Reporting matters of material significance Laura Anderson Head of Enforcement, Scottish Charity Regulator

The basics All independent examiners and auditors of Scottish charities have a legal duty to report matters of material significance to OSCR Legal duty stems from section 46 of the 2005 Act Covers all charities and all independent examiners and auditors Duty to report matters of material significance Discretion to report other matters

More detail about reporting Preferable to make the report in writing. Send confidentially by email to section46@oscr.org.uk Provide as much information and detail as possible but don’t delay unnecessarily to gather information Our expectation is that independent examiners and auditors fulfil their duties and use their unique position appropriately to help us regulate We take a dim view of those who fail in their duties – you have a part to play in effective regulation

Current consultation UK-wide consultation on the matters that must be reported Changes are based on regulatory experience and the establishment of a regulator in Northern Ireland Consultation open until 11 September

The matters to be reported (1) Matters suggesting dishonesty or fraud involving a material loss of, or a material risk to, charitable funds or assets Failure of internal controls, including failure in charity governance that resulted in/could give rise to, a material loss or misappropriation of charitable funds Knowledge or suspicion that the charity or charitable funds have been used for money laundering or such funds are the proceeds of serious organised crime or that the charity is a conduit for criminal activity Matters leading to the knowledge or suspicion that the charity, its trustees, employees or assets, have been involved in or used to support terrorism or proscribed organisations Evidence suggesting that the charity’s beneficiaries have been or were put at significant risk of abuse or mistreatment

The matters to be reported (2) Single or recurring breach(es) of either a legislative requirement or of the charity’s trusts leading to material charitable funds being misapplied Evidence suggesting a deliberate or significant breach of an order or direction made by a charity regulator under statutory powers On making a modified audit opinion, emphasis of matter or qualified independent examiner’s report, a report setting out the nature of the issue with supporting reasons and notification of the action takenby the trustees subsequent to that opinion/report Evidence that, without reasonable cause, trustees have not taken action on matters identified by the auditor or examiner in their scrutiny of accounts for a previous year Evidence suggesting that conflicts of interest have not been managed by the trustees in accordance with guidance issued by the charity regulator and/or related party transactions have not been fully disclosed in all respects required by the applicable SORP.

Feedback needed on… Are these the correct matters that should be reported to the charity regulator? Are the matters described in a clear and helpful way? Are there any other matters which should be included or should any be removed?

Thank you for listening Final reminders: Consultation open until 11 September Respond by email or post Take the opportunity to have your say Thank you for listening