Releasing its annual report on its compliance work, the Charity Commission reports that charities continue to be put at risk of abuse or harm because of weak governance and poor management by some charity trustees.
According to its report ‘Charities Back on Track – Themes and Lessons from the Charity Commission’s Compliance Work’, some charity trustees are still making too many basic mistakes in managing their charities.
The report, which covers the financial year 2009-10, reveals that failures by trustees properly to govern charities, poor financial management and no – or inadequate- accounting and reporting continue to be among the most common areas of concern in the Commission’s investigatory and compliance work. Issues around the safeguarding of vulnerable beneficiaries also continue to make up a significant proportion of these cases.
The report does acknowledge that the overwhelming majority of charities are well governed and well managed. Of the 2,434 serious concerns and incidents taken up by the Commission in its Assessment Unit, only 180 (0.1% of the 180,000 registered charities in England and Wales) were escalated to a formal investigation. This was up slightly from the 168 investigations carried out in 2008-09.
Through its regulatory compliance work the Commission monitored a total of £521 million of charity income and directly protected £29 million of charity assets at risk through its action during investigations into charities.
Although this is the third edition of ‘Charities Back on Track’, it is the first to analyse the whole range of the Commission’s compliance activity.
Dame Suzi Leather, Chair of the Charity Commission, said: “As this report demonstrates, the public can have confidence in the charity sector and be assured that the vast majority of charities are well run and effectively managed. Relatively few charities experience problems serious enough to warrant an investigation and use of the Commission’s legal compliance powers. That is good news for the public who donate so much time and money to charity and for the hundreds of thousands of trustees who volunteer to carry out such an important role.
“But our work reveals that problems arise where trustees fail in their basic duty to protect their charities from harm and that is a cause of concern to us.”