Reporting to the commission: a practical guide to best practice

Workshop notes, ACIE Conference , Friday 23rd June 2017 (The Association of Charitry Independent Examiners) delivered by our CEO John O'Brien.

The guidance:

The session was based on the new publication: “Matters of material significance reportable to UK charity regulators” applicable from 1st May 2017.

Key points:

  • The guidance covers any person appointed as an independent examiner
  • You are only expected to report matters which you identify in the normal course of your work
  • You must report any matters of material significance which you become aware of during your appointment
  • You must report immediately
  • Material means matters of material significance to the regulator in carrying out their functions
  • When in doubt, report it.

The 9 reportable matters:

1 Dishonesty & Fraud
Matters suggesting dishonesty or fraud involving a significant loss of, or a material risk to, charitable funds or assets.

2 Internal Controls & Governance 
Failure(s) of internal controls, including failure(s) in charity governance that resulted in, or could give rise to, a material loss or misappropriation of charitable funds, or which leads to significant charitable funds being put at major risk.

3 Money Laundering & Criminal Activity 
Knowledge or suspicion that the charity or charitable funds including the charity’s bank account(s) have been used for money laundering or such funds are the proceeds of serious organised crime or that the charity is a conduit for criminal activity.

4 Support of Terrorism 
Matters leading to the knowledge or suspicion that the charity, its trustees, employees or assets, have been involved in or used to support terrorism or proscribed organisations in the UK or CCNI EG058 April 2017 9 outside of the UK, with the exception of matters related to a qualifying offence as defined by Section 3(7) of the Northern Ireland (Sentences) Act 1998.

5 Risk to charity’s beneficiaries
Evidence suggesting that in the way the charity carries out its work relating to the care and welfare of beneficiaries, the charity’s beneficiaries have been or were put at significant risk of abuse or mistreatment.

6 Breaches of law or the charity’s trusts
Single or recurring breach(es) of either a legislative requirement or of the charity’s trusts leading to material charitable funds being misapplied.

7 Breach of an order or direction made by a charity regulator 
Evidence suggesting a deliberate or significant breach of an order or direction made by a charity regulator under statutory powers including suspending a charity trustee, prohibiting a particular transaction or activity or granting consent on particular terms involving significant charitable assets or liabilities.

8 Modified audit opinion or qualified independent examiner’s report
On making a modified audit opinion, emphasis of matter, material uncertainty related to going concern, or issuing of a qualified independent examiner’s report identifying matters of concern to which attention is drawn, notification of the nature of the modification/qualification/emphasis of matter or concern with supporting reasons including notification of the action taken, if any, by the trustees subsequent to that audit opinion, emphasis of matter or material uncertainty identified (in the) independent examiner’s report.

9 Conflicts of interest and related party transactions
Evidence that significant conflicts of interest have not been managed appropriately by the trustees and/or related party transactions have not been fully disclosed in all the respects required by the applicable SORP, or applicable Regulations.

Visit the Charity Commission or ACIE website for more information