A 2017 study by led by the University of Portsmouth’s Centre for Counter Fraud Studies places charity fraud at around £2.3 billion; the value of loss has increased by £400m in a year and from £1.1 billion in 2011.  Charities are operated by fundamentally nice people, who believe others within and supporting charities share their values and desire to deliver upon the objectives of the charities; the goodwill factor.  Understandably, charities are often blindsided by the goodwill factor when it comes to taking anti-fraud precautions, feeling that it undermines their values by appearing not to trust those who work with them.  Similarly, charities can be averse to investigation for the same reasons as well as embarassment and reputational damage.

Charities are understandably to reticent to spend valuable funds unless unnecessarily.  Charity trustees are obliged to protect their charities' assets and manage the affairs of the charity as if managing the affairs of another.  A smaller investment pre- incident can yield great benefit in terms of:

  • avoiding loss - losses are not only the amount lost to frausters, but will include staff time and accountancy, legal, investigatory and, if having to replace a staff member, any recruitment fees;
  • ensuring that the reasonable expectations of regulatory bodies of trustees are met,
  • meet grant-makers and funders expectations over reasonable financial management and asset protection, and
  • avoid the stress, embarassment and potential reputational damage of an incident.

We deliver services both pre- and post- incident:

Pre incident work examples

  • Training - often this can help spot the more obvious attempts at fraud, e.g. email payment fraud;
  • CC8 review - produced by the Charity Commission, this is checklist (the CC8) covers the basic controls charities are expected to have in place.  We have undertaken CC8 reviews and validated CC8 reviews undertaken by staff and trustees;
  • Internal controls reviews - often simple modifications to financial procedures can improve their effectiveness significantly;
  • Anti-bribery risk assessment - there is one defence for trustees in the Bribery Act - to be able to rely on it the organisation must have undertaken a bribery risk assessment;
  • Purchasing reviews - more than half of charity fraud is related to purchasing, e.g. contracts for donations, or single person purchasing (where one person can order, receive and pay for goods and services).  We help establish pragmatic, proactive purchasing procedures.

Post incident work examples

  • Investigation - we assist in determining the facts of what happened and how, e.g. where police simply note the incident and issue a crime number for insurance purposes;
  • Loss evaluation - losses do not always occur in one transaction, e.g. use of corporate card for personal purposes;
  • Lessons learned reviews - these are a simple means for organisations to address the issue which led to the incident;
  • Organisations also commission "pre incident" type work after they have experienced a fraud or identifiable instance of corrupt practice.

Most of our clients work in regulated sectors and are subject to public scrutiny, regulatory oversight and the close interest of funders and other stakeholders.  We have extensive experience of assisting clients in undertaking investigations once a trigger event has occurred. In most circumstances we are invited to work with clients where senior staff and/orgoverning body members have had allegations laid against them.

Our approach is to determine the facts of the matter under investigation.  Failure to treat employees fairly and to carry out reasonable employment investigations may result in claims for mistreatment, wrongful or unfair dismissal or discrimination.  This fairness applies equally to both the person accused, the person accusing and any other staff impacted by events.  The facts of cases are rarely clear cut; they tend to be subjective in nature.  Accordingly, we work with published frameworks to evidence our findings so ensuring a high degree of objectivity.

We are adept at working in partnership with broader teams to ensure that the outcomes of investigations are fairly managed, properly actioned and ensure continuity of delivery of the business.

One of the key features of doing business in the 21st century is the need to conform and comply with multiple regulators, often across different jurisdictions.  Even small and medium-sized charities working within or across the UK must deal with multiple jurisdictions and meet the needs of a plethora of requirements of regulatory bodies whether a charity regulator, HMRC, the ICO, the Health & Safety Executive or Companies House.

Governance investigations and support services take many forms, and are not necessarily the result of wrong-doing, these include:

  • Refresh governance activity in line with current good practice;
  • Following a Board Self-Evaluation that identifies areas of uncertainty;
  • Notifiable Events or Serious Incident Report may require independent investigation:
    • following identification of an issue;
    • following submission of a regulatory notification;
    • to support a regulatory intervention; or
  • Following a regulatory notification.

Our approach is to keep your organisation and what it does at the center of our work.  We will:

  • Interview relevant trustees, staff and volunteers;
  • Review documentation relevant to our work; and
  • Draw on our broad and deep experience to ensure that all relevant matters are identified.

At the conclusion of our work we will provide an in depth report containing recommendations which are graded according to the level of risk exposure.