Charity regulators consult on disqualification powers, reporting problems

The Charity Commission has opened two completely separate consultations, one wanting views on its use of the new trustee disqualification power, the other a joint process with the two other UK charity regulators on a revised list of ‘significant matters’ that auditors and independent examiners must report.

Power to disqualify trustees

The new power of discretionary disqualification for the Charity Commission (England and Wales) will allow it to “disqualify certain persons from being trustees in circumstances where they are judged not fit to act, for a period of up to 15 years”. The power is due to be available soon – see ‘New charity law provisions from July‘.

The consultation paper

sets out its approach and the factors it will take into account before making a disqualification order, together with the protections for individuals affected and the important safeguards that exist in law.

More in the Commission’s news item or go direct to the consultation pages. Responses by 22 August.

Reporting of matters of material significance

This consultation proposes a new list of material matters to be reported to the regulators. It follows the establishment of the Charity Commission for Northern Ireland and takes account of regulatory experience to date – quite clearly the problems of Kids Company have been a spur here.

The proposals drop one of the existing eight reportable matters but adds three, giving a total of ten in the new set.

Civil Society News coverage highlights that a key proposal is a change to the wording, so that auditors should report “material” instead of “significant” risks concerning issues that present a “risk to charitable funds or assets”.

An article from Charity Finance Group includes:

While CFG thinks that the proposals in the consultation will help to increase consistency in language between reporting matters of material significance and the SORP, we are concerned with how the Commission will use the information it receives from auditors or independent examiners.

Any wording that is changed would need to go alongside greater clarity from the Charity Commission, OCSR and CCNI about the kind of issues that mark out charities as being regulatory risks. With increased budget cuts to regulators there is also a danger that regulators will not be in a position to use and act upon the increased information they receive.

It is anticipated that the new guidance will be issued by the end of 2016.

Charity Commission news release and consultation page, Charity Commission Northern Ireland’s version, or the slightly shorter Scottish one from OSCR. This is the first time that CCNI has joined in such an exercise.

The consultation runs to 11th September.

New OSCR reporting address

OSCR has set up a separate email address to allow auditors and independent examiners to make confidential reports. See OSCR news item.

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