Sam Younger, Chief Executive of the Charity Commission, has promised that the regulator will significantly expand the number of charities whose accounts it reviews and use the information collected to make sure enforcement work is better targeted going forward.
Mr Younger told delegates at the Commission’s public meeting that the regulator had reviewed 2,770 sets of accounts in 2012/13; this represents 1.7 per cent of charities on its register and 6.5 per cent of total income.
According to Mr Younger, this was much higher than the 1,500 it had originally targeted, but the Commission wanted to "increase significantly as time goes on" the overall number of accounts reviewed each year.
He said that the Commission wanted to use its data to "build up risk profiles" that would inform its regulation of charities. "What we’re doing is trying to get better with our use of data and data analysis to see where there’s a red flag," he said.
Mr Younger said the Commission was developing its links with HM Revenue & Customs (HMRC) by "strengthening the two-way flow of intelligence and information".
However, he also mentioned that the proposed joint registration process between the Charity Commission and HMRC, which would cover both charitable status and Gift Aid eligibility, would not be ready until at least next year.
The new joint portal, recommended in Lord Hodgson’s 2012 review of the Charities Act 2006, "couldn’t possibly be implemented until some time in 2015".
Though the regulator intended to publish more reports outlining the results of its investigation work, this would not be feasible due to the wide range of cases involved.
Michelle Russell, Head of Investigations and Enforcement at the Charity Commission, said that the two common areas of bad practice her team had come across were poorly documented loans to trustees and the signing of blank cheques.
Urging trustees to "never ever" sign blank cheques, on the topic of loans she said: "The records of trustee decision-making around this are key. More and more in the cases my team and I are dealing with are loans between the trustees and the charity, and no minutes."
Nick Mott, Head of Policy Development Guidance and Review at the Commission, said that the regulator would release new guidance on conflicts of interests at some point in the spring.
He said the existing guidance on the website was more than 10 years old and "written for a very different era – we were a very different regulator then".
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