How OSCR looks at fraud

Published: 06/06/2018
Updated: 06/06/2018

 

OSCR’s role is to make sure that charities comply with the requirements of Scottish charity law and that charity trustees run charities in line with their legal duties.

Where fraud occurs in a charity, our focus is to make sure that charity trustees act appropriately and in accordance with their charity trustee duties. We look to see whether you have suitable controls over financial procedures to protect the assets of the charity and what steps the charity trustees have taken since the event happened to ensure it doesn’t recur.

If you fail to comply with the charity trustee duties then this is misconduct and we do have powers to take action, where appropriate. Our response will be proportionate depending on the situation. Where a charity trustee has acted reasonably and honestly it is unlikely to be treated as misconduct.

Find out more about what we can and cannot do and what to expect if we have a concern about your charity.

OSCR is not responsible for investigating or prosecuting criminal activity. Where we have concerns regarding criminal conduct we can and do report them to the Crown Office and Procurator Fiscal Service.

Our Inquiry Policy sets out how we assess concerns about charities. The policy sets out the matters that OSCR can and cannot deal with and explains how we assess concerns to decide if we take them forward. 

Where a fraud is identified within a charity, the charity trustees should first of all report this to the police. 

Reporting instances of fraud to OSCR

Our Notifiable Events regime requires charity trustees to report events that are likely to have a significant impact on their charity. When there has been a fraud, charity trustees should consider our Guidance on Notifiable Events to understand whether this should also be reported to us. 

Reporting demonstrates that charity trustees have identified a serious incident within their charity and that they are taking appropriate action to deal with it and protect the charity from further risk or abuse.

When reporting, trustees should provide as much information as possible about the facts of the case and the actions being taken. This will allow us to assess if the appropriate actions are being taken in any given case.    

There is no legal requirement to report a notifiable event. However, it is an important way for charity trustees to reassure us that they are on top of the issues they are facing. Ultimately, we may become concerned if there has been a matter that has not been reported to us; especially if it goes on to have a negative impact on the individual charity or the wider charity sector. Where something significant has happened within a charity and this has not been reported to us in full, we will take this into account if we have to open an inquiry. Ultimately, this could be considered to be misconduct. 

Reporting a notifiable event helps OSCR to assess the volume and impact of fraud incidents within charities and to understand the risks facing the sector as a whole. This helps us to decide how we can better support charities through our guidance and assess where we need to focus our activities.

If you’re not sure whether to report something as a notifiable event please contact us.