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Financial investigation prompts Charity Commission action

Member: Nifa

A financial investigation by Yorkshire Police into a martial arts charity has prompted the Charity Commission to freeze the charity’s bank accounts. The force has begun a financial investigation into the Jack Raine Community Foundation, which works with children and families and runs coaching sessions in contact and non-contact martial arts and education.

The police investigation has prompted the regulator to make an unannounced visit to the charity’s premises. During the visit, the Commission found that there were insufficient financial records and no evidence of trustee meeting minutes. In addition, a spokesperson said it has “further serious regulatory concerns”, so will look at whether the charity’s financial controls are appropriate and whether trustees have complied with charity law.

The Charity Commission has the power to check whether trustees are meeting their legal requirements and obligations and can conduct financial investigations to ensure that the charity’s actions have been above board. In these cases, they undertake forensic checks using forensic accountants, such as going through bank accounts and transactions and collecting documentation or, as in this case, the lack of it. They will also interview trustees and other witnesses who might be able to shed light on the charity’s dealings. From this evidence, they will draw conclusions and are able to present their findings as expert witnesses in a court of law.

As the charity says on its website, the impact of fraud and financial crime on a charity can be significant, going beyond financial loss and the impact on the financing of a charity’s planned activities.

In addition, fraud may bring adverse publicity to the charity, damage to its reputation and affect its future fundraising prospects. It is therefore important that incidents of fraud and financial crime are addressed.

Author: Roger Isaacs, 23 May 2017

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