4.3 version 3

1. Supervision of Scottish CharitiesA guide to the functions and powers of OSCR and the Court of SessionFor advisors of small charities 4.3 version 3

2. The functions of OSCR • What are the general functions of OSCR? • to determine whether bodies are charities • to keep a public register of charities • to encourage, facilitate and monitor compliance of charities with the provisions of the Act • to identify and investigate apparent misconduct in the administration of charities and to take remedial or protective action • to give information or advice, or to make proposals to Scottish ministers 2

3. The Scottish Charity Register • OSCR’s functions and powers with regard to the Scottish Charity Register • to keep the Scottish Charity Register -section 3(1) • to apply the charity test to new applicants and where passed, enter the applicant as a new charity in the Register - section 5(1) • to periodically review each entry on the Register and amend accordingly (the ‘Rolling Review’) – section 3(6) • to ensure public access to the Register - section 21 • to obtain information from charities in relation to the entry in the Register - section 22 3

4. Charity names • OSCR’s functions and powers with regard to charity names • to refuse an applicant charitable status if it has an objectionable name - section 5(2) • to direct a charity to change its name - section 12(2) and (3) • to remove from the register any charity that fails to comply with a direction to change its name - section 12 (5) 4

5. Consent to changes • OSCR’s functions and powers with applications for consent to changes • to consider applications for consent from charities seeking to make specified changes and to either: • grant consent • refuse consent • direct a charity not to take action for which consent is sought for a period of up to six monthssections 11 and 16(6) 5

6. Making inquiries • Who may OSCR make inquiries about? • OSCR may at any time make inquiries, either generally or for particular purposes, with regard to: • a charity • a body controlled by one or more charities • a body not entered in the register which appears to OSCR to represent itself as a charity • a person who appears to OSCR to represent any of the bodies listed above 6

7. Making inquiries Sources of referrals and complaints 7

8. Making inquiries Most prevalent issues 8

9. Making inquiries • Inquiry & intervention Policy • Handling complaints: Background • OSCR asks in the public interest and not on behalf of individuals or groups • OSCR will seek to ensure that any information passed to OSCR by a complainant or anyone involved in an inquiry is correct and credible • It is an offence under the Act for a person to provide any information or explanation that is false or misleading in a material respect, or to destroy or conceal any document which is required for the conduct of any inquiry OSCR may undertake 9

10. Making inquiries • Inquiry & intervention Policy • Handling complaints: Assessment to establish the following - • Whether OSCR has locus to act • If the complaint is more appropriate for another regulator to action • The seriousness of risk associated with the issues raised by the complainant • The action and intervention required (which will be proportionate to the risk(s) presented) 10

11. Making inquiries • Inquiry & intervention Policy • Handling complaints: Risk Assessment • Assessment is based on the evidence available • Initial background inquiries • May contact the charity to help with understanding any of the information received Next course of action then determined. 11

12. Making inquiries • Inquiry & intervention Policy • Handling complaints: Risk Assessment – four potential outcomes • The complaint merits further inquiry work to be undertaken by a Compliance Officer or Investigator depending on seriousness • The complaint is more appropriate to another regulator and will be either passed to them direct or the complainant will be re-directed • OSCR determines that, based on the evidence provided, no action is appropriate • The complaint is deemed to be for the charity to resolve through its own complaints procedure 12

13. Making inquiries • What powers does OSCR have when making inquiries? • to direct any person or body with regard to which it is making an inquiry not to undertake any actions specified in the direction for up to six monthssection 28(3) • to require by written notice any person to provide it with any document, extract, other information or explanation necessary for the inquiry within 14 dayssection 29(1) 13

14. Following inquiries • On what grounds can a complaint be upheld following an inquiry? • a body appears to OSCR not to meet the charity test • there appears to OSCR to be misconduct in the administration of a charity or a body controlled by a charity • that action is necessary to protect a charity’s property or secure its use for proper purposes • a body or a person representing a body is making false or misleading claims about the body’s charitable status 14

15. Following inquiries • What happens if a body appears not to meet the charity test? • OSCR must either: • direct the body to take steps to meet the charity test, OR • remove the charity from the Register • section 30(1) • if the body fails to comply with a direction OSCR must remove it from the Register • section 30(3) 15

16. Following inquiries • What happens if a body is making false or misleading claims about its status? • OSCR may: • direct the body to stop doing so • restrict the transactions which may be entered into, or the nature or amount of payments which may be made, in the administration of the body without OSCR’s consent • direct any bank or person holding property on behalf of the body not to part with it without OSCR’s consent 16

17. Following inquiries • What happens if a person representing a body is making false or misleading claims about its status? • OSCR may: • direct the person to stop making the false or misleading claims about the body • direct the person to stop acting (or claiming to act) on behalf of the body • direct the person to pay to the body any sums collected on its behalf • direct any bank or person holding property on behalf of the body not to part with it without OSCR’s consent 17

18. Following inquiries • What happens if OSCR identifies misconduct in the administration of a charity? • OSCR may, by written notice, suspend any person concerned in the management or control of a charity or a body controlled by a charity who: • has been responsible for or privy to the misconduct • has contributed to or facilitated the misconduct • is deemed unable or unfit to perform that person’s functions in relation to the property of the charity or body 18

19. Following inquiries • Procedure for directions and suspensions • Suspensions and directions made by OSCR under section 31: • have effect for a specified period not exceeding 6 months • may be revoked at any time • may be varied at any time, but not so as to extend their period of effect beyond 6 months • may be added to by further suspensions or directions but not to extend beyond the date of the original 19

20. Following inquiries • Procedure for directions and suspensions • any suspension of a person and any direction issued to a person must also be copied to the charity or body in question • notice of a direction or suspension under section 31 must: • set out the decision of OSCR • give reasons for the decision • advise the recipient of their right to request OSCR to review the decision with 21 days 20

21. Following inquiries • What powers does OSCR have in the case of a charity not sending it annual accounts? • to appoint a suitably qualified person (an ‘appointed person’) to prepare a statement of account for the charity • to charge the trustees personally for any costs it incurs in relation to such an appointment • (section 45) 21

22. The Court of Session • What powers does the court have? • interdict a charity or body from any action including representing itself as a charity • appoint a judicial factor to manage the affairs of the charity • appoint a trustee • suspend or remove a person in management of a charity or body • place a restricting order on any transactions or payments • order a bank or person holding property not to part with it without consent • interdict a person from any action including representing a body as a charity • order a person to pay to a charity money collected on its behalf 22

23. Transfer schemes • What is a transfer scheme? • a scheme prepared by OSCR to transfer to a charity any assets of: • another charity • a body controlled by one or more charities • a body which is not a charity but which has been representing itself as such • requires approval of the Court of Session 23

24. Transfer schemes • When will the court approve a transfer scheme? • there is or has been misconduct in the administration of a charity or body, or any of the charities that control it • it is necessary to act for the purpose of protecting the property of the charity or body • the transfer provided for by the scheme is reasonable 24

25. Delegation of functions • OSCR may delegate certain of its functions under the Act to any Scottish public authority with mixed functions or no reserved functions • PROVIDED THAT such body has other statutory regulatory functions with regard to the charities or type of charity • any charities affected by such delegation must receive a copy of the authorisation • provisions in the Act relating to disclosure of information to and by OSCR also apply to other public bodies with delegated functions 25

26. Delegation of functions • Which functions may OSCR delegate? • making inquiries and obtaining information for such inquiriesunder sections 28 and 29 • issuing directions or suspending persons from acting in the management of a charity or bodyunder sections 31 and 32 • making reports on inquiriesunder section 33 • making applications to the Court of Session to exercise its powers or to approve a transfer schemeunder sections 34 and 35 26

27. Consequences of non-compliance • What are the consequences for charities and trustees in breach of their duties under the Act or regulations? • removal from the Scottish Charity Register • fines and / or periods of imprisonment for trustees and other failing to comply with directions or provide required information • personal liability for the costs incurred by OSCR or others appointed by OSCR • suspensions, removal or disqualification from acting as a trustee 27