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Reminder to Report Serious Incidents as New Charity Commission Guidance is Published

on Friday, 13 October 2017.

Academy Trusts should be aware of their duty under their funding agreements to comply with charity law and Charity Commission guidance.

This includes responsibilities to report serious incidents and the Charity Commission has reiterated the importance of serious incident reporting whilst issuing its new guidance How to report a serious incident.

Serious incident reporting is a key compliance and monitoring tool. Effective reporting of serious incidents is important for trustees to demonstrate that they are fulfilling their legal duties whilst also demonstrating good governance and management. There has been concern of significant under-reporting of serious incidents by all charities which increases the risk of further harm, in particular to the charity's reputation.

The meaning of serious incident remains the same but has been given a more succinct definition:

'an adverse event, whether actual or alleged, which results in or risks significant (a) loss to your charity's money or assets; (b) damage to your charity's property; or (c) harm to your charity's work, beneficiaries or reputation'.

What is New?

The new guidance:

  • Provides new reference tools to illustrate when trustees should, and should not, report incidents
  • Expands on what is meant by 'significant financial loss' and
  • Removes the requirement to report the lack of a safeguarding policy or procedure, although this is of limited relevance to academies who should have sufficient safeguarding policies in place

New Reference Tools

One helpful feature of the new guidance is the new checklists and examples provided to assist in deciding whether to report an incident and the steps to take when reporting.

The new table of examples includes scenarios for each category of serious incident. Some categories, including fraud and money laundering and links to terrorism or extremism, simply advises "if in doubt, report it"  rather than providing examples of incidents not to report.

It can be a difficult decision for the Trustees to decide whether to make a report following a particular incident. Often, it is appropriate to seek legal advice when incidents occur to discuss whether to make a report and to assist in producing the report to the ESFA.

Significant Financial Loss

Trustees have always needed to report significant financial loss to their charity where this threatens the Trust's ability to operate and serve its beneficiaries, or where the Trust's financial reserves are not sufficient to cover the loss. However, the new guidance offers further direction on what type of financial loss is considered significant.

Best Practice

Whilst the new guidance highlights that reporting of serious incidents itself is not a legal duty, it notes that all charities, regardless of their size, should report serious incidents promptly as a matter of good practice as well as demonstrating to the ESFA that the Trustees have complied with their other legal duties and the Trust is practising good governance. 

In practice, all Trusts should report serious incidents as they arise or take legal advice on whether to make a report for any particular incident.

How We Can Help

The new guidance does not substantially differ to the previous guidance, but we do consider it more user friendly to Trustees and we would encourage them to read and become familiar with it. There are, however, still scenarios in which we would recommend trustees seek legal advice in deciding whether to report an incident and the process for doing so.

If you have any queries in relation to serious incident reporting, please contact Chloe Brunton in our Education team on 0117 314 5301.

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