Fraud and theft reported to Charity Commission cost sector £13.5m last year

But David Walker, head of investigations and enforcement monitoring at the regulator, tells a public meeting that the true figure is much higher

Charity Commission
Charity Commission

Losses caused by fraud and theft reported to the Charity Commission in 2013/14 amounted to £13.5m in 2013/14, a senior commission figure told a public meeting yesterday.

But David Walker, head of investigations and enforcement monitoring, assessment and development at the regulator, told the event in Manchester that the reported figure was much less than the actual value of fraud.

The figure, £13,538,065, included only fraud and theft reported to the commission by serious incident reports and whistleblowers, said Walker. "The problem is that nobody knows the true nature and scale of fraud across the sector and the country as a whole," he said.

He cited previous reports from the National Fraud Authority, and another from the accountancy firm BDO, which variously estimated the losses to charities from fraud as between £148m and £1.65bn a year.

Walker said that charities were sometimes complacent about fraud risks. "There's often a culture of ‘this can never happen to us’" he said. "No charity is immune; no person is above suspicion."

He stressed one thing charity trustees should never do: "This is a favourite and very common thing – don't sign blank cheques. We always say it, but people still do it."

Earlier in the day, Neal Green, a senior policy adviser at the commission, advised charities not to be complacent about conflicts of interests. He said that identifying, being open about and reporting such conflicts was the best way to deal with them.

"It's not a slur on someone's character to say there’s a conflict of interest," he said. "It's a fact of life. Trustees have interests; they have lives outside their charities, and that's probably why you appointed them."

With conflicts of interest, he said, and the related issue of conflicts of loyalty, public perception was an important consideration. "Bear in mind how this would look to the outsider," Green said. "Do the Daily Mail test: how would this look in the papers the next day?"

He said the commission would hold a consultation, possibly in the autumn, on revisions to its trustee handbook The Essential Trustee.

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