Reporting Serious Incidents

This article first appeared in the Spring edition of the ISBA Bursar’s Review

What is a serious incident and when does it need to be reported?

Charities (including independent schools which are registered as charities) have had to report serious incidents to the Charity Commission since 2007.

The Charity Commission has produced guidance on reporting serious incidents which seeks to explain what constitutes a serious incident and how and when charities should report such an incident.

Reporting Serious Incidents – Guidance For Trustees

However, there can be uncertainty over what constitutes a “serious incident” and as a result the Charity Commission continue to find serious incidents that should have been reported but were not. They are also asked on a regular basis for advice on what to report, how and when.

• The number of incidents reported has been increasing over the years
• The most common types of incidents reported being fraud, theft and safeguarding issues
• In 2015-2016, over 2200 serious incidents were reported to the Charity Commission

New draft guidance

The Charity Commission have recently reviewed their current guidance and have produced new draft guidance seeking to make it clearer what to report, how and when – encouraging reporting at the time the incident occurs, or as soon as possible afterwards. Consultation on the new guidance closed on 12 January 2017 and, at the time of writing, we are waiting for the results of the consultation and the updated guidance to be published.

The key changes they have proposed include the following revisions:

• making it clearer what to report, how and when – encouraging reporting at the time the incident occurs or as soon as possible afterwards;
• an updated section to help with multiple reporting for larger charities or those that report incidents on a regular basis, due to the risks arising from the nature of their work;
• removing the need to report some types of incident, where these are risks rather than serious incidents, and where the relevant information about the risk is now requested in the annual return; and
• adding some new types of incidents – which charities are experiencing on a regular basis and/or finding it difficult to manage properly.

Given the Charity Commission’s increased focus on safeguarding and the significance it places on a trustee’s “duty” to report serious incidents to it, governors of independent schools which are registered as charities must remain aware of what would constitute a “serious incident” should it occur and how and when to report such an incident to the Charity Commission.

Definition of a Serious Incident

The Charity Commission define a serious incident as an adverse event, whether actual or alleged, which results in or risks significant:

• loss of your charity’s money or assets;
• damage to your charity’s property; or
• harm to your charity’s work, beneficiaries or reputation.

It is important to note that an incident should be reported regardless of whether it is alleged to be current or historic and even if it is just an allegation or suspicion at the time. Trustees are responsible for taking appropriate action in response to a suspicion or allegation in order to protect their charity from harm, and the Charity Commission will want to know what you have done to manage the situation.

The current guidance issued by the Charity Commission lists nine, higher risk, issues which should always be reported as soon as possible. The guidance stresses that this list is not exhaustive so if the school or a governor considers that a serious incident has occurred, they should report it to the Charity Commission.

The nine categories that are listed as high risk are:

1. Fraud and theft;
2. Other significant loss (property damage or loss);
3. Significant sums of money or other property donated to the charity from an unknown or unverified source;
4. The charity (including any individual staff, trustees or volunteers) has any known or suspected monetary / finance based links to a prescribed (banned) organisation or to terrorist or other unlawful activity;
5. A person disqualified upon acting as a trustee has been or is currently acting as a trustee of the charity;
6.  The charity has no vetting procedure to ensure that a trustee or member of staff is eligible to act in the position he or she is being appointed to;
7. The charity does not have a policy for safeguarding its vulnerable beneficiaries (e.g.  children and young people under 18 years of age or adults who are vulnerable at a particular time because they are in receipt of a regulated activity);
8. Suspicions, allegations and incidents of abuse or mistreatment of vulnerable beneficiaries; and
9. The charity has been subject to a criminal investigation, or an investigation by another regulator or agency; or sanctions have been imposed or concerns raised by another regulator or agency such as HMRC, the Health and Safety Executive, the Care Quality Commission or OFSTED.

In addition to the above, the Charity Commission also expects trustees to report an incident if:

• the incident is also reported to the police or other statutory agency (unless it is a technical or minor issue that poses little or no risk);
• the charity, or individuals associated with the charity and in connection with their role within it, are the subject of a police or other statutory agency investigation;
• you decide that the incident presents a serious or significant risk to the charity, its beneficiaries, reputation or assets.
• the internal risk assessment of the incident concludes that the charity should act to avoid a serious and significant risk to the charity, its beneficiaries, reputation, services or assets; or
• your professional advisors have advised you to notify them of the incident.

As a general rule, any incident that is reported to the police or required to be reported to another statutory agency will most likely need to be reported to the Charity Commission. It is worth noting that other incidents which do not need to be reported to the police or other agencies might still need to be reported to the Charity Commission, if, for example, an incident attracts negative media interest which poses a serious or significant risk to the reputation of the School.

Examples of serious incidents which could occur at a school and might need reporting are serious safeguarding issues involving pupils (such as an allegation of abuse of a pupil) or teacher misconduct if that teacher is being investigated by the police or if the incident has attracted public attention through for example being reported in the media and therefore poses a serious or significant risk to the reputation of the school. Another example of a serious incident at a school might be if there has been a breach of procedures or policies which has put a pupil at risk. There may also be historic abuse matters which the school become aware of which might also need reporting to the Charity Commission depending on the facts of the matter.

How and when to report

The responsibility for reporting serious incidents to the Charity Commission rests with the trustees. All trustees are therefore responsible for deciding whether it is necessary to make a report and if it is, ensuring the charity makes a report in a timely manner.

If it is a governor reporting the incident they need to confirm that they have authority to report on behalf of the trustee body. If someone other than a governor (for example the Bursar) is making the report then they should declare who they are, their role in or the relationship with the charity and confirm who in the trustee body is aware of the incident and that they have the authority of the trustees to report it.

Trustees of a charity with an income of over £25,000 must, as part of the Annual Return, sign a declaration that there are no serious incidents or other matters relating to their charity over the previous financial year that have not been reported previously. So if an incident has taken place which has not been reported to the Charity Commission, you would have to do so when you submit the Annual Return. The Charity Commission have said however, that an incident should be reported promptly. This means as soon as possible after it happens, or immediately after you become aware of it, not just on completion of the Annual Return.

As soon as you become aware of a serious incident, a report should be made by sending an email to [email protected]. The report should include details of what happened and explain how the School is dealing with it, even if the incident has already been reported to the Police or another regulator. See the Charity Commission’s guidance for further details of what to include in a report. Within your report  you should aim to provide enough detail to give the Charity Commission a clear picture of what happened and when, the extent of any loss, and how the School is dealing with it and the possible next steps.

After you have reported the incident, the Charity Commission will let you know that it has received your report. It will look at how you are dealing with the incident and will confirm whether it requires any further information about the incident or whether it requires you to provide future updates.

Reporting Checklist

When making a serious incident report, include details of:

• Who you are and your connection to the School
• The authority you have to report on behalf of the trustees
• Who in the trustee body is aware of the incident
• What happened and when the School first became aware of it
• Action being taken to deal with the incident and prevent future problems
• Whether and when it has been reported to the police or another statutory agency (including official reference numbers)
• Media handling lines you may have prepared

Summary

The Charity Commission want to see that trustees are responding appropriately to and effectively managing any serious incidents that arise in their charity. They regard the fact that a charity has made a report as evidence that the trustees are identifying risks and assuming they are satisfied with the content of the report, as evidence that the risks are being managed appropriately. Conversely, a failure to submit a prompt report can be taken by the Charity Commission as an indication of mis-management by the trustees and can therefore in itself prompt the Charity Commission to take regulatory action.

It is essential that governors understand their Charity Law duties in relation to serious incident reporting and are able to recognise a serious incident which needs reporting to the Charity Commission if one occurs. It might not always be black and white whether a particular incident qualifies as a “serious incident” but hopefully the new guidance being produced by the Charity Commission will help to clarify the position and if you are still unsure, seek legal advice. Given the Charity Commission’s current regulatory focus, the general advice is, if in doubt, report and to do so as soon as possible.

Practical Tips 

• Governors should read the current Charity Commission guidance “Reporting Serious Incidents – guidance for trustees” and the updated guidance when it is published
• Consideration of whether any serious incidents have occurred which require reporting to the Charity Commission should be included in Governor meetings
• If unsure whether an incident is a “serious incident” which needs reporting to the Charity Commission, seek legal advice
• If in doubt, report it.