Effective fraud prevention requires input from charities, says NCVO report

Managing Risk report recommends closer collaboration between sector bodies, the Charity Commission and HM Revenue & Customs

NCVO
NCVO

Any new rules aimed at tackling fraud in the charity sector should be introduced only after consultation with charities, an NCVO report published yesterday recommended.

Managing Risk, published by an NCVO working group, said effective prevention of fraud among charities required closer collaboration between HM Revenue & Customs, the Charity Commission and sector bodies.

In his foreword to the report, Lord Highfield, chair of the group said that in the past proposals such as the 'fit and proper person' rules, introduced in the Finance Act in April 2010 to prevent charity fraud, had been introduced in a "hasty" manner and had led to "confusion and inconsistencies".

Highfield said new legislation should be based on "a clear understanding of the conditions in which charities operate" and should be "sensitive to the importance of protecting the reputation of the sector".

The report recommends there should be consultation with the charity sector before the introduction of any additional anti-fraud legislation by the government. It calls for recognition by government of the commission's role as an independent regulator, and says there should be closer cooperation and more information-sharing between the commission and HMRC.

It also says HMRC should implement "version control" on its guidance, which would allow charities to see earlier versions of guidance and when guidance was changed, to ensure they could not be pursued for obeying outdated guidance.

Other members of the group were Baroness Sherlock, Sir David Varney, former chairman of HM Revenue & Customs, Sir Stuart Etherington, chief executive of the NCVO, John Stoker, former chief commissioner at the Charity Commission, Caron Bradshaw, chief executive of the Charity Finance Directors' Group, and Lindsay Driscoll, a consultant at Bates, Wells & Braithwaite.

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