Our role as a regulator: what we can and cannot deal with

 

Our role as regulator includes supporting charities in complying with the Charities and Trustees Investment (Scotland) Act 2005, as well as investigating and taking action where there is evidence of misconduct. We provide guidance to support charity trustees in their role. We recognise that most charities are doing a good job providing public benefit and the number of charities we have concerns about in any given year is very small.

We receive information about possible issues in charities from many different sources including:

• Members of the public, service users and volunteers
• Notifiable events from charity trustees – we have a form and guidance available
• Charity employees - if a charity employee has a concern about the charity that they work for and they do not feel it is being dealt with appropriately, they can raise this concern with us under the Public Interest Disclosure Act 1998 (PIDA). PIDA protects paid workers from unfair dismissal or treatment from their employer if they report wrongdoing. Our Whistleblowing guidance provides further information on what qualifies as a ‘protected disclosure’ and the situations when employees can make these disclosures to OSCR. There is an online form to submit this kind of concern which is available through our website.
• Auditors and Independent Examiners – who have a duty to report matters of material significance such as dishonesty including the misuse or theft of a charity’s funds, fraud, money laundering or a failure on internal governance to OSCR. Some matters must be reported while other matters are at the discretion of Auditors and Independent Examiners.

We act in the interest of the public as a whole and not on behalf of individuals or groups. We focus our energy and resources on the risks and charities that are in our view most likely to undermine public trust and confidence.

In cases where we decide not to act, we hold the information on file for future consideration if necessary. This is a decision for OSCR to take and is not subject to appeal under the 2005 Act.

Not all issues are ones that we can deal with. This could be because:

• the charity trustees are the people that need to deal with the matter because it is their job to run the charity, or
• we do not have the legal authority to deal with the issue.

In the following sections we explain how some of the most common issues that arise with charities should be handled. This is to ensure that those who have a concern about a charity know where to direct that information, to allow trustees to run their charities appropriately, and to support OSCR in focusing on where regulatory action is needed.

Concerns that should be raised with charity trustees

There are some types of issues that OSCR does not usually deal with because they should be raised first with charity trustees. Charity trustees are the people who are responsible for the management of the charity. They must deal with issues about the running of the charity such as:  

• Issues about a service or activity that a charity provides - for instance a service being stopped, a complaint about an item purchased from a charity shop, prices for the charity’s services being increased.
• Disputes or disagreements - this includes disputes involving trustees, members, people who want to be members, beneficiaries and staff. OSCR’s role isn’t to resolve disputes between individuals and charities or come to a concluded view on who is right or wrong. We expect charity trustees to work together to resolve such disputes, wherever possible, seeking advice and using mediation services if necessary.

If you are concerned about this kind of issue, you should contact the charity trustees.  If after doing so you remain unhappy with the outcome, this is still not for OSCR to deal with. Decisions taken by the charity trustees that are within the powers set out in the charity’s governing document and in line with their legal duties as charity trustees cannot be overruled by OSCR even where they are unpopular.

 

Issues that OSCR does not deal with

If your concern is about any of the following matters, these are not for OSCR to deal with, and you should refer to the relevant section below that explains the steps you should take instead:

• Fundraising
• Employment issues
• Debts due by a charity or contractual disputes with a charity
• Decisions taken by charity trustees that are within their powers
• Issues that are the responsibility of another Regulator
• Organisations that are not charities

Fundraising complaints

For concerns about fundraising, including the way you’ve been asked for donations or how fundraisers have behaved, you should contact the charity trustees in the first instance to raise your concerns. If you do not receive a satisfactory response, you should contact the Scottish Fundraising Adjudication Panel.

Employment issues

We do not intervene or act on behalf of individuals in relation to employment issues, which include:

• Unfair dismissal
• Grievances such as discrimination, bullying and harassment
• Terms of employment
• Redundancy

If this affects you, you should take your own legal advice or seek assistance from ACAS. Citizens Advice Scotland also provide general advice on some employment matters.

Debts due by a charity or contractual disputes with a charity

We do not deal with complaints about money owed by a charity.  We cannot intervene where the issue relates to:

• Contracts that a charity has entered into
• Invoices that have not been paid
• The delivery of a contract

If a charity owes you money or there are issues with a contract, you should first contact the charity trustees and if this does not resolve the matter you should seek legal advice.

Decisions taken by trustees that are within their powers

Charity trustees are responsible for the management of the charity. To do this, they must make decisions and take certain actions. Whether you agree with their choices or not, we cannot take action where the charity trustees have made decisions or taken actions that are within the powers set out in the charity’s governing document and have acted in accordance with their legal duties as charity trustees.

Issues that are the responsibility of another Regulator

Even where a body is a registered charity, sometimes the issue you are concerned about is the responsibility of another regulator. For example:

• significant performance failures by a Registered Social Landlord should be addressed to the Scottish Housing Regulator
• concerns about the standard of care provided by a registered service provider should be raised with the Care Inspectorate
• where the concern is about a charity that is also registered with the Charity Commission for England and Wales, the concern should be raised with the Charity Commission for England and Wales, as they are the lead regulator for cross-border charities
• Concerns about a charity’s tax affairs or gift aid scheme should be directed to HM Revenue and Customs
• Issues about health and safety in a charity may need to be reported to the Health and Safety Executive or a local authority. Guidance is provided by the Health and Safety Executive to help you understand where to raise your concern.

The other regulatory body will let OSCR know where there is a breach of charity law so that we can take any necessary action.

Organisations that are not charities

We do not deal with concerns about organisations that are not charities and are not representing themselves as a charity. You can check if an organisation is a charity by searching the Scottish Charity Register.

 

Regulatory issues that OSCR may investigate

To support our work, we want you to tell us when it looks like:

• a charity’s assets are at risk – for example property held by a charity is not insured or where cash held by a charity is not kept securely
• a charity’s assets are not being used for the objects of the charity as displayed on the charity’s entry on the Scottish Charity Register
• a person or organisation is inappropriately profiting from a charity. Our guidance explains the conditions under which trustees can be remunerated and how OSCR considers private benefit
• a charity is not complying with its legal duties under the 2005 Act
• a charity may be putting the people it helps at clear risk of harm. For example, by not having appropriate safeguarding procedures
• a charity trustee has a conflict of interest and this is not being properly managed – our guidance explains what a conflict of interest is and how it should be managed
• the charity trustees are not working collectively to run the charity as they should do. For example: one charity trustee seems to be in overall control of the charity, an employee seems to be in overall control of the charity, or none of the charity trustees are taking responsibility for the charity – this can result in serious governance problems that could harm the charity
• an organisation is calling itself a charity when it is not (you can check if the organisation is a charity by searching the Scottish Charity Register)
• charity trustees are significantly breaching the requirements of their governing document
• a charity is unlawfully discriminating in the provision of its services or benefits
• or when you have reported a matter to the police about criminal activity in a charity. The police deal with criminal investigations but you should also report this to us.

 

How we assess risk to charities

The law requires us to work in a targeted way. This means making sure that we focus our energy and resources on the issues and charities that are most likely to undermine public trust and confidence.

We consider and keep on record all concerns about charities and decide what steps to take but will not take action in every case.

When making our decisions we consider the issue, the risk involved to the charity and its beneficiaries and the likely impact of our involvement.

Our risk framework underpins how we consider information about charities and the actions we take.

When someone sends us information expressing a concern about a charity we risk assess it. This risk assessment process allows us to consider the concern more widely alongside other relevant information. We apply the same process to information from other sources.

We consider:

• whether or not the issues relate to risks in our risk framework
• the credibility of the evidence available
• the level of threat to the charity, its assets or the people who benefit from it.

The outcome of the risk assessment helps us to decide what we do next. We operate in accordance with our duties as a regulator, which include acting independently, fairly and proportionately, and targeting our action where it is needed – see our Corporate Strategy.

Following our risk assessment we may open an inquiry into a charity.  We aim to encourage charities to comply with charity law and in many instances we will close an inquiry once we have given guidance, made suggestions or signposted the charity to other sources of help. However, in the course of or at the conclusion of an inquiry we will take enforcement action where we identify a need to do so.

 

How to contact us about a charity

If you want to send us information where you have concerns about a charity you should use our concerns form.  The form explains where the charity trustees or another regulator should deal with the matter rather than OSCR.

Any concern form submitted to OSCR will receive an automatic acknowledgement.