The Charity Commission is trying to reclaim money stolen from 17 charities – and three of the cases involve charitable funds of more than a million pounds, according to Michelle Russell, its head of investigations and enforcement.
Speaking at the commission’s public meeting in Newcastle yesterday, Russell said that of the regulator’s 62 active investigations, 17 involved the commission taking steps to seek the recovery of charity funds that had been taken fraudulently.
Thirty-seven of the 62 active cases are statutory inquiries, she told the meeting.
Speaking to Third Sector after her talk, Russell said she could not name any of the charities from which the regulator was trying to recover funds because the investigations were ongoing.
"Sometimes we go through the police and criminal proceedings; sometimes we make the trustees themselves take steps to recover that money," Russell told delegates at the meeting. "We also have interim managers in place who sometimes make it their job to get money back to a charity, or we can get the liquidator to try to get that money back."
If that fails, the regulator can ask the Attorney General for consent to carry out its own litigation to pursue the funds, which he has agreed to in one recent case.
From the start of March last year, commission investigations have dealt with suspected fraud and theft of charitable funds worth a total of £5m, said Russell. Through its regulatory and investigatory work, the commission has in addition protected more than £1.8m of charity money, she said.
During 2012/13, Russell said, the regulator had completed 29 investigations into charities and 61 investigatory monitoring reports into high-risk areas.
Accounting issues played a part in 12 of the 29 investigations, she said. Concerns about charities set up for improper purposes, or ‘sham’ charities, played a part in nine of the investigations, and 23 of the investigations looked into concerns about trustees, she said.
Russell said that 841 serious incident reports had been logged with the commission during 2012/13. "And, interestingly, 43 per cent of those relate to financial issues – either frauds, thefts or significant financial loss issues," she said.
The commission’s last annual report said that 1,027 serious incident reports were made by charities in 2011/12.
In 2012/13, the commission also carried out 76 pre-investigation assessments of charities, the stage before a full blown investigation, said Russell. The majority of the assessments were concerned with the misconduct of trustees and about half were taken forward for regulatory action, either in the form of monitoring or an investigation, she said.
The commission also exchanged information with the police 284 times in 2012/13 and talked directly to trustees regarding concerns about serious wrongdoing 58 times, Russell said.