The Scottish charity regulator marks first ten years with new monitoring regime

Young people in business meeting
By Christine Scott, Assistant Director, Charities and Pensions

3 May 2016

The Scottish charity regulator, OSCR, has reached a significant milestone: it’s now ten years since it acquired its statutory powers.

OSCR’s experience as a regulator and improvements in financial reporting have contributed to the development of a new, more targeted, regulatory approach from 1 April 2016.

OSCR’s presence turned a spotlight on the quality of trustees’ annual reports and accounts driving up levels of compliance with Scottish charity law requirements.

ICAS members have made a significant contribution to these improved standards in their roles as charity trustees, as senior members of charity finance teams and as advisors. However, while the following stats are positive there remains room for improvement.

In 2007, OSCR reports that only 20.4% of charities with an income of under £25,000 and 66.2% of charities with an income over £25,000 met the legal requirements for the preparation of annual reports and accounts.  By 2015, the figures reached 78% and 83% respectively.

OSCR will now publish the annual reports and accounts of all but the smallest charities on its website.  This has potential to increase the level of public scrutiny of the sector and should act as an impetus towards even greater levels of compliance.

The new regulatory approach is underpinned by ‘The Targeted Regulation Framework of the Scottish Charities Regulator’ (‘The risk framework’).

Other developments include:

  • a new annual return form;
  • the commencement of a notifiable events reporting regime; and
  • the publication of the annual reports and accounts for certain charities on the OSCR website.

The risk framework

Targeted regulation is about OSCR prioritising its regulatory activities towards those it believes will support public confidence in the charity sector.

OSCR has identified two key themes or ‘clusters of issues’ in support of this objective:

  • the protection of beneficiaries and charitable assets; and
  • the protection and integrity of charitable status.

OSCR says the following about the framework in practice:

“The framework will be used as a tool to ensure that both our proactive and reactive activities are influenced and prioritised.  It will help us to introduce a consistent approach across our organisation and help us to detect and deal with problems in a more focused way.”

Annual return form

The new annual return form must be completed by charities filing from 1 April 2016 onwards. There are a number of new questions which reflect the more targeted approach articulated in the risk framework.

Most charities will have to answer no more questions than before, with many having to answer fewer questions.

Notifiable events reporting regime

OSCR is asking charity trustees to report details of events which have happened or are happening at their own charity which have a significant impact on the charity or its assets and beneficiaries.  OSCR has prepared guidance to assist charity trustees determine which events are significant in the context of the charity.  OSCR does not envisage becoming involved with every charity submitting a report. Instead, OSCR will consider each report received and will only contact the charity trustees if it believes additional support is required.

However, there is no legal requirement for charity trustees to comply with the notifiable events reporting regime.  This regime is also entirely separate from the whistleblowing provisions in the 2005 Act which apply to independent examiners and auditors.

Any charity registered with OSCR which is also registered with the Charity Commission for England and Wales or the Scottish Housing Regulator should not report any notifiable events separately to OSCR as information sharing arrangements are in place under Memoranda of Understanding.

Publication of annual reports and accounts

At first, OSCR will publish, on its website, the annual reports and accounts of charities with an income of £25,000 and over, and of all Scottish Charitable Incorporated Organisations: personal and sensitive information will be redacted before publication.

Alternatively, if a charity publishes its annual report and accounts on its website, the charity can share the hyperlink on the Annual Return form and OSCR will publish the hyperlink on the Scottish Charity Register.


  • Charities

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