Charity Commission publishes reports on double defaulting charities

On 27 June 2014, the Charity Commission published inquiry reports into four of the charities that were under investigation as part of the Commission’s class inquiry into charities that have failed to file annual documents for two or more years.

The first phase of the inquiry began in September 2013, into those charities with last known incomes over £500,000.  The second phase began in November 2013 for those charities with an income of between £250,000 and £500,000. The work in this threshold continued with further charities being added to the inquiry in April and May 2014.

The Commission is keen to recognise that the majority of charities are compliant.  However, over 64 sets of accounts have now been filed as a result of the inquiry, which means that over £42 million of charitable assets can now be accounted for.

There are some important reminders from the Charity Commission’s reports which are useful for charity trustees to review:

• failure to file accounting information is mismanagement and misconduct in the administration of the charity and a breach of trustees’ legal duties;
• “Waiting for information from accountants” was given to the Charity Commission as a reason for not filing the relevant information on time.  Trustees should remember that, even if professional advisers have been engaged, it remains legal duty of the charity trustees to ensure that the filings are done on time;
• failure to submit annual documents when required to the Commission is a criminal offence; and
• Michelle Russell, Head of Investigations and Enforcement at the Charity Commission, said in a statement on the Charity Commission website: “…. these charities in default should remember that there were just under 300,000 views of the Register of Charities in May 2014 alone. Members of the public are making checks on the charities they donate to, meaning that not only does non-compliance reflect badly on trustees; it may put people off donating.”

For more information please contact Joanne Davison or 0191 211 7958.