Anyone who has attended our Charity Law Annual Update seminars over the past few years, or has read previous blogs, will have heard me banging on about the importance of charities filing your annual returns with the Charity Commission on time. Particular emphasis has been on avoiding becoming a "double defaulter" - a charity that fails to file annual returns on time in two consecutive years.
It was initially suspected that the Charity Commission may issue double defaulting charities with an automatic official warning. This has so far not been the case. However, a recent statutory inquiry opened by the Commission highlights the dangers of late filing.
On 26 February, the Commission opened a statutory inquiry into The Islamic Society of Blackburn. The inquiry has been opened as a result of a consistent failure by the charity to comply with its reporting obligations.
As part of the Commission's inquiry, steps will be taken ensure that reporting obligations are fulfilled however, as the statement from the Commission below demonstrates, all aspects of the charity's management and administration are now under review. This could lead to the Commission identifying a range of additional concerns that might result in more serious regulatory steps being taken.
It is of course possible that the Commission may not find any additional issues in respect of the governance of this charity. However, by failing to comply with the reporting obligations the trustees have brought on this inquiry, exposing themselves to significant regulatory scrutiny.
The lesson for other charities is very simple. File your annual return and accounts on time!
In addition to obtaining the overdue accounting information the inquiry will seek to ensure that the trustees comply with their legal duties to file future account submissions within the statutory deadlines and examine broader aspects of the charity’s administration and management to ensure it is being properly managed by the trustees.