Small charities to face undue burden under new reporting regime, Law Society warns
Small charities face the prospect of greater administrative burdens if proposals put forward by the charity regulator go ahead, the Law Society of Scotland has warned today, 27 October.
Changes being proposed by the Office of the Scottish Charity Regulator (OSCR) will see a number of new questions being asked of charities via their annual return which all charities are obliged to complete. Charities will have to answer a number of sections depending on their income level, with the lowest income threshold being set at £25,000.
Stephen Phillips, convener of the Society’s Charity Law Committee, said: “We are supportive of any measures which aim to improve public trust and confidence in charities, however there is a risk that these new measures will place an undue burden on charities, smaller ones in particular.
“We believe that the proposed threshold of £25,000 is too low if the number of questions being proposed in the annual return is to remain as is. It would place far too great a reporting burden on smaller charities. We believe that the threshold should broadly reflect the level of income a typical charity would be likely to have with at least one full time paid member of staff.”
“We would also call for further guidance from OSCR on the reasoning behind some of the proposed questions – as the way in which some of the questions are posed could give a misleading impression that certain approaches are considered best practice for every charity, which is not necessarily the case.”
The proposals also consider the introduction of a Serious Incident Reporting obligation on charities, meaning that charities would be obliged to report every instance of fraud or theft, amongst other matters, to the regulator, no matter how small.
Mr Phillips said: “Issues such as fraud and theft are matters for the police. If a serious incident occurs then self-evidently the charity should take steps to try and ensure it does not happen again, but we would question whether reporting such incidents to OSCR is always appropriate.
“We would certainly suggest that if a serious incident reporting regime is to be introduced, then some further consideration should be given to the question of what constitutes a serious incident, taking into account the diverse nature of charities, their activities and scale.
“There also needs to be a strong commitment by OSCR to respond to what could be a significant number of notifications. If OSCR is unable to provide the necessary support, the process of gathering statistics on serious incidents may have the effect of decreasing public confidence in Scottish charities - contrary to the strategic aim behind these new proposals.”
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