“Serious incidents” at school – don’t forget the Charity Commission
2 May 2019
If a serious incident happened at your school, would you report it to the Charity Commission?
The Charity Commission requires charities in England and Wales to report serious incidents promptly and directly to it as the sector regulator.
A report by a Charity Commission taskforce made towards the end of last year, concluded that there is "significant under-reporting" of serious incidents by charities, on the basis that only 0.9% of registered charities submitted a report of a serious safeguarding incident, and only 1.5% reported any kind of serious incident at all during the four-year period from April 2014.
During the period covered by the review, 1.5% of registered charities amounted to around 2,500 organisations, which may sound like a high number. The Commission, however, while accepting that there "may be" many charities that do not experience serious incidents, finds it "unlikely that 99.1% of charities did not experience any reportable safeguarding issues over a four-year period".
In other words, the Commission believes that there are serious incidents happening that are not being reported as they should be and, as charity trustees, including governors of independent schools, have a duty to report under certain circumstances, they should remind themselves exactly what constitutes a "serious incident" and what makes it reportable to the Commission. The duty to report to the Commission does not apply to the trustees of exempt charities, including the governors of academies, but, in many of the examples below, there are likely to be other reports to make – to the local authority or to the police, for instance.
What is a serious incident?
The Commission defines a serious incident as an adverse event, whether actual or alleged, which results in or risks significant:
- harm to a charity's beneficiaries, staff, volunteers or others who come into contact with the charity through its work;
- loss of a charity's money or assets;
- damage to a charity's property; or
- harm to a charity's work or reputation.
"Significant" here means significant in the context of the charity concerned, taking into account its staff, operations, finances and/or reputation.
When is a serious incident reportable?
The Commission's guidance identifies six main categories of reportable incident:
- Financial crimes – there is no minimum figure that should or must be reported, so the governors should decide whether the incident is sufficiently serious or significant to report in the context of the school and the circumstances of the incident, taking account of actual harm and potential risks to the school. Where a governor or senior employee has taken assets belonging to the school, or where there is media interest in the incident, it should always be reported.
- Other significant financial loss – this would include, for example, losses due to fire or flood damage. It could also include losing a court action and having to pay legal fees or damages from school funds. As a guide, the Commission expects governors to report any loss with a value of 20% or more of the school's annual income or £25,000 – whichever is the smaller amount.
- Large anonymous donations – donors sometimes wish to remain anonymous but charities should be wary of large anonymous donations, particularly if they come with specific instructions as to their onward application or if the money is received from a suspect third party. The governors should always report if they suspect the school is being used for money laundering or if a donor is disposing of the proceeds of crime.
- Links to terrorism or extremism - links or alleged links should always be reported. The primary duty on governors in such circumstances is to make a report to the National Crime Agency, as failure to do so may constitute a criminal offence, but the Commission should be notified that a report has been made.
- Safeguarding issues – these have been a particular cause for concern for the Charity Commission since the Oxfam case. In a schools context, the Commission expects to be notified where:
- a pupil has been or is being abused or mistreated while under the school's care or by someone connected with the school;
- there's been an incident where someone has been abused or mistreated and this is connected with the activities of the school; or
- there has been a breach of procedure or policies at the school which has put pupils at risk – including failure to carry out proper checks before appointing governors or staff.
And of course, under these circumstances, the police, local authority or other relevant regulator should be contacted, as well as the Commission.
- Other significant incidents – this category would include disqualified governors, insolvency, withdrawal of banking services and actual or suspected criminal activity.
When should a report be made?
As a matter of law, the governors of independent schools and other registered charities have a legal duty to report serious incidents to the Commission as part of the annual return. However, the Commission's guidance makes it clear that it expects serious incidents to be reported immediately (by email) and that it may treat failure to make timely reports as evidence of mismanagement on the part of the governors, which could result in regulatory action being taken. It is worth bearing in mind that the duty to report to the Commission applies even if the matter has already been reported to other regulators, or authorities such as the police.
What should the report contain?
Having received a report of a serious incident, the Commission will decide whether to investigate any actual or potential misconduct or mismanagement, and it is likely to do so where there's a serious threat or risk to the pupils, services, assets or reputation of the school. The best way of avoiding an investigation is therefore for the governors to demonstrate in their report that they have an action plan to remedy the incident or, where appropriate, that they are carrying out their own investigations into the issues.
The Commission will want to know that the governors are actually aware of any allegation of misconduct or mismanagement within the school. It will want them to have considered the likelihood of any reputational issues to the charity – particularly if there are suggestions that charitable funds or vulnerable beneficiaries are at risk. Wherever possible, the governors should do whatever they can to remove any need for the Commission to intervene because, if the Commission does decide to look into the issues, it can be a lengthy and sometimes costly process and will distract everyone concerned from the day-to-day work of the school.
Wilsons is well-placed to advise on the content of serious incident reports before they are submitted and to deal with any follow-up correspondence from the Commission.