Financial problems top compliance league

Only a tiny proportion of charities were involved in Charity Commission compliance action in 2013-14, new figures have revealed.

But the commission’s chief has warned that some charities are getting into trouble because trustees “do not take enough care”.

The commission published its latest Tackling Abuse and Mismanagement report on 18 December, revealing that it opened 1,865 operational compliance cases and 64 statutory inquiries in the last financial year. Together they represent around one per cent of more than 164,000 registered charities.

Operational compliance cases are aimed at ensuring trustees address any failures and weaknesses in their charities’ management and take place in cases less serious than those that requiring a statutory inquiry.

The report reveals that financial abuse and financial mismanagement continue to dominate the commission’s compliance case work. Concerns about financial mismanagement or abuse featured in 476 serious incidents reported by charities.

The commission also reported that in September 2013, it launched a class inquiry into charities that had defaulted on their legal requirement to file annual documents for two or more years. By November 2014, the inquiry had ensured charity funds of over £47 million were publicly accounted for.

Paula Sussex, chief executive of the Charity Commission said: “Concerns about financial abuse and financial mismanagement featured heavily in our compliance case work again last year.

“We know the public places enormous value on sound financial management and accountability in charities and it is vital that charities live up to those expectations and manage their charities in a way that inspires public trust and confidence.

“Most trustees are volunteers who do their best for their charity and we recognise when trustees make innocent mistakes.

“But some charities get into trouble because their trustees do not take enough care in their role. When we see serious abuse or mismanagement in charities, we must intervene to put a stop to the problems and protect charities against further harm.”

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