It’s time to get serious, says VWV’s Andrew Wherrett

Every year, the charity trustees of a charitable school (usually the governors) complete the Charity Commission’s annual return. The annual return includes a declaration that all serious incidents which should be reported to the Charity Commission have been – and it would be a criminal offence to make a false declaration. What, then, are serious incidents and how should they be reported?

The basics

Reporting to the Commission is additional to any other reports that need to be made. The Commission expects charities to manage incidents responsibly. That includes notifying other regulators as appropriate and, if a crime is suspected, reporting to the police (or Action Fraud). The Commission expects all charities to be familiar with relevant regulators and reporting requirements.

The Commission publishes guidance about what to report, and how, which underwent a major update in September 2017.

Evaluating seriousness

A report should be made of any incident that results in, or risks, significant loss of the school’s money or assets, damage to the school’s property or harm to the school’s work, beneficiaries (pupils) or reputation.

The guidance is example-driven and should not be treated as a definitive list. Just because something is not covered does not mean it should not be reported. For novel issues, the guidance needs to be used to judge the level of significance or seriousness at which the Commission expects a report to be made.

If you are unsure whether to report, the Commission recommends reporting anyway. This makes practical sense, giving the school’s charity trustees confidence to make their declaration in the annual return.

Time for making reports

Reports should be made as soon as is reasonably possible after the incident, or immediately after the school corporately becomes aware of it.

Who makes reports?

The school’s charity trustees can delegate report-making, but they remain responsible for the report. They should be clear to whom they have delegated authority to make the report and need to be confident that those people will make reports when appropriate.

A framework

In the midst of managing a serious incident, reporting to the Commission is not always an obvious priority amongst other pressing calls for time and resource. It is, therefore, important that the school has an effective internal risk framework for identifying, managing and reporting risk, which staff involved in managing incidents use, and are familiar with. Timely serious incident reporting should be an integral part of this policy and every other policy designed to manage or eliminate particular risks, such
as safeguarding.

Particular examples of serious incidents

We stress that any incident risking significant loss of the school’s money or assets, damage to the school’s property or harm to the school’s work, beneficiaries (pupils) or reputation should be reported. The Commission’s examples, which give a flavour of the requirement include:

 – Fraud and theft of any assets of the charity including information

 – Money laundering

 – Unverified or suspicious donations totalling £25,000 or more

 – Suspicious financial activity (being asked to cash cheques, convert currency or pay to release donations)

 – Other significant financial loss including substantial loss to premises, litigation losses, regulatory penalties and any loss totalling over £25,000

 – Links to terrorism and extremism including paying bribes or ransoms

 – Allegations of abuse or mistreatment whilst in the care of the school or by someone connected with the school

 – Allegations of abuse or mistreatment connected with the school’s activities

 – A breach of policies or procedures that has put beneficiaries at risk, for example, failing to apply safer recruitment standards 

 – A trustee is disqualified from acting

 – Insolvency

 – Banking services are withdrawn and it is difficult to secure alternatives

 – Police investigation, significant investigation by another agency, investigations which make significant adverse findings or which involve potential adverse media interest

 – Where a report is made to the Information Commissioner’s Office in connection with fundraising

 – Major governance issues including mass resignations

 – Criminal proceedings in connection with the school or someone’s role there

The Commission also says that any actual or suspected criminal activity should be reported and that anything reported to the police or Action Fraud should be reported to the Commission.

What should you include in your report?

The report is the school’s opportunity to reassure the Commission that it manages the kind of risk raised, that the incident was properly managed and that policies and procedures are being reviewed in the light of the incident. 

If there is a risk to the school’s reputation, it is also important to explain how the risk is being managed, including whether the school has in place arrangements for handling media interest and whether it has engaged PR specialists.

The Commission recommends that the report covers:

 – Who is making the report and their connection to the charity

 – Their authority to report on behalf of the school’s charity trustees

 – Which of the charity trustees are aware, for example, all or only the Chair

 – What happened and when the school first became aware of it

 – The action being taken to deal with the incident and prevent future problems

 – Whether and when it was reported to the police or another regulator/statutory agency (including official reference numbers)

 – Media handling lines you may have prepared

Where theft or fraud are involved, the Charity Commission wants additional detail which is set out separately, but accessible through a link in the serious incident guidance.

Andrew Wherrett

Making the report

Most reports will be by email or emailed letter. In some cases, the Commission may agree to receive regular spreadsheets notifying and updating reports if that would be more effective.

Be aware that the Commission could receive a freedom of information request about the report. The Commission should consider whether exemptions apply before deciding whether to disclose. Schools may feel more comfortable if they avoid including unnecessary information in reports and flag confidential and sensitive information which they consider should be treated as exempt from disclosure.

What happens after the report is made?

The Commission usually responds to serious incident reports very quickly. Sometimes they ask for more information and sometimes they simply ask to be kept updated.

The Commission will decide whether it needs to take any other action. In many cases, it will be satisfied that the charity is managing the incident appropriately. If the school has told the Commission that it will do something, the Commission may follow up to check.

Conclusion

In order for the school’s charity trustees to have confidence in the annual return declaration, they need to be confident in the school’s policies and procedures around risk management and their implementation. They may wish to review their main risk-management policy and any other policy handling risk to ensure that risk is being properly recognised, managed and reported internally with sufficient speed.

Where an incident takes place, the school’s charity trustees need to be confident that serious incident reporting is being considered and that accurate, robust decisions are being taken about whether to report and what to report.

At VWV, we can help schools to draw-up policies to manage risk. We can advise schools deciding whether an incident must be reported and prepare a serious incident report. We can also guide the
school through any follow-up with the Charity Commission. In summary, we can help every step of the way with serious incident reporting. 

To be kept up to date with regulatory compliance, please ask for a demo of My OnStream. My OnStream is a cloud-based compliance management solution tailored to schools, providing a range of compliance services supported by VWV’s sector-leading lawyers. If you would like to find out more visit: www.vwv.co.uk/mos/schools