Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 60-79)



  60. What is your definition of the word "significant" then?
  (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.[5]

  63. And there are no guidelines at all for those people?
  (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 Commission?
  (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.[6]

  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.[7]

  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 accounts.
  (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 accounts?
  (Mr Stoker) There are small numbers. There are small differences between the return rates for accounts and for updates.[8]

  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 the report.

  76. Why?
  (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 not?
  (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

6   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

7   Ev 18-19, Appendix 1. Back

8   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

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 3 July 2002