29 Mar 2018

When and how a serious incident should be reported.

The Charity Commission has produced revised guidance on how charities should deal with serious incidents. This guidance clearly sets out when and how a serious incident should be reported and provides examples of the types of events that should be considered a serious incident.

The updated guidance followed consultation with the sector and seeks to address the Commission’s own concern that there is significant underreporting of serious incidents by trustees unclear of their duties or the process.

The guidance begins by summarising that a serious incident is “an adverse event, whether actual or alleged”, which results in or poses a risk of significant loss of money or assets, damage to property or harm to a charity’s beneficiaries, work or reputation. It goes on to list some of the instances that may give rise to a serious incident including financial crimes.

As those with overall responsibility for a charity, the duty to report a serious incident falls on the trustees collectively. Any individual trustee making the report will need to declare that they have the requisite authority and are acting on behalf of the board. Any delegated executive or professional advisor will also need to confirm they are acting with the board’s authority. It is for this reason that the Commission’s guidance provides separate signposting for instances of whistleblowing.

The guidance recommends that incidents are reported promptly, which the Commission considers to be “as soon as reasonably possible…or immediately after you become aware of it”. This is in addition to the duty of charities with an annual income of over £25,000 to confirm as part of their annual return whether there have been any serious incidents that should have been reported to the Commission.

A certain amount of time for appropriate fact-finding is acceptable and a staggered approach, whereby trustees make an initial report with further detail to follow may be appropriate. However, the Commission is clear that reporting an incident allows it to support charities; ensuring trustees are complying with their legal duties in mitigating the impact of the incident, putting processes in place to prevent such events recurring and for the charity and Commission to demonstrate and uphold confidence in the sector. The guidance also encourages trustees to take a joined-up approach with police involvement where the incident involves criminal behaviour or notifying other relevant regulators, such as the Information Commissioner in the event of a significant data breach.

With the current scrutiny facing the aid sector it seems a timely reminder for charities more generally to be aware of the guidance on reporting serious incidents and to understand that this covers a range of events and activities – it is not just limited to safeguarding failures. Speaking at a safeguarding summit in early March the new Chair of the Charity Commission, Baroness Tina Stowell, reported that the rate of serious incident reporting had doubled in recent weeks.

The Commission’s guidance is available here.