Over the coming weeks we’ll be posting up a series of pertinent articles tackling some of the key issues currently affecting the Third Sector. You’ll find the latest of these invaluable features below. To view previous articles simply click on whichever one appeals to you from the list on the right.
November 2009
However, it’s now becoming increasingly onerous for charity trustees to satisfy all the legal requirements demanded of them by regulatory bodies such as the Charities Commission. Falling short can mean personal financial risk, which understandably makes existing trustees nervous, and puts off those who might otherwise have offered their services. None of which is good news for the Third Sector.
An example of increased risk is the new ‘serious incident reporting’ regime brought in by the Charities Commission in 2007. All charities grossing £25,000 or more per annum are now required to fill in Part B of the Annual Return Regulations. This requires certification on behalf of all the trustees that there are “no serious incidents...which they should have brought to the attention of the Commission and have not done so already.” As well as fraud, theft or loss of funds, these incidents include donations from any “unverified” source, allegations of connections with unlawful activities and allegations of “vulnerable beneficiaries” having been abused, mistreated or inadequately protected.
Not only that, but company law currently demands that “each director has taken all necessary steps” to be informed about all the relevant audit matters and to make sure that their auditors are also provided with the same information.
Clearly, there are a number of areas where it’s easy for a trustee to slip up. Which is where Trustee Indemnity Insurance can offer real peace of mind. New legislation has also made it easier for charities to purchase TII for their trustees because they no longer have to disclose TII costs (previously it was regarded as a ‘trustee benefit’ and required special legal authorisation).
But where to start? Firstly, you’d need to undertake risk management assessments to identify the potential for claims against trustees. Then you’d need to find ways to improve systems and procedures in order to reduce that risk. Finally, you’d need to find a reputable TII provider and make the necessary cost assessments. Alternatively, you could let Charita do all the hard work for you by contacting a member of our expert team at info@charita.co.uk today.