The new power was included in the Charities (Protection and Social Investment) Act 2016 and is expected to come into effect in October.

In its consultation paper, the commission sets out its proposed approach and the factors it will take into account before issuing an official warning, together with its approach to giving notice, considering representations and publishing official warnings.

According to the guidelines, the commission proposes to issue warnings in cases where it discovers unauthorised benefits to trustees where the amounts involved are small and other sanctions may not be proportionate, or in situations where poor decision making results in  financial loss to the charity which is too small for stronger sanctions to be proportionate.

It also plans to give warnings to charities for repeated or persistent failure to comply with statutory accounting and reporting requirements, including non-submission and late submission of documents, and for repeated breaches of a charity’s governing document that cause governance problems.

As part of the consultation, the commission is considering whether charities that repeatedly or persistently default on statutory accounting and reporting requirements should automatically be issued with official warning.

Sarah Atkinson, director of policy and communications at the commission, said: ‘The power to issue an official warning is an important new power for the commission to tackle misconduct and mismanagement proportionately and effectively.

‘We are keen to ensure that the sector understands our approach and the important safeguards for charities. We hope that charities, professional advisers and other interested parties will respond to our consultation to further inform that approach.’

The consultation closes on 23 September.

The consultation on official warnings to charities and trustees is here.
Draft guidance is here.