Scottish charity law: consultation

Section 5: Removal of charities from the Scottish Charity Register that are persistently failing to submit annual reports and accounts and may no longer exist

51. All charities in Scotland are under a legal duty to prepare annual reports and accounts, and submit these to OSCR. Failure to do so can be regarded as misconduct in the administration of a charity.

52. There are currently a number of charities on the Scottish Charity Register for which OSCR does not have up to date reports and accounts; some of which have never submitted accounts. It is thought that a number of these charities no longer exist but have failed to notify OSCR to be removed from the Register. OSCR endeavours to understand and pursue defaulting charities, but with limited return.

53. While OSCR has a legal power to appoint someone to prepare accounts for a charity, and has the power to make inquiries into charities, it can only use these powers if it has current information on where the charity trustees or principal office is.

54. Having little or no information about a charity’s finances and activities can undermine public trust and confidence in the sector, as it is difficult to know how public money and assets are being accounted for or whether a charity is providing any public benefit. This could also undermine trust in OSCR if it is deemed to have insufficient powers to deal with defaulting charities.

55. One option is to give OSCR a discretionary power to remove from the Register charities that have persistently failed to submit accounts.

56. This could enable OSCR to remove charities from the Register as a sanction for not submitting their accounts without requiring OSCR to also prove that the charity is not meeting the charity test or providing public benefit.

57. Another option is to give OSCR a power of positive direction which would enable OSCR to direct a charity to prepare accounts. OSCR could be required to publish an associated inquiry report which could appear next to the defaulting charity’s entry on the Register.

58. Failure to comply with a direction could be classed as misconduct. This could mean that enforcement action would be taken against the charity or trustees as appropriate. This is currently the case if a charity fails to comply with a direction from OSCR. However, if OSCR does not have up to date trustee or principal contact information, it could still prove difficult for OSCR to take enforcement action.

Question 13. Should OSCR be able to remove charities from the Scottish Charity Register if they have persistently failed to submit annual reports and accounts?

Yes

No

Question 14. Should OSCR be given a positive power of direction to direct a charity to prepare annual reports and accounts?

Yes

No

Question 15. If a charity failed to comply with a positive direction to prepare annual reports and accounts, do you think this should be classed as trustee misconduct?

Yes

No

Question 16. If you wish to explain your responses to any of the questions in Section 5, please do so in the box below (e.g. why you think yes and why you think no to the questions and what you see as the benefits and risks of each proposal):