Preventing Fraud in the Charity Sector

Charity Closing Down

In June 2015, the Charity Commission opened a statutory inquiry into the Healthy Planet Foundation after several concerns were raised in their compliance case. These included, unusual payments to companies related to individuals associated to the charity, rate relief schemes and alleged fraud of £345,000, which was not accounted for in their accounts. September 2014 saw the launch of the compliance case into Healthy Planet Foundation, an environmentally friendly charity, after alarm bells were raised following the charity reporting a loss of £345,000. During the compliance case, red lights were flagged for a number of anomalies, such as the charity’s involvement in rate relief schemes (which resulted in legal action), payments being made to companies that have a connection to individuals affiliated to Healthy Planet Foundation and the fact that the charity only has two trustees and not the recommended three (that are necessary for valid and effective decision making). Following the compliance case, the Charity Commission has now launched a statutory inquiry to review:

  • The administration, governance and management of the charity
  • Business model and criminal activity
  • Conflicts of interest
  • Mismanagement and misconducts, which may or may not be present

In response to the announcement Francesca Polini, Chief Executive, stated “We have ceased all of our working relationships with the people who we believe are implicated and there have been a number of arrests… I personally reported the fraud and other wrong-doings along with the other current trustees on the board to the police and Charity Commission ten months ago”. It is crucial that charities take fraud seriously and implement effective processes and controls to prevent their charity being at risk. If you would like further information or confidential advice on your accounts, please contact Suda Ratnam at suda@raffingers-stuart.co.uk