OSCr

Office of the Scottish Charity Regulator

Enquiry and intervention policy

PART A: INTRODUCTION

1 Context

1. Under section 1 of the Charities and Trustee Investment (Scotland) Act 2005 (the Act) the Office of the
Scottish Charity Regulator (OSCR) is responsible for the regulation of Scottish Charities. OSCR’s function
is the oversight of an effective regulatory framework including the granting of charitable status,
maintenance of a public register of charities, the investigation of apparent misconduct and facilitation and
monitoring of compliance with the Act.

2. OSCR is a Non-Ministerial Department and forms part of the Scottish Administration accountable to the
Scottish Parliament.

2 Aims

1. OSCR’s overall vision is for a flourishing charities sector in which the public has confidence underpinned
by OSCR’s effective delivery of its regulatory role.

2. OSCR aspires to be respected and valued in the execution of our functions and is committed to certain
key values or principles. We are committed to the following values as set out in the Act:

• Proportionate: our actions, procedures and culture will be proportionate to the burden of regulation
on charities of different sizes, to the degree of risk involved and to the potential impact.
• Accountable: we will be proactive in accounting to all our stakeholders, which will include involving
others on a continuous and appropriate basis.
• Consistent: we will act consistently in our decision making and will also aim to act as an exemplar,
observing best practice.
• Transparent: we will continue to reflect a Freedom of Information culture.

And in addition we aim to be:

• Independent: we will maintain our operational independence, acting without fear or favour, in the
public interest.
• Fair: we will exercise our powers and discretion in a way which is consistent, impartial and even
handed.
• Informed: we will gather adequate information from appropriate sources to ensure that our
intervention is properly informed.

3 OSCR supervisory powers

1. Enquiries: sections 28 - 29 of the Act provides OSCR with the power to make enquiries, either generally
or for particular purposes and, for that purpose to obtain various types of information from charities.

2. Intervention: sections 30 - 36 of the Act outline a range of specific powers of intervention, some can be
exercised by OSCR solely and others on application by OSCR to the Court of Session.

3. OSCR has a duty to remove charities who no longer meet the charity test or direct that they take such
steps that OSCR believes necessary for the purpose of meeting the charity test (section 30). OSCR is also
under an obligation to review entries in the Register under section 3(6), which will be substantially carried
out through a rolling review programme, which will commence in 2007.
4. A summary of OSCR’s enquiry and intervention powers and those available through the Court of Session
on application by OSCR are set out in the Appendix.

4 Our approach to regulation

1. OSCR is committed to a regulatory approach which embeds the principle of proportionate action and
encourages charities to identify and address issues of concern. In some circumstances an enquiry will
result in an application to the court if there appears to be misconduct or if it is considered necessary to
protect or properly apply charitable property. However, in general, OSCR will prefer to avoid court action
and to proceed instead by way of making appropriate recommendations to the trustees and monitoring
their implementation.

2. In the long term, we aim to develop a regulatory framework which is not only about intervention but which
establishes standards and promotes good practice across the sector.

5 Expectations of OSCR

This policy sets out how OSCR will exercise the powers of enquiry and intervention, and is intended to
explain what all those with an interest may expect from OSCR.

PART B: OSCR PROCEDURES

6 Monitoring programme referrals

1. OSCR developed and piloted a proactive monitoring programme in 2004. An analysis of responses and
recommendations was published in February 2005. OSCR significantly revised the proposals in light of the
recommendations and piloted a revised monitoring return in late 2005. An analysis of this pilot has
informed the Monitoring Programme which commenced in July 2006 commencing with charities with a
31 March 2006 year end.

2 Where, during the monitoring programme, the response of an individual charity provides cause for
concern, we may follow up with an internal referral to the Investigations or Compliance Support Team and
undertake an enquiry as described in this policy.

7 Internal referrals

1. In the exercise of other OSCR responsibilities, staff may identify issues of concern in relation to an
individual charity. Examples of misconduct or mismanagement of charity trustees might arise in the course
of:

• A consent application for amalgamation or winding up

• An application for a re-organisation
• A formal notification to OSCR

2. As with the monitoring programme, where we identify cause for concern we may refer the matter to the
Investigations or Compliance Support Team and undertake an enquiry.

8 Undertaking an enquiry

1. As indicated, enquiries may be initiated by a referral from within OSCR. Enquiries may also be initiated in
response to a complaint from any other organisation or a member of the public.
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Office of the Scottish Charity Regulator

2. Here we set out how we propose to deal with enquiries into individual charities, including those enquiries
which arise from a complaint by a member of the public, other organisation such as another regulator or a
matter referred by an auditor or independent examiner.

3. As noted, referrals will be either directed to the Investigations Team or Compliance Support Team. The
Investigations Team deal primarily with those charities where there is suspected serious mismanagement
or misconduct, or where charitable assets may be at risk. The purpose of the Compliance Support Team
is to work with charities to enable them to comply with the Act.

4. Whether the enquiry is handled by the Investigations Team or the Compliance Support Team we set out
here how we will approach both those who are subject to enquiry and the complainer:

Charities or individuals which are the subject of enquiry

OSCR will:

• provide a copy of this policy or direct the charity to the policy on the website
• treat charities with respect and discretion
• make the charity and appropriate individuals within the charity aware of the general grounds of any
complaint or cause for concern at the outset, although we may identify and raise additional concerns
during the course of any enquiry
• protect the anonymity if the complainer, where requested
• direct correspondence normally to the charity contact person, although in the course of enquiry we
may ask for information from any Trustee or person connected with the charity or appropriate public
bodies
• take all reasonable steps to minimise disruption to the work of the charity, its staff, volunteers and
trustees during the enquiry
• give the charity the opportunity to respond to any concerns or complaints
• ensure that guidance is offered where needed
• make clear which recommendations are mandatory, which are desirable and the timescale for
compliance
• provide a formal report where directions or suspensions are made under the Act.

Complainers

OSCR will:

• treat complainers with respect and discretion

• provide a copy of this policy
• not disclose a complainers identify without permission, unless legally obliged to do so. In some
cases the nature of the complaint may give the trustees an indication as to its source
• where a complainer has brought the matter into the public domain, we will balance our commitment
to openness with respect for the rights and interests of those complained against
• acknowledge all correspondence and respond to enquiries in a manner and to a degree which is
proportionate having regard to the specific requests made and the resource implications for OSCR
• provide complainers with a copy of our file note of any interview we have with the complainer
• at the conclusion of an enquiry, advise the complainer of the outcome of the enquiries.
9 Information provided for enquiries

It should be remembered by all those who either complain or are involved in an enquiry, the importance of
providing correct and credible information.

It is an offence under the Act for a person to provide any information or explanation that is false or misleading
in a material respect, or to destroy or conceal any document which is required for the conduct of OSCR’s
enquiries.

10 Initial assessment

1. When an internal referral is made or a complaint received about a charity, OSCR will assess it seriousness
so that a decision is made as to what level of enquiry and intervention is required. OSCR acts in the
public interest, not on behalf of individuals or groups.

2. Generally, OSCR will not intervene where it is the responsibility of the trustees to deal with problems or
disagreements. In particular, we will not normally intervene in disputes between trustees and members of
a charity, or in relation to employment or contractual issues.

3. Matters relating to service delivery within a charity should normally be dealt with through the charity’s own
complaints procedures. For activities supervised by other regulators we will forward or direct a complainer
to another supervisory organisation if we are satisfied that it will be able to deal with the matter more
effectively than OSCR. Communities Scotland has delegated supervisory powers under the Act for
Registered Social Landlords and OSCR will direct appropriate concerns and complaints to them.

4. Where the issue of concern appears to require only advice or guidance, the Compliance Support Team
will work with the Trustees to facilitate compliance with the Act.

5. The Investigations Team will conduct the enquiry where a concern or complaints relate to:

• Loss or misuse of material assets or resources of the charity

• Serious or sustained mismanagement or misconduct by those in management and control of the
charity

6. Where there are allegations or evidence of criminal activity the matter will be referred to the Crown Office
under the terms of a joint protocol.

11 Section 33 reports on enquiries

1. OSCR must prepare a report on enquiries where a direction or suspension under sections 30 or 31 of the
Act is made, and must provide the report to the charity or the individual subject to enquiry. Such reports
will also be published on the OSCR website linked to the notice of direction or suspension within the
charity entry on the Register. Apart from identifying the person in respect of whom the enquiries were
made, the report will not mention the names of any individuals or contain any particulars which are likely
to identify any other person.

2. The charity or individual complained about will receive the report on finalisation. The complainer will be
notified of the outcome and publication of the report.

3. OSCR will consider publishing other enquiry reports on the website, where there are lessons which have a
wider impact on the charity sector. These may be either individual cases where no direction or suspensions
were made or grouped reports covering a number of cases reflecting a common issue of concern.
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Office of the Scottish Charity Regulator

12 Timescales

1. We will usually notify the charity within 14 days of receipt of a complaint and seek essential information
which other than in exceptional circumstances, we would expect to receive within 21 days of the date of
OSCR’s letter.

2. OSCR will exercise its discretion not to take any complaint forward where in OSCR’s view, there are no
reasonable grounds for doing so. In these circumstances, we would write to the complainer and advise
them accordingly.

3. We aim to conclude enquiries within as short a period as is possible and, generally within 6 months.
However the nature of some enquiries particularly those under taken by the Investigations Team may be
both complex and requiring input from multiple sources or court action. We therefore aim to conclude
75% of complaints within 9 months.

4. For the purposes of this policy, we identify the conclusion of an enquiry as:

• A decision by OSCR that no action is necessary and that the enquiry has been satisfied.
• Recommendations and a report, as appropriate, have been sent to the charity and we have a
satisfactory assurance of future action from the charity.
• An application by OSCR to the Court of Session unless there are other matters which require further
enquiry while the court action is ongoing.
• Action taken by the police or Crown Office.

5. We recognise this may not be the final disposal, e.g. on a few occasions there may be further reason for
OSCR to intervene. However, this strikes a balance, providing both the charity and the complainer with an
assurance that the matter has been dealt with, and reducing case management requirements for OSCR at
an appropriate point.

13 Public transparency

1. OSCR is a Non-Ministerial Department, and forms part of the Scottish Administration accountable to
Parliament. Governance of OSCR rests with the Board of six members.

2. Formal direction and suspension notices to a charity will be entered on the Charity Register with linked
reports.

3. Where we exercise statutory powers with consent of the court, this will automatically be in the public
domain. We will also reflect such action against the charity entry on the Register.

4. At any time we may issue press statements or reports about individual enquiries or the exercise of
intervention powers, whether or not there has been an application to the court.

5. Any press statement or report about individual enquiries will be framed taking into account the rights of
organisations and individuals concerned.

6. We will also respond to any requests for information in accordance with our obligations under the
Freedom of Information (Scotland) Act 2002.

7. We intend from time to time to issue thematic reports drawing on the experience of investigating
complaints, undertaking enquiries as well as the lessons of the monitoring programme to highlight issues
of wider public interest.
14 Potential conflicts of interest

OSCR has an innovative staffing policy and we have several staff who have recent involvement in individual
charities, whether as a member of staff, trustee or auditor. We have developed a policy for managing conflicts
of interest in order to ensure that we avoid any situation where any member of staff might be involved
inappropriately in an enquiry into an individual charity with which they have had recent involvement.

15 Complaints

Complaints about OSCR should be addressed to:

Head of Resource Management

OSCR
2nd Floor
Quadrant House
9 Riverside Drive
DUNDEE DD1 4NY
 OSCr
Office of the Scottish Charity Regulator

Appendix
OSCR Enquiry or Intervention Powers

Brief Description of Power Source: Charities and Trustee

Investment (Scotland) Act 2005

Review entries in the charity Register s. 3 (6)

Direct a charity to change its name; remove where non s. 12 (2), (3) & (5)
compliant

Direct a charity not to take action in a consent matter s. 16 (6)

pending further enquiry

Obtain information for Register entry purposes s. 22 (1)

Make enquiries, either generally or for particular s. 28 (1)

purpose

Direct any charity, body or person from undertaking s. 28 (3)

activities for a period of 6 months while making
inquiries

Obtain information for enquiries s. 29 (1)

Direct a charity to take action to meet the charity test s. 30 (1) (a)
within a specified period

Remove a charity from the Register s. 30 (1) (b) & s.30 (3)

Suspend any person concerned in the management or s. 31 (4)

control of a charity for a period of 6 months

Direct anybody misrepresenting themselves as a s. 31 (5)

charity to stop doing so

Restrict transactions of a charity s. 31 (6)

Direct that property not be parted with s. 31 (7) and s. 31 (9)

Direct person to cease acting on behalf of a charity s. 31 (8)

Appoint a suitable person to prepare accounts s. 45(2)

Direct a charity to recover remuneration in s. 67 (7)

contravention of section 67
Powers of the Court of Session on Application by OSCR

Brief Description of Power Source: Charities and Trustee

Investment (Scotland) Act 2005

Approve a scheme presented by OSCR for transfer of s.19 (4) and s.35 (1)
any assets to another charity

Interdict the charity or body from such action as the s. 34(5)(a)

court thinks fit

Interdict the body from representing itself as a charity s. 34(5)(b)

Appoint a judicial factor s. 34(5)(c)

Appoint a trustee s. 34(5)(d)

Suspend or remove any person concerned in the s. 34(5)(e)

management of the charity

Order any financial institution or individual not to part s. 34(5)(f)

with property without the courts consent

Make an order restricting transactions, which may be s. 34(5)(g)

entered into or the nature or amount of payments,
which may be made in the administration of a charity
without the courts consent

Interdict a person from representing a body as a s. 34(5)(h)

charity or from such other action as the court sees fit

Interdict the charity from representing itself or a person s. 34(5)(i)

from representing the charity as being established
under the law of Scotland

Where misconduct by person outlined in s. 28(1)(d), s. 34 (8) & (9)

interdict that person from acting, or representing itself
as acting, on behalf of the charity or body; order the
person to pay sums to the charity; order any financial
institution not to part with such property without
consent

Order to a financial institution not to part with property s. 36 (2)

belonging to and English and Welsh charity

Order the transfer of property attached under s36(2) to s. 36 (5)

a specified charity

Astron B49044 11/06