Regulator publishes guidance for charities on statutory inquiries and regulatory compliance casework

(1st April 2010)

The Charity Commission, the independent regulator of charities in England and Wales, has today published two new sets of guidance for charities and their advisers on statutory inquiries and regulatory compliance casework.

The new guidance, available on the Commission’s website, aims to help charities understand better what it means when the Commission conducts investigations into charities, either through a statutory inquiry or a regulatory compliance case.

The Commission opens statutory inquiries under section 8 of the Charities Act 1993 only in cases of significant risk and serious regulatory concern. The decision to do so is not taken lightly and only where there is evidence or serious suspicion of misconduct or mismanagement and/or risk to property. It is the Commission’s policy in most cases to publish a Statement of the Results of an Inquiry when it has concluded.

A regulatory compliance case is a non-statutory investigation which is opened where the Commission has concerns about a charity but where the risk is more limited. The Commission is usually able to work with the trustees to resolve concerns through supervision and by providing regulatory advice and guidance, without the need to intervene by using its powers. Where there are relevant issues for other charities, or where there has been a high level of public interest, the Commission publishes a regulatory case report when these cases are concluded.

The Commission applies a risk-based and proportionate approach to its compliance work based on the framework published in 2008. This means that any regulatory action the Commission takes will be evidence-based and proportionate, fair and reasonable, taking account of the seriousness of the issue, the risk involved to the charity and its beneficiaries and the capacity of the charity to comply. The framework also sets out the criteria the Commission uses when deciding whether to open an investigation.

As a modern regulator the Commission gives emphasis to providing support and guidance and promoting good practice as well as ensuring that charities are accountable, well run and meet their legal obligations. However, charities must comply with the law and deliberate wrongdoing, illegal activity, criminality, and serious abuse will be dealt with rigorously and decisively.

Andrew Hind, Chief Executive of the Charity Commission said:

"Charities and their advisers must understand the seriousness with which the Commission undertakes an investigation into a charity, whether it is a statutory inquiry or a regulatory compliance case. Trustees need to be absolutely clear from the outset of their responsibilities and our expectations and procedures.

 

The behaviour and level of co-operation of trustees during some investigations has fallen well below what we would expect given the seriousness of the concerns at stake. I hope this guidance will reinforce the importance of charities under investigation engaging seriously with the Commission."

When the Commission investigates a charity it will now send to the trustees either the guidance on statutory inquiries or the guidance on regulatory compliance casework, depending on the type of investigation opened. Each section has a topic heading under which the Commission answers relevant questions that a charity or their advisers might raise about how the Commission deals with statutory inquiries or regulatory compliance casework.

The two new sets of guidance, Regulatory Compliance Casework – Guidance for charities and their advisers (CC45) and Statutory Inquiries into Charities: Guidance for charities and their advisers (CC46) supplements other information about the Commission’s compliance work that can be found on the website at www.charitycommission.gov.uk.

End.

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PR 30/10

Notes to Editors

1. The Charity Commission is the independent regulator of charities in England and Wales. See www.charitycommission.gov.uk for further information or call our contact centre on 0845 300 0218.

2. Our mission is: to ensure charities’ legal compliance, enhance charities’ accountability, encourage charities’ effectiveness and impact and to promote the public interest in charity.

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