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How OSCR carries out investigations

27 Mar 2023

OSCR’s role is to support a Scottish charity sector which is trusted and respected, and positively contributes to our society. That’s why one of our statutory functions is to undertake inquiries into charities where something has gone wrong.

These inquiries are carried out to help charities and their trustees comply with their legal responsibilities under charity law and, in some instances, to protect charitable assets. To make sure that we are proportionate and targeted, in an inquiry we ask: 

  • is it necessary for OSCR to take action; and
  • if yes, what type of action is most appropriate for us to take? 

How do we assess concerns?

We receive concerns about charities on a regular basis. Each of these is individually assessed to identify if there are regulatory matters for us to deal with. If there are, we then conduct an inquiry to understand more about what has been happening and to allow us to decide whether we need to act.

Between April and December 2022, we received 454 concerns about charities, of which 153 resulted in an inquiry being opened. In the other cases, we decided that the issue reported to us was not related to our responsibilities under law.

Sometimes our inquiry work can be quite straightforward, but with some cases it can be highly complex and time consuming. This usually depends on:  

  • The number of issues being examined
  • The complexity of the issues involved
  • The amount of information gathered that has to be considered in detail
  • The ease of obtaining the necessary information

In some cases, our experience has shown us that the best way to deal with issues at an early stage is by finding ways of working with the charity or supporting the charity’s trustees to deal with the issues themselves. 

This may involve: 

  • signposting charities to relevant guidance
  • making suggestions to charities about actions they could take

Undertaking an inquiry

In other cases, the inquiry work that we conduct will generally involve:

  • contacting the charity and others for information to help us understand the issues
  • consideration of that information along with any other information we may have access to
  • seeking specialist input on certain issues (e.g. specialist accountants)
  • meeting with charity trustees
  • reaching conclusions based on the information we have gathered
  • deciding what we need to do to deal in response to the conclusions

Our inquiries aren’t always straightforward. Sometimes we may need to repeat some of the steps set out above, for example we may have to contact the charity for information several times if we have further questions after reviewing what has been initially provided. Overall, the aim of our inquiry process is to allow us to build up a good understanding of how the charity is operating and how well the charity trustees understand and are fulfilling their role. All of this is considered when deciding what we need to do in response to the conclusions that we reach.

Those conclusions must be supported by the evidence that we gather. This is important, as charities and the public must have confidence in how we conduct our role and are assured that our approach is appropriate and proportionate to the situation in hand.

What kind of action will we take?

When we have reached a conclusion, we then must exercise our judgement and determine if we need to take any action, and if so, what this should be. Our response should be proportionate to our findings and should aim to stop any serious problems we’ve identified and prevent them from happening again in the future.

In some cases, we will conclude that the actions of the charity trustees have fallen short of the standard that is expected of them. The standards we consider are set out in the Charities and Trustee Investment (Scotland) Act 2005. This law states that if these standards are not met, this amounts to “misconduct in the administration of a charity”. This doesn’t mean that the individuals involved have acted dishonestly. We understand that mistakes can happen, that errors of judgement can easily occur, and that sometimes something goes wrong in running a charity.

Because of this, our response to a conclusion that there has been misconduct in the administration of the charity is often to make recommendations for change and improvement to the charity trustees. Often this relates to the governance of the charity and could include changes to the charity’s policies or procedures to reduce the risk of an issue happening again. The recommendations we make will be appropriate for the charity concerned and will also consider steps that the charity trustees may have already taken to address a problem.

There are rare occasions when the failings of the charity trustees have been wilful and have resulted in significant loss to the charity. When this happens, we can use our legal powers so that the issue is addressed and those responsible are dealt with appropriately. This can range from taking steps to remove a charity from the Scottish Charity Register, or preventing the individuals involved from acting as a charity trustee.

In conclusion, OSCR look at every concern raised with us about the conduct of charities in Scotland, and we aim to take a proportionate and targeted response when we find any issues of concern. Our job is to ensure that we have a charity sector in Scotland which can be trusted and respected, and which positively contributes to our society.