Category Archive: Charities

Tackling Charity Fraud- the Fraud Advisory Panel issues new report and guidance for trustees and senior managers

The Report, entitled ‘Tackling Charity Fraud: Prevention is better than Cure’ was published on 22 March by the Fraud Advisory Panel which works in conjunction with the Charity Commission.

Three points are identified in the report as compelling reasons for trustees to become educated in fraud prevention. The first is the fact that fraud is currently believed to cost the charity sector as much as £2.3 billion per year. Secondly, due to the sheer number of incidents reported to police, not all incidents will be investigated and even less will lead to a conviction. Thirdly, charities should be extra-vigilant as they are often seen as soft targets by fraudsters, and yet the potential reputational impact of becoming a victim of fraud as a charity is staggering.

The Report highlighted the importance of those in senior management positions within charities taking responsibility for anti-fraud agendas and setting an example to all within the organisation to demonstrate that fraud will not be tolerated under any circumstances.

To avoid the increasing risks surrounding fraud and cybercrime, the Advisory panel suggests that charities ensure that all passwords within their systems are unique, anti-virus software is updated, and staff are informed not to click on links in unsolicited emails. Charities should also consider obtaining cyber insurance to cover the costs incurred if a cyber security breach occurs.

If trustees detect fraud within their organisation, they must be prepared to mitigate the effects, call the police, and communicate with social media. The Report suggests that charities should have policies in place so that they have a pre-prepared plan of action in the event that a fraud situation occurs. Trustees must comply with their legal obligations at all times, and if they feel that they are struggling to handle a situation, they should turn to the Charity Commission for guidance and support. All serious frauds must be reported to the Charity Commission.

The Fraud Advisory Panel has also released additional resources to help charities to tackle the risk of fraud. These include checklists, case studies and infographics which can be used to train staff and beneficiaries.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or

The Government’s Public Accounts Committee publishes its latest report on The Care Quality Commission, revealing a 13% reduction in CQC funding by 2020

The Public Accounts Committee published a report on 8th march 2018, in which it was acknowledged that the Care Quality Commission (CQC) is set to see a 13% reduction in funding from 2015 levels by 2020.

The report concluded that whilst the CQC has improved significantly since it was first reviewed by the Committee in 2012, there are still areas which need work. In particular, the report addressed concerns that the CQC does not regulate health and care systems, instead focusing on the regulation of individual organisations. It was suggested that the CQC should instead consider how local systems are working as a whole, but it was noted that this falls outside of the core remit of the Commission, and a change in legislation would be required to bring this proposal into fruition.

There are also concerns that due to the strain on the CQC’s resources, it may not be able to keep up with its inspection obligations and this could result in a deterioration in the quality of care services. The Committee’s report revealed that the CQC intends to further reduce staffing levels over the next two years and whilst the CQC asserts that it is adequately resourced to manage this, the situation will need to be monitored to ensure that services continue to be inspected. The Public Accounts Committee requires the CQC to provide them with an update in April 2019 as to how environmental changes are impacting its ability to meet its inspection programme.

Other recommendations include ensuring that the CQC’s digital and information collecting infrastructure is in place and strengthening its relationships within localities to ensure that early warning signs of poor care are detected.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or

The General Data Protection Regulations (GDPR)

The GDPR is at the forefront of current discussions within the legal sector with the Regulations set to come into force in the UK on 28th May 2018.

The Information Commissioner’s Office (ICO) will regulate the GDPR in the UK and will be given the power to fine organisations, including charities, up to 20 million euros or 4% of their annual global turnover where they have made a serious breach of the GDPR.

It is therefore fundamental that trustees are aware of any policies or procedures that they need to put in place in order for their charity to become compliant with the GDPR ahead of 28th May.

There will be a new requirement for public authorities, organisations with large scale data processing, and organisations which process a large amount of sensitive data, to appoint a Data Protection Officer (DPO). If your charity does not fit into one of these categories, then you are under no obligation to appoint a DPO. However, many charities will process sensitive personal data due to the nature of the sector, and it is advisable to appoint a DPO in any case to avoid a situation in which you may have to defend a decision not to appoint a DPO.

It is essential that every charity has a data protection policy in place before the GDPR is implemented. The policy should include a list of all the data which the charity collates, and the purposes for doing so. Data risks faced by the charity should be identified as should be any measures the charity has in place to minimise those risks and keep data protected. The policy should also explain how individuals can ask to see their data and when their data will be deleted from the system.

One example of a key area relating specifically to charities which may be affected by the GDPR, is that of fundraising. Charities must be able to demonstrate why they have a requirement to collect and store data relating to their donors, and they must not keep the data for an unreasonable amount of time.

Donors must have freely given their unambiguous, specific and informed consent to the charity to process their data, and the charity should ensure that they are able to prove that this consent has been obtained. Consequently, it is advisable to gain written consent rather than attempt to rely on verbal communication of consent.

The same issues arise in relation to charities’ beneficiaries, employees and volunteers. Essentially, any personal data from any individual which is processed by the charity will be subject to the provisions of the GDPR.

Charities should also make sure that they have the correct procedures in place to detect report and investigate a personal data breach. There should be a clear understanding of when breaches should be reported to the ICO and the individuals affected.

For further information on how your charity can become GDPR-compliant, there is detailed guidance on the ICO’s website.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or

Connections with non-charitable organisations

The Charity Commission has opened a consultation to gain an insight into charities and their relationships with connected non-charitable organisations. The consultation asks charities for their opinion on draft guidance in relation to maintaining connections with non-charities.

Whilst the Commission notes that it is not a concern in principle for charities to have close connections with entities such as trading subsidiaries or charities established by commercial businesses, trustees must ensure that they do not jeopardise their legal duties in maintaining such relationships.

The draft guidance asserts that charities must preserve their separation and independence from non-charitable organisations so that the public are able to easily distinguish between the two.

Charities should also identify and manage the risks that may arise from the charity’s association with the non-charity and identify any conflicts of interests and loyalty when making decisions.

It is fundamental that charities are accountable for any relationships they may have with other organisations and that they therefore comply with all relevant accounting and reporting requirements.

The consultation will close on 15th May 2018 at 5pm.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or

Using the regulated financial sector

The UK’s charity regulators have issued an alert to request charities to use the regulated financial sector when they receive, hold, move or use money.

Trustees have a legal duty to protect charity’s funds and ensure that these funds are used for the purposes of the charity. The regulators’ alert explains that the UK banking system is regulated and therefore accepted to be a safe system in which to move funds internationally and transparently.

It is important that trustees can demonstrate audit trails to account for where their charity’s money is received from and where it ultimately goes to. A bank account in the charity’s name is the best way to manage and protect the charity’s money.

The alert, which was released on 28th February 2018, noted that if cash or other methods are used to transfer charity funds, it will be more difficult for trustees to demonstrate that they are complying with their legal duty to protect these funds. In such instances, the trustees must be able to validate their decision to move funds in this way and show that the risks involved in doing so have been appropriately managed.

However, even though placing charity funds in a bank account is undeniably the most practical way to safeguard money, it is not completely without its risks, and trustees should still be alert to the possibility of fraudulent activity in such circumstances.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or

Safeguarding as a priority

The Charity Commission has announced that there needs to be a stronger onus on safeguarding throughout the sector, in light of the regulator’s most recent annual report, Tackling Abuse and Mismanagement, which reveals an increase in safeguarding concerns.

On 5th February 2018, the Charity Commission released a press release which highlighted the significant increase, from 163 to 302 incidents of safeguarding concerns in the Commission’s regulatory compliance cases within the past year.

The press release reiterates that it is not just charities who work with traditional at-risk groups such as children, the elderly and the inform, who should be prioritising safeguarding, but all charities have a responsibility to ensure that safeguarding measures are in place.

Charities are reminded that they should provide a safe and trusted environment which has adequate safeguarding policies and procedures to enable those affected to come forward and report any possible incidents in the knowledge that it will be handled sensitively.

Trustees have a specific duty to avoid exposing beneficiaries and employees to undue risk so they should promote making safeguarding a priority and be alert to potential risks that may arise within their charity.

The Commission’s report advises trustees to review how their charity manages safeguarding and to ensure that all safeguarding incidents, complaints or allegations have been disclosed to the regulator.

In addition to this report from the Charity Commission, the Department for International Development co-hosted a landmark Safeguarding Summit on 5th March 2018 in an attempt to challenge UK-based international development charities to increase their standards and ensure that those under their care are protected. This comes as a response to recent allegations of sexual exploitation and abuse in the aid sector, which have received a significant amount of media attention.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or