Examination of Witnesses (Questions 60-79)|
WEDNESDAY 28 NOVEMBER 2001
60. What is your definition of the word "significant"
(Mr Stoker) It is a case by case issue really.
61. You must have a rule of thumb.
(Mr Stoker) I would not care to give a hard and fast
rule of thumb.
62. Most organisations I know would have some
kind of de minimis definition and you would not pursue
something that was de minimis, but say it was £5,000
or £10,000 or £250,000 or whatever, who makes the decision
not to pursue an asset because it is not significant in your words?
(Mr Stoker) It would be the case officer and line
managers who would make that decision.
63. And there are no guidelines at all for those
(Mr Stoker) They would take into account basically
what appeared to be at stake in terms of assets that might have
been there in the past together with the likelihood of actually
being able to track them down and the cost in terms of Commission
resources in doing so. It is the kind of calculations that regulators
are making all the time.
64. I understand that. I would be interested,
I do not know if the Committee would be, in a further note as
to how that operates. Is it not possible then that some case officers
are pursuing sums of money that other case officers would not
pursue since there are not guidelines across the whole of the
(Mr Stoker) In every case you have a judgment which
has been made by the individual so I would not claim that it is
going to be perfectly consistent right across the board. All I
would say is there are so many differing factors that can apply
in any particular case that the sum of money is not the only comparison.
65. There are two views on that. One is if you
leave things to discretion you will get very large variations
in practice. I think that is a view that probably should be taken
and I would have thought some sort of guidelines should have been
given. I just want to follow up on another issue. You are supposed
to get, as I understand it, two pieces of paper per year from
each charity, one is a Register update and the other one is the
annual accounts. Presumably quite a few charities manage to produce
one but not the other in any one year. In relation to this four
year trigger that you were just speaking about, would the receipt
of just one of these documents be sufficient to delay the trigger
mechanism or do you require compliance in both matters?
(Mr Stoker) If they had been out of touch for four
years and we had not chased them up already because they had not
sent us accounts they would be at the level where they did not
have to send us accounts.
66. In your earlier answers you were saying
you might have received a Register update or the annual accounts
but then you were talking about a four year trigger. I was unclear
in my mind that you were clear that you would pursue them.
(Mr Stoker) Yes.
67. If you received the Register update you
might think "it is an active charity and we are not going
to pursue it at this stage", so a number of years might pass
beyond the four years when you have not received the accounts.
That is the point I am trying to make.
(Mr Stoker) If we have not had the update within four
years we would be pursuing these charities.
68. Let us just be clear about words then because
you just said the "update". I assume that means there
are charities which have regularly updated their Register but
have failed to lodge their accounts and are not pursued because
at least you know something is happening and the updates have
been received. You just said if the update is received you would
not pursue them.
(Mr Stoker) If they have been sending us their updates
and not their accounts we would not pursue them thinking that
they were inactive, but if they had been sending us their updates
and not their accounts and they were above the £100,000 a
year enforcement threshold we would have been chasing them as
soon as they became due.
69. I think I am clear in my own mind and I
am glad I asked the question. It just seemed to me in a case where
they were updating the Register but failing to deliver the accounts
you primarily keep on sending the reminders. I think you then
said that the number had been reduced from 18,000 down to 700.
(Mr Stoker) Yes.
70. What figure was that relating to?
(Mr Stoker) That is relating to the charities which
we had not heard anything about for a long time, the apparently
inactive charities on the Register.
71. So they are people who had not done a Register
update or an annual account?
(Mr Stoker) Yes.
72. But there may be significant numbers of
others, or not, we do not know unless you can tell us, which are
continuing to update the Register but failing to submit their
(Mr Stoker) There are not large numbers of those.
73. How do you know?
(Mr Stoker) Because we track the numbers that we get
and we stratify the returns that we get for each annual round
according to different size ranges.
74. How many charities with less than £100,000
income have updated the Register but failed to deliver their annual
(Mr Stoker) There are small numbers. There are small
differences between the return rates for accounts and for updates.
75. I want to move on into another area which
is the issue of the Commission's use of inquiry powers which has
declined, has it not, substantially over recent years?
(Mr Stoker) Yes, I cannot argue with the figures in
(Mr Stoker) It is difficult to tell why they have
declined. It is not that there has been any kind of signal from
the Board of Commissioners or the management that they are not
there to be used.
77. But they have declined though, have they
(Mr Stoker) They have, yes.
78. Why have they declined?
(Mr Stoker) I do not know why they have declined.
Basically what we have here is a set of investigations which are
being managed in each case by inquiry officers. They run against
whatever difficulties they find in a particular investigation
and they know they have got that panoply of powers there available
if they want them. The message that we are putting out is if genuinely
using those powers will help to close an investigation then investigating
officers should be using them.
79. I might just suggest to you that if I was
a manager of a large body like this this would be exceedingly
important management information from which I might draw lessons.
You have not drawn lessons because you have not asked the question
as to why this has declined. There is one particular power that
has never, ever been used, and it is very striking because I think
it would be a useful power, the imposition of external auditors.
Given the fact that you have got limited resources, you just told
us that you have made a successful bid but you also pointed out
that you have been capped for six years, it seems to me it would
be quite a useful power to exercise since I do not suppose the
cost falls on the Commission but rather on the charity to see
external auditors being imposed on some of these things. Given
the fact that we have got delays all over the place in your organisation,
have we not, the use of external auditors might well be a way
of accelerating progress in a number of areas. Why have you never
used that power?
(Mr Stoker) I do not know why that power has never
been used, to be perfectly frank.
5 Note by witness: Internal guidelines do set
out the criteria for removal and the de minimis asset level
set at £2,500. My apologies to the Committee for my answers
not reflecting that on the day. Back
Note by witness: Internal guidelines do set out the criteria
for removal and the de minimis asset level set at £2,500.
My apologies to the Committee for my answers not reflecting that
on the day. Back
Ev 18-19, Appendix 1. Back
Note by witness: At September 2001, for accounting periods
ending between March 1999 and February 2000, 1% fewer charities,
with income or expenditure between £10,000 and £100,000,
had submitted register updates than had submitted annual returns
and accounts. Back