charity law and governance - icsa€¦ · level 4 certificate in charity law and governance charity...

© The Chartered Governance Institute 2019 of 18

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Level 4 Certificate in Charity Law and Governance

Charity Law and Governance November 2019 Tuesday afternoon, 26 November 2019 Time allowed: 3 hours (plus 15 minutes reading time) Do not open this examination paper until the presiding officer or an invigilator tells you to. You must not take this paper out of the examination room. The examination paper contains 19 questions and is divided into three sections. You must attempt all the questions in this paper. Section A contains 20 marks, Section B contains 35 marks and Section C contains 45 marks. There are 100 marks available in total for the paper. You may continue your answers on the continuation sheets at the back of the booklet if necessary. Note: Unless otherwise specified, you should assume that an Act or an organisation referred to in the questions is a UK Act or organisation.


Section A Answer all the questions in this section. Continue your answers on the continuation sheets at the back of the booklet, if necessary. 1. Name the regulator of all charitable registered societies.

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(1 mark) 2. In a charitable company, a proxy can be:

(Tick one box only) A Any person. B Any member. C As defined in the Articles. D Any trustee/director.

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3. Describe how trustees’ potential personal liability can be minimised.

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(2 marks)

4. Give the two principal ways to challenge a decision of the Charity Commission.

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5. A chartered body’s Charter can only be altered with the consent of the Privy Council. Is this true or false? (Tick one box only)

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6. The list of descriptions of charitable purposes is currently set out in which statute?

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(1 mark)

7. There are seven key principles in the Charity Governance Code. List any three of these principles.

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8. It is a legal rule that a trustee should not benefit from their charity, unless authorised. Outline the basis for this rule.

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9. Describe the ‘veil of incorporation’ principle.

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(3 marks) 10. Describe the Charity Commission’s approach to its role regarding charity fundraising.

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(4 marks)

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TOTAL FOR SECTION A = 20 MARKS


Section B Answer all the questions in this section. Continue your answers on the continuation sheets at the back of the booklet, if necessary. 11. Explain what is meant by the term ‘functional permanent endowment’ land.

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(5 marks)

12. Describe the advantages and disadvantages of a new charity being set up as an unincorporated

members’ association.

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(6 marks)


13. Explain when the trustees in a charitable company can take a decision by written resolution and what is required.

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(6 marks)

14. Describe why a charity needs a constitution. Give examples of what a constitution typically

includes.

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15. Explain the legal definition and key elements of a contract.

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(6 marks)

16. Explain the background to the Nolan Principles and why these principles are sometimes used within the charity sector.

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(6 marks)

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TOTAL FOR SECTION B = 35 MARKS


Section C Answer all the questions in this section. Continue your answers on the continuation sheets at the back of the booklet, if necessary. 17. You are Secretary to Historic Yorkshire Clocks Preservation Trust (the Trust). Its charitable

purposes are ‘to advance the education of the public in relation to historic clocks in the county of Yorkshire’. The Trust does this by making grants for the maintenance and repair of historic clocks situated in the county. In the past five years, all clock projects funded have related to clocks 50 years old or more.

ABC Buses Ltd has approached the Trust for a discussion about potential funding for the repair of the clock inside its garage in the county of Lancashire. The clock was made and installed in this location in 2000. The garage is the place where its buses are securely parked overnight. Provide a briefing note to the Chair of the Trust advising on the legal issues involved in this scenario.

(15 marks)

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18. You have just been appointed as the Secretary of Compute, a charity that has recently experienced a very high profile fraud. The matter has been reported to the Charity Commission as a serious incident and the Charity Commission is currently considering whether to take the issue forward as a statutory inquiry. However, the Board of Compute wants to take immediate action to address the issues raised.

The charity previously had an Honorary Treasurer who was trusted by the Board to manage the

finances of the charity. The Treasurer has recently been arrested, and found guilty of the theft of £200,000 from the charity. The Treasurer managed the bank accounts and was the sole signatory for these accounts. The only financial report that the Board had considered each year was the signing of the annual accounts. It had never really discussed financial matters. The Treasurer was the only Board member with any finance experience, and the other trustees lack confidence in these matters.

There are no formal delegations within Compute as the Board had previously felt that these would

undermine the trust that they placed in individual trustees and staff. Since the Treasurer was arrested, a Finance Manager has been employed, along with a new CEO and you as Secretary.

There are currently seven trustees and the Board has a maximum size of 10. Prepare a report to the Board, on the basis of the above information, that sets out the immediate

actions that you would recommend.

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19. A close friend is setting up a registered charity and is considering whether it should be a Charitable Incorporated Organisation (CIO) or a charitable company. They have already considered a range of factors in regard to which legal form would be the best option and either form would be suitable. They have asked for some information on the ongoing regulatory requirements (and just these, as they fully understand the two different legal forms).

Discuss the similarities and differences between the ongoing regulatory requirements, once the charity is established, for both types of charity.

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TOTAL FOR SECTION C = 45 MARKS

TOTAL FOR PAPER = 100 MARKS

END

The scenarios included here are entirely fictional. Any resemblance of the information in the scenarios to real persons or organisations, actual or perceived, is purely coincidental.

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Do not write on this page – examiner use only

Section A

Section B Section C

Question Marks Review Question Marks Review Question Marks Review

1 11 17 2 12 18

3 13 19

4 14 Total

5 15

6 16

7 Total

8

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Total

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Examiner review:

Total marks for paper:

charity law and governance - icsa€¦ · level 4 certificate in charity law and governance charity...

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