Chapter 3 Fraud and financial crime

The charity sector in England and Wales is very large and diverse. With a total annual income of well over £50 billion it is not surprising that opportunities exist for fraud and other types of financial crime. As the managers of their charities, trustees have a duty to ensure that funds are properly protected, applied and accounted for.

Because of the range and diversity of charitable activity there is no single method of financial control that will be suitable for all charities and all situations; trustees need to use their knowledge of their individual charities, and their judgement, to decide what are the best systems for them to adopt. This chapter aims to help trustees and other charity managers to be aware of the risks, to recognise some of the most common types of fraudulent activity and to devise ways to prevent fraud occurring. It also provides guidance about how to report fraud if it does occur.

The chapter is in two parts: