in place to mitigate similar future events
OSCR will acknowledge reports of notifiable events and decide whether follow-up action is required. The expectation is that in most cases OSCR will not require to take further action provided that it is clear that charity trustees are tackling the event appropriately, but further information may be requested from the charity in any one case.
OSCR does not expect to receive reports of notifiable events which have already been reported to the Scottish Housing Regulator or to the Charity Commission for England and Wales. Where a disclosure has been made to any other regulator, OSCR does expect a report.
Charities should not feel any diffidence in reporting notifiable events to OSCR. Instead of reflecting negatively on a charity, evidence that an event has arisen and is being properly tackled should be viewed positively, since it will hopefully point to good management of problems as they arise. Charity trustees bear responsibility for notifying events to OSCR under the new regime and it is important that charity boards have a clear understanding of the new regime and an awareness of the kinds of events which need to be reported to OSCR.