Serious Incident Reporting - Do You Understand Your Duties?

Exceptional incidents are probably easier to spot and report, but there are streamlined options for large charities which experience multiple serious incidents. Serious incident reporting is the system which places the onus on charity trustees to inform the Charity Commission of matters which may be of regulatory interest. The requirement has two main sources.

The first source for the obligation is the annual return. The trustees of any charity with an income over £25,000 must complete a question in the annual return confirming "there are no serious incidents or other matters which they should have brought to the Commission's attention and have not done so already."  By putting this in the annual return, the best practice expectation that incidents would be reported has gathered a mandatory legal force.

The second source is the Charity Commission's published guidance, which brings some formal structure around the practice and helps to explain what is sufficiently serious to report.

Reporting Not Optional

Serious incident reporting isn't optional. Trustees who know or ought to have known that there have been serious incidents but have not reported them may be committing a criminal offence when they submit the annual return.  While we aren't aware of any prosecutions, the Commission does make findings about reporting and the speed of reporting in its compliance reports.  It may be a factor in their use of regulatory powers.

A Single Threshold

The Commission's guidance aims to present a common threshold. By the very nature of guidance, there will be judgment calls for trustees as to whether given incidents should be reported, although the Commission advise "if you are unsure whether an incident is serious or significant, we recommend you report it to us anyway." 

In some limited ways, the threshold is context-specific. For example, a financial loss will have a bigger impact on smaller charities with fewer resources making it more serious and the guidance reflects this. A safeguarding risk to beneficiaries on the other hand will be serious regardless of the size of the charity and regardless of the risk inherent in the sector in which the charity operates. 

Trustees of large charities and those working in higher risk areas need to be particularly aware of these thresholds. It may not be obvious that an incident must be reported to the Commission if the Charity has well developed systems and procedures for addressing risks of that type, making their effective management routine.

Trustees of large charities and charities operating in higher risk sectors may be concerned at the prospect of reporting multiple incidents to the Commission.  The Commission's guidance does offer some comfort, saying "we recognise that some serious incidents may occur more frequently in some charities because of the scope and nature of their activities and work." The important thing is that the report provides the Commission with enough information to understand that the incidents are a legitimate part of the scale and nature of the charity's operation - and not the product of governance or risk management or risk appetite failings.These same trustees may face another challenge - how best to report multiple incidents. 

Reporting Isolated Incidents

In the case of isolated incidents, it is quite clear what to do. An email can be sent to the Commission explaining the nature of the incident, what processes and procedures the charity has to guard against such incidents, how the charity managed the immediate situation and the steps the charity is taking to review processes and procedures in light of the incident. The Commission's guidance contains some more suggestions.

Streamlined Multiple Reports

After more than a handful of examples the viability of making individual reports quickly diminishes. Similar information about processes and procedures will be repeated. It becomes difficult to keep track of reported incidents and the cost increases with each bespoke report. In these circumstances it may be worthwhile discussing with the Commission the prospect of making multiple reports, organized on a single spreadsheet. Along-side this table demonstrating how individual incidents have been managed, the charity can explain its policies for recognizing, avoiding and managing the risk.

Conclusion

Serious incident reports are an important part of the charity regulatory framework. All charities are expected to report against a common standard, including the largest charities working in higher risk fields. If your charity is making multiple reports, it may be worth getting in touch with the Commission to discuss a more streamlined approach to reporting.  

 For more information, please contact Laura Chesham in our Charity Law Team on 0117 314 5314.