Articles

In the midst of the immense strategic and financial challenges charities are currently tackling, it might be easy to overlook the requirement to report serious incidents to the Charity Commission. It can also be a difficult judgement call as to whether an incident qualifies as serious and therefore needs to be reported, and, as just one of many difficult judgement calls charities are facing at present, the question of whether or not to report an incident could be lost in the melee. In recognition of Covid-19 confusion, the Commission has produced new guidance to clarify reporting requirements in the specific circumstances of the pandemic.

The new guidance

Charities are still required to follow the Commission’s main guidance on serious incident reporting, but the new guidance is supplemental to it and also includes an examples table which describes incidents related to Covid-19 and whether or not they need to be reported. Amongst other examples, the table clarifies that none of:

• the temporary cessation of operations or closure of facilities in response to the Government’s lockdown measures;
• the loss of a substantial portion of the charity’s income during this period; or
• the decision to furlough some or all of the charity’s staff

are reportable serious incidents unless one or more of such actions leaves the charity:

• unable to deliver vital services to at risk beneficiaries; and/or
• insolvent or forced to close permanently; or
• highly likely to be insolvent and/or forced to close permanently within the next 12 months.

Other examples of note include that a charity does need to report if:

• there is an outbreak of coronavirus within the charity (i.e. not just an isolated case) that prevents the charity from delivering vital services to at risk beneficiaries or continuing its normal operations; and/or
• a member of staff alleges that they have suffered significant harm due to their working conditions during the pandemic.

Is an incident significant?

It is still a matter for charity trustees to exercise their judgement in deciding whether an incident is significant in the context of their charity, taking account of the charity’s staff, operations, finances and/or reputation. Regarding financial losses, the guidance particularly notes that the Commission usually expects charities to report any financial losses that do not involve a crime where they exceed either £25,000 or 20% of the charity’s income: these thresholds do not apply, however, when considering financial losses related to the pandemic, in respect of which trustees should focus on the significance of the impact of the losses, rather than the amount lost.

Other points to remember

• Charity trustees may delegate the responsibility for deciding whether or not to report an incident, but the trustees must be informed of the decision, as they remain ultimately responsible for it.
• If it is decided not to report an incident, a record of the decision and the reason(s) for it should be kept.
• Serious incident reports should be submitted, using the Commission’s online form, as soon as is reasonably possible after the incident or when the charity becomes aware that a significant harm or loss is highly likely.

We are here to support you with all aspects of dealing with serious incidents, including whether or not they need to be reported, the preparation of such reports as are necessary and, as required, the management of incidents themselves.

Links to Charity Commission guidance:

• Reporting serious incidents to the Charity Commission during the coronavirus pandemic
• Supplementary examples table
• How to report a serious incident in your charity

For more information, please contact Jayne Adams at [email protected] or Benjamin James at [email protected]