The Charity Commission and its use of official warnings

The Charity Commission (CC) is more than a Government organisation that approves the setup of charities and monitors their accounts. The Charities (Protection and Social Investment) Act 2016 gave the CC power to issue official warnings.

Official warnings ensure that the charity or the trustees know that there has been a breach or misconduct or mismanagement that the CC are aware of and the position needs to be dealt with and the CC satisfied that there will be no recurrence. They are not used lightly, but form part of the CC’s risk analysis of the situation. The CC is at pains to show that it appreciates that many trustees are volunteers and are motivated to do good. Therefore, if those trustees have acted honestly and reasonably but simply got it wrong, and the loss or risk to the charity or public confidence in the charity system is minimal, then an official warning is unlikely.

Those that ignore the CC and fail to engage with them and accept their help can reasonably expect the CC to use an official warning as part of its weaponry. Official notice of the intention to issue the warning is given and the anticipated recipients have a right of reply on the proposed contents of that warning prior to its issue.

An example of the use of a warning is the matter of the Brighton Mosque and Muslim Community Centre (1122974) where a warning was issued and finally in September 2022 an external interim manager appointed by the Charity Commission to the exclusion of the trustees in place. A statutory enquiry has been opened as, despite the warning, the trustees failed to deal with the issues identified by the CC.

It is important to note that the Charity Commission has a number of lines of approach that it can take but the intention is to assist trustees as much as possible to rectify any defaults or issues and to continue to act in the best interests of the charity and to continue to maintain public confidence in both that charity and in the charity ‘system’ as a whole.