The Charity Commission is stepping up its enforcement action, announcing that the trustees of 12 charities which have not filed their documents for two years, could face criminal prosecution and incur financial costs from the regulator.

Today, at the Commission's annual general meeting, chief executive Sam Younger will reveal the names of 12 charities which have been placed under a class inquiry for not filing financial information with the regulator for two years or more.

In recent weeks, the Charity Commission has been contacting charities with a last known income over £500,000, that have failed to file annual documents for two or more of the last five years, and warning them that that failure to file will lead to the regulator opening an inquiry.

Some 86 charities have been identified as being in “double-default” with their reporting requirements.

Of these –

•    16 have dissolved with Companies House;
•    a further 32 are identified as being in liquidation or in administration and the missing and final accounts will be prepared as part of the liquidation process;
•    two have ceased to exist.

Some 12 remaining charities, to be announced this afternoon, have been issued with a formal legal direction to their trustees, ordering them to file financial information. The Charity Commission has said if they do not comply it will make a referral to the police for criminal prosecution unless trustees can show they took reasonable steps to secure compliance.

The Charity Commission has also said it may exercise its legal powers to appoint an interim manager to ensure compliance, and seek the costs from trustees.

Sam Younger, chief executive of the Charity Commission, said:
“This move should come as no surprise to the charities under investigation or to the wider charitable sector.

"The Commission sends numerous reminders and regulatory advice warnings to charities in default. We have also been signalling our tougher approach to defaulters for over a year and have more recently issued clear public warnings to all repeat offenders to submit their annual documents.

"This latest enforcement step sends an unequivocal message that we will not tolerate charities that demonstrate contempt for the public they are accountable to, by failing to meet reporting requirements.  We know that failures in this area are often linked to wider financial mismanagement. In some cases the excuses given by the charities are frankly poor.”
  
The Commission says it has begun by targeting double-defaulters with incomes of over £500,000 and will move on to investigate any other outstanding double-defaulters.