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Charities may still be unclear about ‘notifiable events’ guidance

4th November 2016

Deciding whether to report a ‘notifiable event’ to OSCR may not be straightforward, warns Alastair Keatinge, Head of Charities at Lindsays

Since April 2016, Scotland’s charity regulator OSCR has been asking charities to report ‘notifiable events’, as part of its new ‘targeted regulation’ approach. However, several months after the notifiable events guidance was introduced, many charities are unclear about events they are meant, or not meant, to report.  

OSCR defines notifiable events as ‘events that have a significant impact on [a] charity’. There is a risk that some charities under-interpret, not realising the full breadth of possible events involved, and that others over-interpret and report concerns when there is no immediate need.  

Given this risk, charities may need good professional advice on how these new procedures apply to their own finances, operations or governance.  

What is a notifiable event?

According to OSCR’s guidance, ‘notifiable events’ can take a variety of forms:

•         fraud and theft
•         substantial financial loss
•         incidents of abuse or mistreatment of vulnerable beneficiaries
•         not enough charity trustees to make a legal decision
•         a charity being subject to a criminal investigation, or investigation by another regulator/agency; or sanctions imposed by or concerns raised by another regulator/agency
•         significant sums of money or other property being donated from an unknown or unverified source
•         suspicions that the charity and/or its assets are being used to fund criminal activity
•         a charity trustee acting whilst disqualified.

OSCR’s guidance illustrates each of these events with an example. For instance, for a charity being subject to a criminal investigation, it gives the example of an ongoing police investigation about drug use by staff at one of the charities’ premises.  

Unfortunately, some charities and their advisers believe these examples raise more questions than answers. For instance, what if police are investigating drug taking by service users? Or what if the police investigate, but close the case without further action? The lines on which trustees must make judgements can be very fine.  

Some charities are also worried about hypothetical possibilities that are not listed in the guidance. For example, what if they are the subject of media scrutiny or criticism about fundraising or other matters, but where no other investigations have been launched? Is this notifiable or not? 

Questions of timing

In some circumstances, charities will also need to report incidents to other bodies before, or as well as, reporting them to OSCR. Or there may be situations where resolving an issue before notifying OSCR may lead to better outcomes. Rather than assume that notifying OSCR fulfills all their requirements, charities would benefit from seeking professional advice. 

Playing safe

There is no legal requirement for charities to report notifiable events to OSCR. Rather, they say, ‘it will be concerning to us if there has been a significant event that has not been reported to us’. Furthermore, they say, ‘in most cases we will judge a well-managed incident as a good reflection on the management of a charity’. 

Given this approach by OSCR, our advice would be to play safe. It would be better to veer on the side of over-notification than under-notification, but essential to get good advice beforehand about how to deal with each incident, whom to tell, and in what order to take the different actions required.