OSCR and Targeted Regulation: important changes to charity reporting

Updated October 2016.

The Office of the Scottish Charity Regulator (OSCR) has new reporting requirements for charities, which came into effect from 1 April 2016. These requirements apply to all charities, so it’s important that you understand the changes: please contact us if you need any guidance or have any questions.

A new focus on regulation

The requirements are the result of a consultation that began in 2014 and led to a new Targeted Regulation framework, published in 2016. This framework resulted in a number of important changes which have applied from 1 April 2016, but the framework isn’t intended to be fixed in stone – OSCR says that it will evolve over time so there are likely to be additional changes to charity reporting in the near future.

‘Targeted Regulation’ essentially means that OSCR is focusing its efforts on the key issues of protecting charitable assets and beneficiaries as well as the integrity of charitable status. It is these issues which they consider to have the most potential to undermine public confidence in the sector and recent high-profile cases of charity failure highlight the importance of appropriate focused regulation.

New requirements from 1 April 2016

New annual return form

Since 1 April there is a new online Annual Return Form. OSCR say that it does not involve any more questions than before, but that the nature of the questions is different. There are sections that only apply to charities with income over £25,000 and £250,000. To help people complete the form OSCR has issued accompanying guidance.

Notifiable events

This new rule requires charities to notify OSCR when there is a ‘notifiable event’, which OSCR defines as an event which ‘has a significant impact on your charity’ or its assets (such as a substantial financial loss, fraud, or suspicious donations). This is one of the more notable features of the new regulatory framework: read more about it on our dedicated ‘Notifiable events’ page, and also in OSCR’s guidance.

Publishing reports and accounts

From 1 April OSCR has started to publish the reports and accounts of charities with an income of over £25,000, and all SCIOs (Scottish Charitable Incorporated Organisations), on its charity register. This is part of the attempt to maintain or improve levels of public confidence in charities, reasoning that transparency will provide extra useful information and improve accountability. They say: “Charities won’t have to do any more, but it is actually an opportunity to get more information out there about their work and the impact it is having…While we have been delighted by the fact that the financial component of the accounts coming to us have improved significantly over the 10 year period, there is still work to be done to try to develop reports that really show the public the effect their money and voluntary time is having.”

OSCR also intends to introduce new guidance to improve the quality of the narrative reporting by charities.

Other OSCR news: recently-published guidance
OSCR have also recently published additional guidance documents: