The Scottish charity regulator OSCR recently published its Annual Review for the year to 31 March 2011. The Review sets out the regulator’s activities and statistics for the year, information about the structure and governance of OSCR, and its internal policies. For charities, the most interesting aspects of the Review are likely to be the various case studies which cover such matters as freedom of information; OSCR intervention; and details of unsuccessful applications.
Some of the key figures highlighted in the Review include:-
- of 1,134 applications, 868 bodies were granted charitable status while only 18 were refused;
- 792 charities were removed from the register this year;
- the overall number of charities on the register rose by only 28 to 23,288;
- OSCR granted 968 consents to changes to charities;
- 108 charities applied to have their charity reorganised;
- 7% of charities were told the accounts they submitted were inadequate with 76% passing and 17% being award qualified passes;
- the number of complaints made to OSCR about charities rose to 346 from 310 in 2009-10; and
- only 8 complaints were made about OSCR during the year.
This has been an interesting year for OSCR, with the introduction of the new legal form of charity– the Scottish Charitable Incorporated Organisation (“SCIO”). SCIOs came into existence on 1 April 2011 and OSCR reports that they are anticipating “significant demand” for the new legal form. Unsurprisingly, much of the regulator’s activities in the year have been related to the launch of this new legal form. The majority of their other activities mentioned in the Review involve maintaining and improving the operation of the register. The Review also highlights OSCR’s drive to promote public awareness and confidence in both the regulator itself and the charity sector as a whole.
OSCR has also used the Review to make several policy recommendations for the year ahead. One recommendation is that Ministers should consider a way in which all charities recognised by OSCR may be automatically recognised by HMRC as being entitled to the relevant UK tax reliefs. As it stands, HMRC employs the English definition of charitable purposes when considering whether an organisation is a charity for the purposes of tax relief, and this can cause difficulties for Scottish charities.
Another recommendation is to remove the requirement to audit the accounts of charities where the sole trustee of that charity is a local authority. The accounts of these charities currently require to be audited regardless of their size (unlike ‘ordinary’ charities whose income is less that £500,000 which can have their accounts independently examined).
OSCR has also taken the opportunity to reiterate some recommendations from previous years which have not yet been acted upon by Ministers. This includes the request that Ministers consider amending the charity test to require charities applying to OSCR to have some connection with Scotland. This would be a significant change for applicants and it will be interesting to see whether this recommendation is taken forward.
Looking to the future, the Review also contains the goals and focuses for OSCR in the year ahead. Of these, the highlights are:-
- to consider how OSCR can fulfil their duty of ‘user focus’;
- to consider how OSCR can continue to fulfil their functions whilst encouraging equal opportunities;
- the development of an online reporting system OSCR Online – for more information on this see [link to MF article]; and
- to raise public awareness and confidence in the charity sector.
The Annual Review can be accessed on the OSCR website here.