Charities against fraud: new web site launch

Charities against fraud: new web site launch

The Charity Commission, in collaboration with members of the Charity Sector Counter Fraud Group, has today launched www.charitiesagainstfraud.org.uk, a new website dedicated to helping charities in the fight against fraud. It provides an initial point of reference for trustees, staff and volunteers who want to find out more about tackling fraud in their charity, and includes guidance, top tips, case studies, as well as signposting users to other organisations tackling charity fraud.

The launch of the new website marks the start of Charity Fraud Awareness Week (24-28 October). According to the National Crime Agency, ‘individuals, the private sector and the charity sector lose billions of pounds each year to fraud’. The campaign – led by the Commission and the Fraud Advisory Panel – will be reminding charities how to limit their fraud risk. It aims to ensure that trustees and charity staff can recognise the warning signs of fraud and shape an effective and proportionate response.

Top tips to reduce your charity’s vulnerability to fraud include:

1.    Develop a strong counter fraud culture where staff are encouraged to play their part in the fight against fraud.

2.    Have in place and robustly apply internal financial controls.

3.    Encourage staff to voice concerns.

4.    Have a fraud response plan so that everyone knows what to do and when – stay calm but act quickly when incidents do occur.

5.    Ensure you report incidents to Action Fraud and to the Commission, via the dedicated reporting facility: RSI@charitycommission.gsi.gov.uk.

David Kirk, Chairman of the Fraud Advisory Panel, commented:
Fraud presents a serious threat to every organisation but unfortunately charities can be particularly vulnerable due to the high number of financial transactions they undertake. Fraud can manifest itself in many different forms and is constantly evolving – which is why we are urging everyone working with charities and not-for-profit organisations to join together and stop fraud against charities. Charity staff and trustees must stay alert to the risks and understand how to manage them.

Diana Isiye, Head of Counter Fraud at Oxfam GB said:
We know that charities can fall victim to fraud. Working together to encourage trustees and staff to start a conversation about fraud and share their experiences is a crucial way to ensure the sector is better equipped to meet the growing challenge posed by fraud.

Michelle Russell, Director of Investigations Monitoring and Enforcement at the Charity Commission added:
Fraud can thrive in an environment of weak governance and poor financial management, so we are reminding charity staff and trustees, as part of Charity Fraud Awareness Week, to seek out the good practice guidance that is widely available and to review their charity’s financial controls and procedures. We’re keen to work closely with charities to improve their fraud resilience and hope that the new site will enable charities to access and learn from the best practice that’s already out there.

Charity Fraud Awareness Week will conclude with the second National Charity Fraud Conference in London on 28 October, which will include panel discussions and presentations from Michelle Russell and Commission board member, Mike Ashley. Two regional events will follow in December and January for those not able to attend Friday’s conference. The Fraud Advisory Panel and the Commission will also be producing a conference report, summarising issues and conclusions and reminding trustees to maintain a counter-fraud focus.

If you’d like to get involved and help spread the word, a supporter’s pack is available and you can follow #CharityFraud on Twitter for live updates.

Trustees must engage with finance guidance

Press release: Trustees must engage with finance guidance, says charity regulator

Charity trustees must engage with and use finance guidance from the regulator if they are to run their charities effectively, the Charity Commission tells charity trustees.

The commission, the independent regulator of charities in England and Wales, has updated key finance guidance to show clearly that trustees are ultimately responsible for their charities’ finances, and respond to the need to make sure its guidance reflects the most current challenges facing thousands of charities.

Many charities face a daily challenge of making ends meet, balancing reduced income with potential increased demands or costs. Some inevitably end up becoming insolvent and need to wind up. With around 600 new charities being registered every month, competition for funding is very strong.

This climate makes the commission’s finance guidance essential reading. It covers the importance of having a good reserves policy and how trustees can manage their charities in charities in challenging circumstances. It says clearly what trustees must do, that they must understand the legal requirements, and know what they should do in terms of good practice.

The commission has also updated its popular ‘15 questions trustees should ask’ guide for trustee meetings to better reflect the current social and economic climate.

Sarah Atkinson, Director of Policy and Communications at the Charity Commission said:

We recognise that charities operate in a very challenging environment, with some charities heavily reliant on single sources of funding. So it is all the more important that trustees are in control of their charity’s finances. This means actively taking steps to manage their charity’s finances through regular monitoring, asking the right questions and getting professional help where needed. Donors and beneficiaries rightly ask questions about issues such as reserves, and want to understand why charities do or don’t have them. Reserves policies help tell that story clearly and demonstrate that trustees are aware of the real risks.

These guidance updates are designed to help trustees make the right call and support them, not to overburden them. That’s why there are also guides on how to set a good reserves policy for small and large charities. As regulator there is a limit on how much we can do as these are individual decisions for trustees to make. But these tools will help them manage any difficulties properly and with confidence.

The 3 sets of updated guidance are:

• Managing a charity’s finances: planning, managing difficulties and insolvency (CC12)
• Charity reserves: building resilience (CC19)
• Charity governance, finance and resilience: 15 questions trustees should ask

Managing financial difficulties

The commission recommends in its updated guidance that trustees review the charity’s financial position and its performance against budgets and future projections at least once a month, but the extent of the review will vary according to the size and stability of the charity. Proper analysis of financial trends and changes in budget predictions may help to assist early identification of financial problems.

Where their charity has to close, the commission expects trustees to have planned for an orderly shutdown. The guidance covers what is meant by insolvency, and what steps trustees should take if they believe they are insolvent, including getting good professional advice.

Reserves

The reserves guidance confirms that there is no single level or even a range of reserves that is right for all charities. Any target set by trustees for the level of reserves to be held, or decision that there is no need for reserves, should reflect the particular circumstances of the individual charity. However trustees should not simply monitor their level of reserves annually, but keep them under review throughout the year. Where a charity hasn’t got the reserves it thinks it needs, it is exposed to greater risk and the commission expects the trustees to address this actively.

The updates to make the sets of guidance clearer and more streamlined come ahead of a full review of the guidance later this year.

Charities targeted by sophisticated scams

Mandate fraud: charities targeted by increasingly sophisticated scams

The Charity Commission, the independent regulator of charities in England and Wales, is urging charities to remain vigilant to the continuing threat of mandate fraud and the changing tactics that fraudsters are using to target charities.

Mandate fraud occurs when the fraudster tricks a victim into changing bank account details, in order to divert legitimate payments intended for a genuine organisation (eg a charity supplier) to bank accounts instead controlled by fraudsters. This often involves the fraudster impersonating an organisation representative, either by email, direct mail or telephone communication. The fraudster may also use headed paper and/or the company logo to lend credibility and to gain the charity’s trust.

The threat of mandate fraud is an on-going issue for charities, with cases continuing to be reported to Action Fraud from across the sector. We first brought this issue to the attention of charities in 2010.

In recent months, the commission has become aware of mandate fraud attempts where the fraudster has been able to use the email address of a regular contact at the legitimate organisation to deceive charities into changing change bank details.

The commission recommends that trustees and charity professionals spend a few moments familiarising themselves with the Metropolitan Police’s mandate fraud advice and ensure that their charity has robust authorisation and monitoring procedures in place for changing bank details and managing payments. The advice is clear – any request to change bank account details is an unusual occurrence and should be treated with suspicion.

As a minimum, charities should:

• remain vigilant to the continuing risk of mandate fraud and raise awareness amongst those staff and volunteers with responsibility for charity finances – download the campaign posters produced by the Metropolitan Police
• be suspicious of any change of bank detail requests until independently verified
• check and verify all requests for change of bank details using contact information held separately by the charity
• never rely solely on contact information provided in any form of external communication that requests a change of bank details
• check that a sample of payments has been received by the legitimate organisation after the change of bank details has been actioned
• do not rely solely on the organisation to inform your charity that legitimate payments have not been received – by then it may be too late to recover the money.

Michelle Russell, Director of Investigations, Monitoring and Enforcement, said:

The mandate fraud cases we hear about increasingly involve cunning tactics by fraudsters to gain the trust and confidence of their victims. There’s no doubt that fraud and deception tactics will keep on evolving. Awareness of fraud risk and the tactics used by fraudsters is the most effective way of preventing charities from becoming victims.

At the heart of charity is trust, but when it comes to control of charity finances, it’s crucial that vigilance and caution are the key watchwords.

It is also a timely reminder for trustees and senior charity staff to reflect on how fraud-aware their employees and volunteers are, and to review their charity’s financial controls.

Read more about the mandate fraud prevention methods recommended by the Metropolitan Police.

If you suspect you or your charity may have fallen victim to mandate fraud, you should report it to Action Fraud immediately.

New and simplified Gift Aid Declaration

HMRC has just released a new and simplified Gift Aid Declaration.

This has particular implications for churches holding stocks of paper Gift Aid forms and envelopes.

The new model declaration has now been published on gov.uk. Links to the model declaration and enduring model declaration can be found at https://www.gov.uk/guidance/gift-aid-declarations-claiming-tax-back-on-donations

The new declaration will apply to all new donations. Declarations that are already in place do not need to be updated.

HMRC recommends that all charities, including churches, use the wording of the HMRC-approved model declaration. However, charities remain free to adapt the model declaration, for example to include their own branding or additional messages.

Please note that Churches holding stocks of printed materials using the previous model declaration may only continue to use these until 5 April 2016.  From 6 April 2016, the new declaration must be used. Incorrect declarations may result in Gift Aid claims being invalid.

Links to samples of the new Declarations can be found here: http://acat.uk.com/news.html

If you require further information please contact Harri Lloyd Davies on 01792 410100.

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

What reserves should a charity hold?

Bevan & Buckland video series No 3 – What reserves should a charity hold?

This is the third in a series of six short videos that have been developed to provide businesses with essential advice across various key areas.
The videos will feature an expert insight into business valuation, research and development tax credits, auto enrolment, financial advice, tax investigations and charities.

Bevan & Buckland Charities Partner Alison Vickers explains what reserves should a charity hold?

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

What do we do? – The Audit Department

Ever wondered what a firm of chartered accountants does? 

As one of the leading accountancy firms in Swansea & West Wales, Bevan & Buckland get asked this question on a regular basis.  We have therefore put together a short series of blog posts to explain the wide variety of work we carry out, starting with our Audit department.

What we do:

1. Statutory accounts preparation for:
   • Charities
   • Sole traders (minimal)
   • Partnership (minimal)
   • Limited companies focussing on larger companies, research & development companies and groups.
   • IFRS companies

2. Audit of the financial statements for:
   • Charities
   • Limited companies
   • Housing associations

3. Other specialist audits:
   • Solicitor accounts rules (SAR) audits
   • Licensed conveyancers audits
   • Client money audits
   • Welsh European Funding Office (WEFO) grant audits
   • Communities First grant audits

4. Other ad hoc work
   • Service charge certificates
   • Cash flow forecasts
   • Due diligence work
   • Company valuations
   • Risk assessments
   • Statement of affairs
   • Management accounts/reporting
   • Sage integrated reporting
   • Clients’ Sage re-builds
   • Assistance with software packages
   • Training courses for clients covering trustee training, basic book keeping, charity accounts etc

Bevan & Buckland Accountants Swansea Tel: 01792 410100

Bevan & Buckland Accountants Haverfordwest Tel: 01437 760666

Bevan & Buckland Accountants Pembroke Tel: 01646 682383

Bevan & Buckland Accountants Carmarthen Tel: 01267 233115

Bevan & Buckland Accountants St David’s Tel: 01437 720352

Bevan & Buckland Accountants Cardiff Tel: 02920 459960

 Bevan & Buckland Accountants Newton Abbot Tel: 01626 361484

Free training on charity governance issues

CHARITY GOVERNANCE

The ICAEW and the Charity Commission have recently completed a pilot project which offered free reviews of financial controls and risk awareness to charities. 

A summary of the findings throws up some interesting issues which are likely to impact on charities throughout Wales.  The twenty five charities involved in the pilot project were all relatively small charities with income of less than five million and many of them with income of less than a quarter of a million.  Currently ninety nine per cent of charities in Wales have income of less than £5m.  Their review found a number of interesting issues, many of which are likely to impact charities throughout Wales at present.  Some of their key findings were:- 

• Many charities rely on one main source of income and are currently looking to diversify their funding sources.  There are several cases where a charity was reliant on one donor and this potentially was causing independence issues.
   
• Many of the charities had found, in recent years, there was increasing competition on the high streets for charity shops meaning the income from this source was being eroded.
   
• Several charities had been forced to reduce staffing levels and replace them with volunteers in order to cut costs.  
   
• Many of the charities found that, trustees in particular, required additional training on financial management.

The review went on to assess the charities’ performance in the major governance topics.  The major topics are strategy and planning, risk awareness and management, internal financial controls, fraud and financial abuse management and information and communication of finances.  Their findings found out that 58% of the charities had some more significant gaps in these areas which could be improved.

We, at Bevan and Buckland, have now been working for a number of years with our charity clients to improve governance and offer free annual training on a number of governance issues.  If you would like to book free training sessions, please get in touch by either e-mailing charities@bevanbuckland.co.uk or calling Harri Lloyd Davies on 01792 410104

http://www.bevanbuckland.co.uk/sectors/charities

AWEMA HIGHLIGHTS THE NEED FOR GOOD GOVERNANCE

Over the past two months the spotlight has been shone on the quality of governance at the Swansea based charity Awema.

There have been several reports looking at the issues that have arisen within the charity and these highlighted concerns with the following areas:

– Governance arrangements in relation to Awema Management Board (ABOMA) and management;

– Financial controls and processes;

– An absence of key policies and procedures; and an organisational structure that does not adequately support the operations of Awema

These problems at Awema have highlighted an important part of the role of being a charity trustee and the responsibilities involved.

Over the past year we have provided training to a number of charity boards on what good governance means both in principle and in practice. 

It is vital, particularly for new trustees but also for people who have been trustees for many years as the Charity Commission guidance is always being updated.

For guidance on the Hallmarks of an Effective Charity follow this link: http://www.charity-commission.gov.uk/Publications/cc10.aspx#c

If you are a charity trustee and concerned that you do not fully understand your responsibilities we would be happy to deliver training on what is expected of you.

We offer free training to Charities so if you are interested please contact Harri Lloyd Davies on (01792) 410104 or email harri@bevanbuckland.co.uk

Full details of our courses can be found at: http://www.bevanbuckland.co.uk/sites/www.bevanbuckland.co.uk/files/documents/BB%20Charity%20training%20programme%202011%20%282%29.pdf

Free Sage charity accounts seminar

Are you a Charity – using or thinking of using Sage?

If you are then we have a few spaces left on our next workshop.

Bevan and Buckland offer free workshops with advice to charities and not or profit organisations that use or are interested in using Sage 50 Accounts.  These workshops demonstrate the benefits of Sage 50 Accounts for charities, helping you to get the most out of the software.

Specific areas covered in the workshop include:

• Charities Launch Pad
• VAT requirements for HMRC
• Funds – Unrestricted, Restricted & Endowment
• Donations via the Sales Ledger
• SOFA Categories for Chart Of Accounts to produce a SOFA report
• Gift Aid management
• Basic Membership Management
• HMRC Approved Gift Aid report
• Departmental Budgets
• Project Costing improvements
• Report Designer
• On line card payments
• Drillable reports
• Sage Health check

Can you join us?

Date: Tuesday 22 November

Venue: Village Hotel Swansea

Timing: 9.30-11.30am

Reserve your place by calling 01792 410100 or email events@bevanbuckland.co.uk or register online here.

We look forward to seeing you!

Are you a charity using Sage?

Would you like to know more about the functions within Sage accounts to help you improve your charities fund management and accountability?

Why not book your free place at our latest Sage training course, full details are below or you can book online at www.bevanbuckland.co.uk/events

We hope you can join us, places are limited so booking early is recommended.

Many thanks

The Marketing Team
Bevan and Buckland