Charity Commission outlines new regulatory approach

Opening a ‘statutory inquiry’ into a charity will be very much a last resort for the newly-slimmed-down Charity Commission and will be reserved for the most serious of cases such as those involving fraud, terrorist activity, or risk to vulnerable beneficiaries.
The new regulatory approach is contained in the Commission's new Risk Framework, which outlines how the regulator will decide whether and how to engage with charities on various issues.
The regulator is facing a real-terms reduction in its budget of around a third over the next four years and so has been examining how it can best fulfil its regulatory duties with less money to spend than it has been used to.
The 11-page Risk Framework is accompanied by a longer, 25-page document that explains how it will be applied.
The Framework emphasises that the Commission will work to proactively indentify and manage risks rather than simply reacting to problems. It will rely on its online guidance to provide charities with information, and work with other sector organisations to generate generic or more targeted advice.
However, it will only give individual advice to charities where not doing so will cause trustees to breach their legal duties – though it will provide advice in “complex charity mergers and restructures”.
The Commission will routinely check a sample of accounts each year and take appropriate follow-up action if there are found to be issues. It will not get involved in internal disputes or engage in issues that “do not pose a serious risk to a charity’s status, assets, services or beneficiaries”.
It will assess the nature of the risk and the level of risk before considering how to respond to cases that arise.
The Risk Framework can be downloaded via the link below.

[from: Civil Society Governance 16.1.12]