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Most charity fraud committed by staff and volunteers

This news post is over 6 years old

Report finds charities are lax with internal security and governance

A third of charity fraud cases involve staff, volunteers or trustees, a Charity Commission report has found.

Figures from April 2015 to March 2016 show that trust was being abused mostly by insiders but also because charities were not secure enough in their governance to prevent insider fraud.

The statistics are only for charities in England and Wales.

Director of investigations at the commission, Michelle Russell, said charities were trusting as they were "committed to making a difference in society".

But she added: "Unfortunately, for a range of reasons, that mutual trust can be abused. The reality is insider fraud does happen in charities.

"Ultimately, whether it happens in a small charity with no employees or a multi-million pound household name, fraud diverts money away from those the charity is helping and who need it."

The warning to charitable organisations comes as the boss of a defunct Welsh charity was jailed for five years for embezzling £1.3m to fund his lavish lifestyle.

The commission has urged donors to be vigilant and watch out for sudden lifestyle changes in its volunteers and staff.

It added that strange behaviour or unexplained cash withdrawals could be a sign of insider fraud.

Russell added: "Our aim is to help charities increase their own resilience to this kind of abuse and protect donors' valued funds as well as protect public trust and confidence in charities."



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Neil Logan
over 6 years ago
It’s fine that this is being reported but having been in a position myself where I asked Charity Regulators to intervene in a situation I found myself in I would say not all cases are investigated to an acceptable level and that ignored warnings led to a 40 year old charity to close after 2 unfair dismissal cases went against them. Trustees were guilty on several counts by instructing me to carry out actions which would have cost the charity money and a trustee via their company to profit. This was reported to Regulators and funders yet ignored. This was followed by trustees not following company policies and procedures in relation to my suspension for whistleblowing, not following ACAS guidelines and employment law, creating false evidence and documents and not to mention encouraging a member of staff to make a false allegation against me which resulted in me being arrested. Thankfully, charges were dropped but the damage to reputation was done. Ultimately, these trustees will likely walk away from this unscathed but it cost me and 19 other employees their jobs, 50+ volunteer positions lost and projects to close! Why? Because nobody acted.... even the method in how you report to Regulators leaves a great deal to desired, online reporting is inadequate as when you are in this type of situation a conversation with a real person would be more beneficial as you have many doubts and concerns that you are doing the right thing as there is so much at stake. Thankfully, not all trustees are as bad as my former employers but it seems that any lessons which could be learnt will be largely ignored as nobody acted appropriately in the first instance and nobody seems to be too keen to follow up!
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