Heart Space Dundee (SCIO) demonstrate the effectiveness of OSCR’s notifiable events regime

OSCR’s notifiable events regime is continuing to prove beneficial for both OSCR itself and for charities. Here, we look at the regime and what happened when the trustees of Heart Space Dundee (SCIO) (“the charity”) informed OSCR of a notifiable event relating to the charity’s assets in December 2018.

What is a notifiable event?

OSCR created the notifiable events regime to ensure that trustees always act in the best interests of the charity (a legal obligation) and alert OSCR to issues as soon as possible. OSCR only require to be informed of incidents that could have a serious impact on the charity. A notifiable event can be, amongst other things:

  • Abuse or mistreatment of vulnerable beneficiaries of a charity
  • Significant financial loss
  • Fraud
  • Theft
  • Improper actions of a Trustee
What happened to the charity?

In December 2018, the trustees of the charity alerted OSCR to a notifiable event, which suggested the charity’s assets could have been at risk of misuse. The concern was in relation to the charity’s 2016 accounts and, in particular, related to payments made to trustees and others for non-charitable purposes from the charity’s assets. The trustees uncovered irregularities in bank statements and commenced an investigation into the issue whilst also reporting their concerns to the bank to protect the charity’s assets. OSCR met with the charity’s trustees to discuss the issue and the specific payments in question as well as the measures of protection the charity had in place. OSCR learned the charity had appointed new accountants for their 2017 accounts.

Working closely with the charity, OSCR acted on this information and, on 21 December 2018, issued a protective measure to the charity’s bank meaning no money could be released without OSCR’s permission. This was kept in place while the trustees addressed the risk posed to the charity. Once the risk to the charity’s assets had been removed, OSCR withdrew the protective measure, on 27 December 2018.

Conclusion

Once trustees have informed OSCR of a notifiable event, it is crucial that they continue to engage and update OSCR on the progress of internal investigations and demonstrate that steps have been taken to remove the risk. All trustees have a responsibility to protect the assets of a charity and to manage its interests appropriately. This includes ensuring that accounts are accurate and that security measures and financial controls are in place and up-to-date. Payments from a charity’s assets should be made for a charitable purpose and all payments should be clearly recorded.

Using the notifiable events procedure is beneficial for a charity and its trustees and demonstrates that trustees are complying with their duties. Good governance and financial control within a charity are crucial. If you require assistance, please contact a member of the Charities team at MacRoberts.

This article was co-written by Rachel Gillan.

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