Blog for trustees in Powys. They may be known as trustees, directors, board members or management committee members. If the charity is also a company limited under guarantee, then the trustees are also directors of the charity.
Wednesday, 21 December 2016
Regulator highlights poor governance at the heart of charity failings
Charity Commission publishes annual report of its casework, Tackling Abuse and Mismanagement
The Charity Commission, the independent regulator of charities in England and Wales, has today published its annual report of compliance and investigatory work, Tackling Abuse and Mismanagement. The report highlights the Commission’s work in identifying and tackling concerns in charities as it continues to make better use of its powers.
The report also confirms poor governance to be at the heart of much of the regulator’s case work this year, include high profile cases regarding fundraising and financial abuse. It identifies the strategic vision, oversight and evaluation that a board of charity trustees should provide is not an ‘optional extra’ in a charity.
Michelle Russell, Director of Investigations, Monitoring and Enforcement, said:
"Good governance is at the heart of what it is to be a well-functioning, effective charity. Too often in our casework we see basic mistakes, sometimes by those seeking to abuse charities but all too often simply through ignorance or carelessness. The impact this has on charities and their work individually, but also on the sector more widely, can be significant. This report demonstrates the need for trustees to get a real grip on their duties and do the basics better. We provide a huge amount of help and guidance for trustees and now more than ever it is important that these are used by trustees to help them fulfil their role."
The report also highlights the increasingly proactive side of the Commission’s compliance work. The Commission identified key underlying risks to charities and undertook visits and/or accounts scrutinies on these themed issues. In total, the regulator undertook almost 450 monitoring visits and almost 1,000 detailed scrutiny of charities’ accounts. As part of this work, and following the closure of a number of charities over the year including some that were high profile, the Commission undertook a programme of work to test the financial resilience in charities. This programme of work found that trustees who took early steps to address these difficulties and explored a range of different options were able to achieve better results for their beneficiaries. The lessons, and examples of good practice for others to follow, were published.
Michelle Russell says that these lessons can be more widely learnt
"Our proactive work has identified that where trustees are alert to the risks their organisations are facing, and show strong leadership by setting plans to deal with them and seeing them through, then they can have positive outcomes can be positive. Some of the charities in financial distress who took these steps have shown that. We want to prevent abuse and mismanagement before it occurs and so as we enter 2017, we are encouraging trustees to take stock of the risks they are facing and take a positive approach to addressing them."
The Commission will report further on its proactive, themed work in the coming months.
The report also identifies wider steps that the Commission has taken to tackle abuse across the year, including:
continuing to use its powers more swiftly, robustly, and effectively. These were used on 1,248 occasions (2014-15: 1,200), and continued to open more operational compliance cases - 1,327 (2014-15: 1,182)
removing significantly more trustees to protect charities from abuse. In total the regulator issued 14 people with a notice of intention to remove them, compared to four the previous year. Eight of these trustees were removed.
improving and increasing the volume of information sharing with other agencies. In total there were 2332 disclosures between the Commission and other agencies , making 1,410 disclosures and receiving 922; (2014-15: 1,446 and 667)