The Charity Commission has insisted it will continue to prioritise the most serious risk to the sector and its reputation, despite its funding constraints.

In its annual regulatory compliance report, Charities Back on Track, which was published yesterday, the Commission outlined more detail about how its regulatory activity would operate going forward.

It said: “Taking action to deal with the areas of most serious risk to the sector and its reputation will remain a priority.  This will consist of a strong focus on fraud, financial mismanagement, threats posed by terrorism and any risk to vulnerable beneficiaries.”

The regulator said its new, flatter structure with fewer layers of decision-making would enable it to “deal more effectively with issues coming into the Commission and clarifying which issues are or are not for us to engage in”.

It said the new structure would provide a “filter” for issues raised and that a new "over-arching risk framework" will be introduced.

“We will have an enlarged ‘first contact’ function that will aim to resolve the majority of issues raised with us. This will include signposting to relevant online services and advice and guidance on the Commission’s website, signposting to umbrella bodies where appropriate or to other regulators and explaining where issues are not within our remit or should be taken up with the charity itself.”

If an issue requires intervention by the Commission, it will be passed to one of the four multi-discipline operational teams. They will deal with all but the most serious cases, which will be referred to a dedicated investigations and enforcement function.

This function will “draw on the specialist knowledge and skills within the Commission to deal effectively with the areas of most serious risk to the sector and public trust and confidence in it, including where necessary opening a statutory section 8 inquiry”, the regulator said.

"We will also introduce a new over-arching risk framework to which the Commission will work going forward.  In terms of casework, this clarifies how we assess risk, what factors we will take into consideration , and what the most effective way of dealing with that issue should be."