The Charity Commission introduced the Serious Incident Reporting (SIR) framework in 2007 as a compliance and monitoring tool, enabling the Commission to have oversight of individual issues noted in charities and also to start a process of risk assessing the sector as a whole.
It is worth noting that this framework has no legal underpinning so there is no statutory duty to report incidents to the Commission. However, the Commission does view this framework as part of legal duty for trustees to ‘manage risks’ in their charities, so it is important for charities to ensure they do notify the Commission when incidents occur.
Changes to the Serious Incident Reporting framework
The current framework was introduced in 2014 and in the Autumn of 2016 a consultation went out in order to propose a few changes. These changes were largely welcomed and were put into force with effect from September 2017 which included:
1 – Clarity was given that the Commission expects all charities to report serious incidents, regardless of the size of the entity. This differs from the £25,000 income limit above which charities are expected to file an annual return. The annual return retains the question ‘has the charity filed an SIR in the year’.
2 – A change was made such that incidents are now expected to be reported promptly, rather than immediately.
3 – A helpful table of examples is now included to show what sort of things would and would not be classified as serious incidents.
4 – The guidance on incidents resulting in a financial loss has been expanded and there is a greater clarity on when a financial problem becomes a serious incident. This now more closely mirrors the guidance for auditors on reporting charities where an auditor notes issues with going concern. It also better reflects the increasing focus on going concern by regulators such as the Charity Commission.
What is the definition of Serious Incident
The Commission continues to define a serious incident as: