Corporate report

Charity Commission framework document 2023

Published 16 June 2023

© Crown copyright 2023

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This publication is available at https://www.gov.uk/government/publications/charity-commission-framework-documents-2023/charity-commission-framework-document-2023

This framework document was drawn up between the Department for Culture, Media and Sport (DCMS) and the Charity Commission. It sets out:

  • the governance and accountability arrangements between DCMS and the Charity Commission
  • core responsibilities and roles

Attached to the framework document is a memorandum of understanding between the departments concerning DCMS’s role as principal regulator of sponsored national museums and galleries.

Introduction and background

1. Purpose of document

1.1. This framework document (the “framework document”) has been agreed between the Department for Culture, Media and Sport (“DCMS”) and the Charity Commission for England and Wales (“the Charity Commission”) in accordance with HM Treasury’s handbook Managing Public Money (as updated from time to time) and has been approved by HM Treasury. DCMS is the sponsor department for the Charity Commission.

1.2. The framework document:

  • sets out the broad governance framework within which the Charity Commission and DCMS operate
  • sets out the Charity Commission’s core responsibilities
  • describes the governance and accountability framework that applies between the DCMS and the Charity Commission
  • sets out how the working relationship works in practice, including governance and financial matters

1.3. The framework document does not convey any legal powers or responsibilities, but both parties agree to operate within its terms.

1.4. References to the Charity Commission include all its subsidiaries and joint ventures that are classified to the public sector and central government for national accounts purposes.[footnote 1] If the Charity Commission establishes a subsidiary or joint venture, there shall be a document setting out the arrangements between it and the Charity Commission, agreed with DCMS.

1.5. Copies of the document and any subsequent amendments have been placed in the libraries of both Houses of Parliament and made available to members of the public on gov.uk.

1.6. This framework document should be reviewed and updated at least every three years unless there are exceptional reasons that render this inappropriate that have been agreed with HM Treasury and the Principal Accounting Officer of DCMS. The latest date for review and updating of this document is June 2026.

2. Objectives

2.1. DCMS and the Charity Commission share the common objectives of ensuring the effective regulation of the charity sector in England and Wales and that charity can thrive and inspire trust. To achieve this, the Charity Commission and DCMS will work together in recognition of each other’s roles and areas of expertise, providing an effective environment for the Charity Commission to achieve its statutory objectives.

3. Classification

3.1. The Charity Commission has been classified as a central government organisation by the Office for National Statistics/HM Treasury Classifications Team.

3.2. It has been administratively classified by the Cabinet Office as a non-ministerial department.

Purposes, aims and duties

4. Purposes

4.1. The Charity Commission is established under the Charities Act 2011. Its statutory objectives are set out in section 14 of that Act. They are the:

  • public confidence objective, to increase public trust and confidence in charities
  • public benefit objective, to promote awareness and understanding of the operation of the public benefit requirement
  • compliance objective, to promote compliance by charity trustees with their legal obligations in exercising control and management of the administration of their charities
  • charitable resources objective, to promote the effective use of charitable resources
  • accountability objective, to enhance the accountability of charities to donors, beneficiaries and the general public

5. Functions, duties and powers

5.1. The Charity Commission’s general functions are set out in section 15 of the Charities Act 2011. They are:

  • determining whether institutions are or are not charities
  • encouraging and facilitating the better administration of charities, which includes a power to give such advice or guidance with respect to the administration of charities as the Charity Commission considers appropriate relating to any of the matters set out in section 15(3) of the Charities Act 2011
  • identifying and investigating apparent misconduct or mismanagement in the administration of charities and taking remedial or protective action in connection with misconduct or mismanagement in the administration of charities
  • determining whether public collections certificates should be issued, and remain in force, in respect of public charitable collections[footnote 2]
  • obtaining, evaluating and disseminating information in connection with the performance of any of the Charity Commission’s functions or meeting any of its objectives, which includes (among other things) the maintenance of an accurate and up-to-date register of charities
  • giving information or advice, or making proposals, to any Minister of the Crown on matters relating to any of the Charity Commission’s functions or meeting any of its objectives, which includes (among other things) complying, so far as is reasonably practicable, with any request made by a Minister for information or advice on any matter relating to any of the Charity Commission’s functions

5.2. The Charity Commission’s general duties are set out in section 16 of the Charities Act 2011. They are:

i) So far as is reasonably practicable the Charity Commission must, in performing its functions, act in a way—

a) which is compatible with its objectives, and

b) which it considers most appropriate for the purpose of meeting those objectives.

ii) So far as is reasonably practicable the Commission must, in performing its functions, act in a way which is compatible with the encouragement of—

a) all forms of charitable giving, and

b) voluntary participation in charity work.

iii) In performing its functions the Charity Commission must have regard to the need to use its resources in the most efficient, effective and economic way.

iv) In performing its functions the Charity Commission must, so far as relevant, have regard to the principles of best regulatory practice (including the principles under which regulatory activities should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed).

v) In performing its functions the Charity Commission must, in appropriate cases, have regard to the desirability of facilitating innovation by or on behalf of charities.

vi) In managing its affairs the Charity Commission must have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it.

5.3. The Charity Commission performs a number of quasi-judicial functions where it exercises legal powers. Under section 20(1) of the Charities Act 2011, the Charity Commission is empowered to do anything which is calculated to facilitate, or is conducive or incidental to, the performance of its functions or general duties. In addition, under the Charities Act 2011 and other legislation, the Charity Commission is vested with legal powers relating to a number of areas, including:

  • the registration of charities
  • providing generic and specific guidance and giving legal consents, for example making schemes and orders on charity matters
  • taking action where there is or may be mismanagement in charities, for example powers to institute inquiries, remove or suspend trustees, appoint interim managers and protect charity property and/or other assets 5.4. As set out in Section 13(4) of the Charities Act 2011, the Charity Commission is not subject to the direction or control of any ministers or other government departments in the exercise of its functions

6. Aims

6.1. The Charity Commission has published a Statement of Strategic Intent for 2018-2023. This strategy supports the Commission’s purpose: to ensure charity can thrive and inspire trust so that people can improve lives and strengthen society.

6.2. 2023 will be the final year of the Charity Commission’s current strategy.

Governance and accountability

7. Governance and accountability

Governance

7.1. As a non-ministerial department, the Charity Commission:

  • has operational freedom in line with its statutory framework
  • is accountable to Parliament for the performance of its functions and duties

7.2. Corporate governance and accountability arrangements should draw on best practice in the public sector so far as is appropriate given non-ministerial department status.

7.3. In particular (but without limitation), the Charity Commission should:

  • comply with the principles and provisions of the Corporate Governance in Central Government Departments Code of Good Practice (“the Code”) (as amended and updated from time to time) to the extent appropriate and in line with their statutory duties or specify and explain any non-compliance in its annual report
  • comply with Managing Public Money (“MPM”)
  • in line with MPM, have regard to the relevant Functional Standards as appropriate and in particular those concerning Finance, Commercial and Counter Fraud
  • take into account the codes of good practice and guidance set out in Annex A of this framework document, as they apply to non-ministerial departments

7.4. In line with MPM Annex 3.1, the Charity Commission shall provide an account of corporate governance in its annual governance statement, including the Board’s assessment of its compliance with the Code with explanations of any material departures. To the extent that the Charity Commission does intend to materially depart from the Code, DCMS should be notified as far in advance as possible.

Accountability

7.5. The Charity Commission is accountable to Parliament, the public, the First-tier Tribunal, the Upper Tribunal and the High Court.

7.6. The Charity Commission demonstrates accountability to Parliament, through:

  • its annual report which is laid before Parliament
  • annual auditing of its accounts by the National Audit Office (“NAO”)
  • annual appearance before the Culture, Media and Sport Select Committee on matters related to the regulation of charities and its performance in this regard
  • periodic reports by the NAO on the economy, efficiency and effectiveness with which the Commission uses its resources
  • periodic examinations by the House of Commons’ Public Accounts Committee
  • consideration of complaints about its administration by the Parliamentary and Health Service Ombudsman
  • parliamentary questions – the Secretary of State for Culture, Media and Sport answers for the Charity Commission’s business in the House of Commons, and the Lords Minister for DCMS answers in the House of Lords (see 8.1 below)

7.7. It demonstrates its accountability to the public by publishing guidance, reports and key information about its activities and how it undertakes them.

7.8. It is accountable to the First-tier Tribunal, the Upper Tribunal and the High Court for the decisions it makes in exercising its legal powers; the Tribunals and the High Court have the power to quash the Charity Commission’s decisions.

Role of the department

8. The responsible Minister

8.1. The Secretary of State for Culture, Media and Sport answers for the Charity Commission’s business in parliament; and, if necessary, takes action to adjust the legislation under which the Charity Commission operates.

8.2. The Ministers’ statutory powers in respect of the Charity Commission are set out in the Charities Act 2011. These include the power to:

  • appoint and remove the Chair and Members of the Commission (Schedule 1 Charities Act 2011) - see paragraphs 8.3-8.6 below
  • make regulations regarding the payment of fees to the Charity Commission in respect of its functions (section 19 of the Charities Act 2011)
  • make amendments to Schedule 3 to the Charities Act 2011, which lists which institutions are, or are not, exempt charities (section 23 of the Charities Act 2011) and to appoint a principal regulator for exempt charities (section 25 of the Charities Act 2011)
  • amend the income thresholds required for registration with the Charity Commission (section 32 of the Charities Act 2011)
  • amend financial thresholds in the Charities Act 2011 relating to preparing accounts and audit (section 174 of the Charities Act 2011)

Appointments to the Commission

8.3. As set out in section 13 of the Charities Act 2011, the Charity Commission is a body corporate. Under Schedule 1 to the Charities Act 2011, the Charity Commission consists of a Chair and between four and eight other members of the Commission responsible for its statutory functions.

8.4. Appointments to the Commission are made under Schedule 1 to the Charities Act 2011 by the Secretary of State for Culture, Media and Sport. The appointments are subject to the Public Appointments Order in Council and as such must comply with the Governance Code on Public Appointments.

8.5. Paragraph 1 of Schedule 1 to the Charities Act 2011 states that the Secretary of State for Culture, Media and Sport must appoint the Chair and the members so as to secure that:

  • collectively, the members of the Commission have knowledge and experience of:

    a) the law relating to charities

    b) charity accounts and the financing of charities

    c) the operation and regulation of charities of different sizes and descriptions

  • at least two members have a 7-year general qualification within the meaning of section 71 of the Courts and Legal Services Act 1990
  • at least one member knows about conditions in Wales, and be appointed following consultation with the Welsh Ministers

8.6. In addition, all such appointments should have regard to the principle that appointments should reflect the diversity of the society in which we live, and appointments should be made taking account of the need to appoint boards which include a balance of skills and backgrounds.

Other Ministerial powers and responsibilities

8.7. The Minister is also responsible for government policy relating to charities in England and Wales, within which the Charity Commission operates.

9. The Accounting Officer

9.1. The Accounting Officer (“AO”) is the Chief Executive of the Charity Commission. Under paragraph 5(1) of Schedule 1 to the Charities Act 2011, the Chief Executive is appointed by the Commission.

AO’s specific accountabilities and responsibilities

9.2. The Principal Accounting Officer (“PAO”) of HM Treasury designates the Chief Executive as the Charity Commission’s AO and ensures that they are fully aware of their responsibilities. The PAO issues a letter appointing the AO, setting out their responsibilities.

9.3. The responsibilities of the AO are set out in Chapter 3 of MPM.

10. The role of the sponsorship team

10.1. The Civil Society and Youth directorate in DCMS is the primary contact for the Charity Commission. The responsible senior civil servant for this relationship is the Director of the Civil Society and Youth directorate. They are the main source of advice to the responsible Minister on the discharge of their responsibilities in respect of the Charity Commission.

10.2. At a working level, the sponsor relationship between DCMS and the Charity Commission is led and managed by officials. In DCMS, this is the Charity Law and Regulation Policy in the Civil Society & Youth (“CSY”) directorate. In the Charity Commission, it is the Strategic Policy team.

11. Resolution of disputes between the Charity Commission and sponsor department

11.1. Any disputes between DCMS and the Charity Commission, that do not relate to the discharge of the Commission’s functions, will be resolved in as timely a manner as possible. The department and the Charity Commission will seek to resolve any disputes through an informal process in the first instance. If this is not possible, then a formal process, overseen by the senior sponsor, will be used to resolve the issue. Failing this, the senior sponsor will ask the relevant policy Director General to oversee the dispute. They may then choose to ask the Permanent Secretary to nominate a non-executive member of the department’s Board to review the dispute, mediate with both sides and reach an outcome, in consultation with the Secretary of State.

11.2. The process set out under 11.1 above would not apply in any dispute relating to the exercise of the Charity Commission’s functions, in which the Charity Commission is not subject to direction or control of any Minister of the Crown or any other government department (as set out in s13 (4) Charities Act 2011).

12. Freedom of Information Requests

12.1. Where a request for information is received by either party under the Freedom of Information Act 2000, or the Data Protection Act 1998 or 2018, the party receiving the request will consult with the other party prior to any disclosure of information that may affect the other party’s responsibilities.

13.1. The Charity Commission and DCMS acknowledge the importance of ensuring that legal risks are communicated appropriately and in a timely manner. The Charity Commission will keep DCMS informed of any upcoming litigation that might impact DCMS or that poses a significant risk (including reputational) to the Charity Commission.

13.2. If the Charity Commission is involved in any litigation, or aware of the existence of any threatened or reasonably anticipated litigation, which could represent a substantial accounting risk for the Charity Commission or HM Government (meaning litigation that is potentially unaffordable within the Charity Commission’s agreed budget), the Charity Commission shall inform DCMS as soon as reasonably possible and subsequently provide DCMS with quarterly written updates on the progress of this litigation.

13.3. In respect of each piece of litigation involving the Charity Commission as set out under 13.2 above, the parties will agree a litigation protocol which will include specific provisions to ensure appropriate and timely reporting on the status of the litigation and the protection of legally privileged information transmitted to DCMS to facilitate this. Until such time as a protocol is agreed, the parties will ensure that:

  • material developments in the litigation are communicated to DCMS in an appropriate and timely manner
  • legally privileged documents and information are clearly marked as such
  • individual employees handling the legally privileged documents are familiar with principles to which they must adhere to protect legal privilege
  • circulation of privileged information within government occurs only as necessary

The Charity Commission governance structure

14. The Chief Executive

Responsibilities of the Charity Commission’s Chief Executive as accounting officer

14.1. The Chief Executive as AO is personally responsible for:

  • safeguarding the public funds for which they have charge
  • ensuring propriety, regularity, value for money and feasibility in the handling of those public funds
  • the day-to-day operations and management of the Charity Commission
  • ensuring the Charity Commission as a whole is run on the basis of the standards, in terms of governance, decision-making and financial management, that are set out in Box 3.1 of MPM

14.2. These responsibilities are set in the AO appointment letter issued by the PAO of HM Treasury.

Responsibilities for accounting to Parliament and the public

14.3. Responsibilities of the AO to Parliament and the public include:

  • signing the accounts and ensuring that proper records are kept relating to the accounts and that the accounts are properly prepared and presented
  • preparing and signing a Governance Statement covering corporate governance, risk management and oversight of any local responsibilities, for inclusion in the annual report and accounts
  • ensuring that effective procedures for handling complaints about the Charity Commission in accordance with Parliamentary and Health Service Ombudsman’s Principles of Good Complaint Handling are established and made widely known within the Charity Commission and published on gov.uk
  • acting in accordance with the terms of MPM and other instructions and guidance issued from time to time by DCMS, HM Treasury and the Cabinet Office
  • ensuring that as part of the above compliance they are familiar with and act in accordance with:
    • any governing legislation
    • this framework document
    • any elements of any settlement letter issued to DCMS that is relevant to the operation of the Charity Commission

Responsibilities to the Board

14.4. The Chief Executive is responsible to the Board for:

  • advising them on the discharge of their responsibilities as set out in this document, in the founding legislation and in any other relevant instructions and guidance that may be issued from time to time
  • advising them on the Charity Commission’s performance compared with its aims and objectives, and in line with targets and performance indicators agreed by the Board
  • ensuring that financial considerations are taken fully into account by the Board at all stages in reaching and executing its decisions
  • the conduct of the organisation
  • developing plans, programmes and policies for Board approval
  • acquiring the resources and putting in place the organisational structures and business processes the Commission requires to achieve its objectives
  • ensuring that the organisation acts within the levels of authority delegated by the Board
  • ensuring that robust management succession and development plans are in place and presented periodically to the Board
  • keeping the Chair and Board promptly informed on all matters that may be of importance to them, and supporting the Board in fulfilling its responsibilities through the provision of accurate and timely information
  • jointly with the Chair, promoting effective relationships and communications between Board members and other members of staff

14.5. The Chief Executive is also responsible for:

  • supporting the Chair in developing the Charity Commission’s relationships with DCMS, wider Government, sector bodies and other key stakeholders
  • establishing a relationship of trust with the Chair, reporting key developments to them in a timely manner and seeking advice and support as appropriate

Managing conflicts

14.6. The Chief Executive should follow the advice and direction of the Board, except in very exceptional circumstances with a clear cut and transparent rationale for not doing so.

14.7. The Charity Commission AO must take care that their personal AO responsibilities do not conflict with their duties as a Board member. In particular, the AO should vote against any proposal which appears to cause such a conflict; it is not sufficient to abstain.

14.8. If the Chair or Board of the Charity Commission is minded to instruct its AO to carry out a course inconsistent with their duties as AO, then the AO should make their reservations clear, preferably in writing. The Charity Commission is not subject to ministerial direction or control, other than via legislation and administrative controls over expenditure set by HM Treasury, under sections 13(4) and 13(5) of the Charities Act 2011 so if the Board is still minded to proceed, the Charity Commission AO should then:

  • seek the Board’s written direction to carry it out, and inform HM Treasury and the responsible Minister
  • proceed to implement without delay
  • follow the routine in paragraph 3.6.6 of MPM

15. The Commission

Responsibilities of the Commission

15.1. The main matters the Commission has reserved to itself are:

  • ensuring that the Commission fulfils its statutory objectives, general functions and duties and appropriately exercises the legal powers vested in it, under the Charities Act 2011 and other legislation
  • regulatory decisions, and decisions on policy guidance where these are considered to be high risk, high profile, or precedent setting
  • appointing the Chief Executive[footnote 3]
  • setting performance objectives and remuneration terms linked to these objectives for the Chief Executive, giving due weight to the proper management and use and utilisation of public resources
  • establishing and agreeing the procedure of the Committee called the Board
  • approving the scheme of delegation (which sets out the division of responsibilities between the Commission, the Board and the Executive)

16. The Board

Composition of the Board

16.1. The Commission has created a committee called the Board, in line with good standards of corporate governance and guidance as set out in Annex A.

16.2. The Board will consist of the Chair, the members of the Commission, and the Chief Executive.

16.3. Remuneration of the Board will be disclosed in line with the guidance in the Government Financial Reporting manual (“FReM”)

Board Committees

16.4. The Board may set up such sub-committees as necessary for it to fulfil its functions. These sub-committees are referred to as committees for convenience. As is detailed below, at a minimum this should include an Audit and Risk Assurance Committee chaired by an appropriately qualified member of the Commission.

16.5. While the Board may make use of committees to assist its consideration of appointments, succession, audit, risk and remuneration, it retains responsibility for, and endorses, final decisions in all of these areas. The Chair should ensure that sufficient time is allowed at the Board for committees to report on the nature and content of discussion, on recommendations, and on actions to be taken.

16.6. The Chair should ensure:

  • Board committees are properly structured with appropriate terms of reference - the terms of each committee should set out its responsibilities and the authority delegated to it by the Board
  • that committee membership is periodically refreshed and that individual members of the Commission are not overburdened, when deciding the chairs and membership of committees

Responsibilities of the Board

16.7. The Charity Commission has authorised the Board to exercise the following functions:

  • overseeing the performance of statutory functions, including decision-making in regard to the most high-risk cases, except those reserved to the Commission
  • establishing and taking forward the vision, strategy and values of the Charity Commission, consistent with its overall strategic direction and within its policy and resources framework
  • providing effective leadership of the Charity Commission within a framework of prudent and effective controls which enables risk to be assessed and managed
  • approving the annual business plan
  • reviewing management performance, including financial performance and key performance measurements; ensuring that the Board receives and reviews regular financial and management information concerning the management of the Charity Commission
  • ensuring that it is kept informed of any changes which are likely to impact on the strategic direction of the Board or on the attainability of its targets, determining the steps needed to deal with such changes and where appropriate bringing such matters to the attention of the responsible Minister via the executive team, sponsorship team or directly
  • ensuring that any statutory or administrative requirements for the use of public funds are complied with; that the Board operates within the limits of its statutory authority and any delegated authority agreed with HM Treasury, and in accordance with any other conditions relating to the use of public funds
  • ensuring that as part of the above compliance they are familiar with:
    • this framework document
    • any delegation letter issued to the body as set out in paragraph 20.1
    • any elements of any settlement letter issued to DCMS that is relevant to the operation of the Charity Commission
  • ensuring that they have appropriate internal mechanisms for the monitoring, governance and external reporting regarding any conditions arising from the above documents and ensuring that the Chief Executive and the Charity Commission as a whole act in accordance with their obligations under the above documents
  • demonstrating high standards of corporate governance at all times, including by using the independent audit committee to help the Board to address key financial and other risks
  • determining all such other things which the Board considers ancillary or conducive to the attainment or fulfilment by the Charity Commission of its objectives

16.8. The Commission recognises that where the Chief Executive has taken or been substantially involved in decisions on matters of regulatory compliance within the Executive and which come to the Board for decision, it will be appropriate that such decisions are taken by the Commission alone.

Risk

16.9. The Board should:

  • ensure that effective arrangements are in place to provide assurance on risk management, governance and internal control
  • make a strategic choice about the style, shape and quality of risk management and should lead the assessment and management of opportunity and risk
  • ensure that effective arrangements are in place to provide assurance over the design and operation of risk management, governance and internal control in line with the Management of Risk – Principles and Concepts (“The Orange Book”)

16.10. The Board must set up an Audit and Risk Assurance Committee chaired by an appropriately qualified member of the Commission. The Board is expected to assure itself of the adequacy and effectiveness of the risk management framework and the operation of internal control.

16.11. The Chief Executive is responsible for developing and maintaining an effective framework of internal controls, including risk management in relation to all the Charity Commission’s activities.

17. The Chair’s role and responsibilities

17.1. The Chair is responsible for leading the Board in the delivery of its responsibilities. Such responsibility should be exercised in the light of their duties and responsibilities as set out in their appointment letter, terms and conditions of appointment, the statutory authority governing the Charity Commission, this document and the documents and guidance referred to within this document.

17.2. Communications between the Charity Commission’s Board and the responsible Minister should normally be through the Chair.

17.3. The Chair is bound by the Code of Conduct for Board Members of Public Bodies, which covers conduct in the role and includes the Nolan Principles of Public Life.

17.4. In addition, the Chair is responsible for:

  • ensuring, including by monitoring and engaging with appropriate governance arrangements, that the Charity Commission’s affairs are conducted with probity
  • communicating and, where appropriate, collaborating with the responsible Minister on shared strategic interests and priorities, while ensuring that the Charity Commission’s operational independence is maintained in accordance with section 13(4) of the Charities Act 2011

17.5. The Chair has the following leadership responsibilities:

  • ensuring that the Charity Commission fulfils its statutory objectives, general functions and duties and appropriately exercises its legal powers
  • leading the development of the organisation’s strategy
  • setting the Board’s agenda
  • setting the tone of Board discussions to promote constructive debate and effective decision making
  • ensuring that Board members operate in accordance with governance best practice and the Nolan principles of standards in public life
  • promoting the efficient and effective use of staff and other resources
  • delivering high standards of regularity and propriety
  • representing the views of the Board to the general public
  • developing the organisation’s key relationships with DCMS, wider government, sector bodies and other major stakeholders
  • supporting and performance managing the Chief Executive, including agreeing objectives and undertaking an annual appraisal, following consultation with other members of the Charity Commission
  • establishing a good relationship with the Chief Executive, providing advice and support while respecting their responsibilities, including the responsibilities of the Chief Executive as AO
  • jointly with the Chief Executive, promoting effective relationships and communications between Board members and other members of staff

17.6. The Chair also has an obligation to ensure that:

  • the work of the Board and its members are reviewed and are working effectively, including ongoing assessment of the performance of individual members of the Commission with a formal annual appraisal, as well as an externally facilitated review every three years consistent with Board Effectiveness Reviews: Principles and Resources for Arm’s Length Bodies and Sponsoring Departments
  • that the Board has a balance of skills appropriate to directing the Charity Commission’s business, and that all Board members including the Chair and Chief Executive continually update their skills, knowledge and familiarity with the Charity Commission to fulfil their role both on the Board and committees. This will include but not be limited to skills and training in relation to financial management and reporting requirements, risk management and the requirements of Board membership within the public sector
  • members of the Commission are fully briefed on terms of appointment, duties, rights and responsibilities
  • they, together with the other members of the Commission, receive appropriate training on financial management and reporting requirements and on any differences that may exist between private and public sector practice
  • the responsible Minister is advised of the Charity Commission’s needs when vacancies for members of the Commission arise
  • there is a Governance Framework in place setting out the role and responsibilities of the Board consistent with the Government Code of Good Practice for Corporate Governance
  • there is a code of practice for Board members in place, consistent with the Cabinet Office Code of Conduct for Board Members of Public Bodies

17.7. The Chair’s performance will be appraised annually by DCMS in line with Cabinet Office guidance, Chair Appraisals: Principles and Resources for Arm’s-Length Bodies and Sponsoring Departments. During the appraisal process, the Charity Commission’s Board members will be asked to provide feedback on the performance of the Chair to the Chair of the Commission’s Remuneration and Appointments Committee, who will collate that feedback before sharing with DCMS.

18. Individual board members’ responsibilities

18.1. Individual Board members should:

  • comply at all times with the Code of Conduct for Board Members of Public Bodies, which covers conduct in the role and includes the Nolan Principles of Public Life as well as rules relating to the use of public funds and to conflicts of interest
  • demonstrate adherence to the 12 Principles of Governance for all Public Body Non-Executive Directors as appropriate
  • not misuse information gained in the course of their public service for personal gain or for political profit, nor seek to use the opportunity of public service to promote their private interests or those of connected persons or organisations
  • comply with the Board’s rules on the acceptance of gifts and hospitality, and of business appointments
  • act in good faith and in the best interests of the Charity Commission
  • give proper time and attention to their duties and development
  • use their specialist skills, knowledge and experience to inform collective decisions
  • uphold and promote corporate decisions
  • participate in an annual appraisal of their own performance with the Chair
  • ensure they are familiar with any applicable guidance on the role of public sector non-executive directors and boards that may be issued from time to time by the Cabinet Office, HM Treasury or wider government

19. Charity Commission Governance Framework

19.1. Further information about governance at the Commission, including roles and responsibilities, conduct of Board members and delegated authorities, can be found in the Charity Commission Governance Framework.

Management and financial responsibilities and controls

20. Delegated authorities

20.1. The Charity Commission’s delegated authorities are set out in the delegation letter sent by HM Treasury. This delegation letter may be updated and superseded by later versions which may be issued by HM Treasury.

20.2. In line with MPM Annex 2.2 these delegations will be reviewed on an annual basis.

20.3. The Charity Commission shall seek HM Treasury’s prior written approval before:

  • entering into any undertaking to incur any expenditure that falls outside the delegations or which is not provided for in the non-ministerial department’s annual budget
  • incurring expenditure for any purpose that is or might be considered novel or contentious, or which has or could have significant future cost implications
  • making any significant change in the scale of operation or funding of any initiative or particular scheme previously approved by HM Treasury
  • making any change of policy or practice which has wider financial implications that might prove repercussive or which might significantly affect the future level of resources required
  • carrying out policies that go against the principles, rules, guidance and advice in MPM

21. Banking and managing cash

21.1. The Charity Commission must maximise the use of publicly procured banking services (accounts with central government commercial banks managed centrally by Government Banking).

21.2. The Charity Commission should only hold money outside Government Banking Service accounts where a good business case can be made for doing so and HM Treasury consent is required for each account to be established. Only commercial banks which are members of relevant UK clearing bodies may be considered for this purpose.

21.3. Commercial accounts where approved should be operated in line with the principles as set out in MPM.

21.4. The AO is responsible for ensuring the Charity Commission has a banking policy as set out in MPM and ensuring that policy is complied with.

22. Procurement

22.1. The Charity Commission shall ensure that its procurement policies are aligned with and comply with any relevant UK or other international procurement rules and in particular the Public Contracts Regulations 2015.

22.2. The Charity Commission shall establish its procurement policies and procedures and document these in a Procurement Policy and Finance Manual.

22.3. In procurement cases where the Charity Commission is likely to exceed its delegated authority limit, approval for the specific planned purchase must be sought from HM Treasury.

22.4. Goods, services, and works should be acquired by competition. Proposals to let single-tender or restricted contracts shall be limited and exceptional, and a quarterly report explaining those exceptions should be sent to HM Treasury.

22.5. Procurement by the Charity Commission of works, equipment, goods, and services shall be based on a full option appraisal and value for money (“VfM”), i.e. the optimum combination and whole life costs and quality (fitness for purpose).

22.6. The Charity Commission shall:

  • engage fully with government wide procurement initiatives that seek to achieve VfM from collaborative projects
  • comply with all relevant Procurement Policy Notes issued by Cabinet Office
  • co-operate fully with initiatives to improve the availability of procurement data to facilitate the achievement of VfM

22.7. The Charity Commission shall comply with the commercial and grants standards. These standards apply to the planning, delivery, and management of government commercial activity, including management of grants in all departments and non-ministerial departments, regardless of commercial approach used and form part of a suite of functional standards that set expectations for management within government.

23. Risk management

23.1. The Charity Commission shall ensure that the risks that it faces are dealt with in an appropriate manner, in accordance with relevant aspects of best practice in corporate governance, and develop a risk management strategy, in accordance with the Treasury guidance Management of Risk: Principles and Concepts.

24. Counter fraud and theft

24.1. The Charity Commission should adopt and implement policies and practices to safeguard itself against fraud and theft.

24.2. The Charity Commission should act in line with guidance as issued by the Counter Fraud Function and in compliance with the procedures and considerations as set in MPM Annex 4.9 and the Counter Fraud Functional Standard. It should also take all reasonable steps to appraise the financial standing of any firm or other body with which it intends to enter a contract or to provide grant or grant-in-aid.

24.3. The Charity Commission should report detected loss from fraud, bribery, corruption and error, alongside associated recoveries and prevented losses, to the counter fraud centre of expertise in line with the agreed government definitions as set out in Counter Fraud Functional Standard.

25. Staff

Broad responsibilities for staff

25.1. Within the arrangements approved by the Treasury, the Charity Commission will have responsibility for the recruitment, retention and motivation of its staff. The broad responsibilities toward its staff are to ensure that:

  • the rules for recruitment and management of staff create an inclusive culture in which diversity is fully valued; appointment and advancement is based on merit; there is no discrimination against employees with protected characteristics under the Equality Act 2010
  • the level and structure of its staffing, including grading and staff numbers, are appropriate to its functions and the requirements of economy, efficiency and effectiveness *the performance of its staff at all levels is satisfactorily appraised and the Charity Commission performance measurement systems are reviewed from time to time
  • its staff are encouraged to acquire the appropriate professional, management and other expertise necessary to achieve the Charity Commission’s objectives
  • proper consultation with staff takes place on key issues affecting them
  • adequate grievance and disciplinary procedures are in place
  • whistle-blowing procedures consistent with the Public Interest Disclosure Act 1998 are in place
  • a code of conduct for staff is in place based on the Cabinet Office’s Model Code for Staff of Executive Non-departmental Public Bodies

Staff costs

25.2. Subject to its delegated authorities, the Charity Commission shall ensure that the creation of any additional posts does not incur forward commitments that will exceed its ability to pay for them.

Pay and conditions of service

25.3. The Charity Commission’s staff are subject to levels of remuneration and terms and conditions of service (including pensions) within the general pay structure approved by the Treasury. The Charity Commission has no delegated power to amend these terms and conditions. The Charity Commission’s pay remit is approved annually by DCMS.

25.4. If Civil Service terms and conditions of service apply to the rates of pay and non-pay allowances paid to the staff and to any other party entitled to payment in respect of travel expenses or other allowances, payment shall be made in accordance with the Civil Service Management Code and the annual Civil Service Pay Remit Guidance, except where prior approval has been given by the department to vary such rates.

25.5. Staff terms and conditions should be set out in an Employee Handbook, which should be provided to DCMS together with subsequent amendments.

25.6. The Charity Commission shall abide by public sector pay controls, including the relevant approvals process as detailed in the Senior Pay Guidance and the Public Sector Pay and Terms Guidance.

25.7. The Charity Commission shall operate a performance-related pay scheme that shall form part of the annual aggregate pay budget approved by HM Treasury, where relevant, with due regard to the Senior Pay Guidance.

25.8. The travel expenses of Board members shall be tied to the rates allowed to senior staff of the Charity Commission. Reasonable actual costs shall be reimbursed.

Pensions, redundancy and compensation

25.9. Compensation scheme rules and pension scheme rules should reflect legislative and HM Treasury guidance requirements regarding exit payments.

25.10. The Charity Commission staff shall normally be eligible for a pension provided by PCSPS. Staff may opt out of the occupational pension scheme provided by the Charity Commission, but that employers’ contribution to any personal pension arrangement, including stakeholder pension, shall normally be limited to the national insurance rebate level.

25.11. Any proposal by the Charity Commission to move from the existing pension arrangements, or to pay any redundancy or compensation for loss of office, requires the prior approval of HM Treasury. Proposals on severance must comply with the rules in chapter 4 of MPM.

Financial reporting and audit

26. Annual report and accounts

26.1. The Charity Commission’s Board must publish an Annual Report of its activities together with its audited accounts after the end of each financial year. The accounts should be prepared in accordance with the relevant statutes and specific accounts direction issued by HM Treasury as well as the Treasury’s Financial Reporting Manual (“FReM”).

26.2. As set out in Schedule 1 section 11.1 of the Charities Act 2011, as soon as practicable after the end of each financial year the Commission must publish a report on:

  • the discharge of its functions
  • the extent to which, in its opinion, its objectives (see 4.1) have been met
  • the performance of its general duties (see 5.2)
  • the management of its affairs during that year

and additionally:

  • cover any corporate, subsidiary or joint ventures under its control
  • comply with the FReM
  • outline main activities and performance during the previous financial year and set out in summary form forward plans

26.3. Information on performance against key financial targets is included within the annual report and subject to the auditor’s consistency opinion. The report and accounts shall be laid in Parliament and made available on the Charity Commission’s website, in accordance with the guidance in the FReM.

27. Internal audit

27.1. The Charity Commission shall:

  • establish and maintain arrangements for internal audit
  • ensure that any arrangements for internal audit are in accordance with the Public Sector Internal Audit Standards (PSIAS) as adopted by HM Treasury
  • set up an audit committee of its Board in accordance with the Code of Good Practice for Corporate Governance and the Audit and Risk Assurance Committee Handbook

28. External audit

28.1. The Comptroller & Auditor General (C&AG) audits the Charity Commission’s annual accounts and lays them before Parliament, together with their report.

28.2. In the event that the Charity Commission has set up and controls subsidiary companies, the Charity Commission will (in the light of the provisions in the Companies Act 2006) ensure that the C&AG has the option to be appointed auditor of those company subsidiaries that it controls and/or whose accounts are consolidated within its own accounts.

28.3. The C&AG:

  • will consult the Charity Commission on whom – the NAO or a commercial auditor – shall undertake the audit(s) on his behalf, though the final decision rests with the C&AG
  • has a statutory right of access to relevant documents, including by virtue of section 25(8) of the Government Resources and Accounts Act 2000, held by another party in receipt of payments or grants from the Charity Commission
  • will consider requests from departments and other relevant bodies to provide regulatory compliance reports and other similar reports at the commencement of the audit. Consistent with the C&AG’s independent status, the provision of such reports is entirely at the C&AG’s discretion

28.4. The C&AG may carry out examinations into the economy, efficiency and effectiveness with which the Charity Commission has used its resources in discharging its functions. For the purpose of these examinations, the C&AG has statutory access to documents as provided for under section 8 of the National Audit Act 1983. In addition, the Charity Commission shall provide, in conditions to grants and contracts, for the C&AG to exercise such access to documents held by grant recipients and contractors and subcontractors as may be required for these examinations; and shall use its best endeavours to secure access for the C&AG to any other documents required by the C&AG which are held by other bodies.

Signatures

Signed: Emma Squire and Nicola Hewer, Interim Directors General for Culture, Sport and Civil Society

Date: 2 June 2023

On behalf of the Department for Culture, Media and Sport

Signed: Helen Stephenson, Chief Executive Officer

Date: 7 June 2023

On behalf of the Charity Commission

 

Annex A: Guidance

The Charity Commission shall comply with the following guidance, documents and instructions:

Corporate governance

Financial management and reporting

Management of risk

Commercial management

Public appointments

The following are relevant where public bodies participate in public appointments processes.

Staff and remuneration

General

  1. Under section 21 of and Schedule 2 to the Charities Act 2011, 21 (1-5), there continues to be an office known as the official custodian for charities (referred to as “the official custodian”). The official custodian is a corporation sole whose official seal is to be officially and judicially noticed. The official custodian is appointed by the Charity Commission Chief Executive. ↩

  2. This function has never been enacted. ↩

  3. As set out in schedule 1 of the Charities Act 2011 ↩

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