As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
Charities operate in an environment of trust and this trust can easily be exploited at the expense of charity assets if trustees do not ensure that they take adequate fraud prevention measures.
What is fraud?
At its simplest, fraud is wrongful or criminal deception intended to result in financial or personal gain.
There are many different types of fraud, including:
- Tax fraud;
- Fraud by false representation;
- Fraud by abuse of position.
According to a recent report by the Centre for Counter Fraud Studies and BDO, fraud is costing the UK charity sector £1.65 billion a year. Unfortunately, fraud in the charity sector is never far from the headlines and can have a devastating effect on both the charity’s financial situation and its reputation.
Fraud in the charity sector
Charities should be aware that online fraud, in particular, is becoming more prevalent as fraudsters make use of new technologies and find ways to access charities’ valuable information. Charities should ensure that all information is adequately secured and password protected. All electronic devices should be protected with up to date anti-virus software and if the charity sells products or services from its website, all payments should be secure.
Fraud committed by staff accounts for approximately half of all frauds against organisations in any sector and charities are a prime target. When recruiting new members of staff, trustees and managers should take care to ensure that ID is verified, background checks are conducted and references requested. Look out for any unusual behaviour by staff members, which may be indicative of fraudulent activity.
Other examples include fundraising fraud, misuse of legacies, bribery, grants fraud and impersonation of charity workers, all of which trustees and managers should be aware of and have procedures in place to prevent.
Prevention is key
Prevention is far easier than responding to fraud after the event. Having robust policies and procedures in place to guard against fraud, including putting in place organisational controls, internal audit procedures, authorisations and checks, supervision, accounting checks and considering segregation of duties, can help to reduce the risk of fraud to your charity.
The Charity Commission has published comprehensive guidance on this issue, which provides useful advice on how charities prevent, detect and respond to fraud. It is important to remember that trustees have a legal duty to protect charity assets so they must take active steps to prevent against fraud – and, where possible, to take steps to recover funds lost to fraud.
In the event that your charity does suffer an actual or suspected incident of fraud, this should be reported to the police in the first instance and a Serious Incident Report should be made to the Charity Commission as soon as possible.
We will be holding a training session on 14th October in our offices, which will deal with fraud in more detail.
For more information
If you are interested in signing up to the training session in October, please contact a member of the Charities Team on 0121 212 7450 or firstname.lastname@example.org.
This article was co-authored by Will Allen, a Trainee Solicitor in the Governance and Commercial Team.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
The Court has confirmed that a party cannot withhold its consent in order to re-write the original bargain.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.