The Importance of Volunteers

Mr Claw CoverDCAS has always been proud of its record in providing volunteering opportunities and this has in many occasions helped further the careers of our volunteers.
 
88D91407-BE0D-4A3A-B53D-6691E2548EF3This has never been more true than the case of Baker Salah, who after helping write our accounting manual ‘The Adventures of Mr Claw in the World of Charity Accounting’ has gone on to become a University Lecturer and will soon be awarded his Doctorate in Accounting and Finance.   Well done Baker!!!
 
Volunteers are the bedrock of the voluntary sector.  Without them we would not exist, as it is volunteers when acting as trustees who run charities.
 

Charity trustees

Charity trustees direct how a charity is run and help make sure it does what it was set up to do. This includes making sure the charity:

  • sticks to its charitable mission
  • has the money it needs
  • spends that money responsibly on the activities it was raised for
  • follows the law and doesn’t break its own rules

Charity trustees are also known as:

  • directors
  • board members
  • governors
  • committee members

Find out more here

The 6 Main Duties of Trustees

7CF0F4E4-98CB-4DC0-A5EF-6A1ABE6BCA14Trustees have overall control of a charity and are responsible for making sure it’s doing what it was set up to do. Their main duties are:

1. Ensure your charity is carrying out its purposes for the public benefit

You and your co-trustees must make sure that the charity is carrying out the purposes for which it is set up, and no other purpose.

2. Comply with your charity’s governing document and the law

You and your co-trustees must:

  • make sure that the charity complies with its governing document
  • comply with charity law requirements and other laws that apply to your charity

3. Act in your charity’s best interests

You must:

  • do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes
  • with your co-trustees, make balanced and adequately informed decisions, thinking about the long term as well as the short term
  • avoid putting yourself in a position where your duty to your charity conflicts with your personal interests or loyalty to any other person or body
  • not receive any benefit from the charity unless it’s properly authorised and is clearly in the charity’s interests; this also includes anyone who is financially connected to you, such as a partner, dependent child or business partner

4. Manage your charity’s resources responsibly

You must act responsibly, reasonably and honestly. This is sometimes called the duty of prudence. Prudence is about exercising sound judgement.

5. Act with reasonable care and skill

As someone responsible for governing a charity, you:

  • must use reasonable care and skill, making use of your skills and experience and taking appropriate advice when necessary
  • should give enough time, thought and energy to your role, for example by preparing for, attending and actively participating in all trustees’ meetings

6. Ensure your charity is accountable

You and your co-trustees must comply with statutory accounting and reporting requirements.

Find out more here

Keeping Up To Date

checklistWe’ve put together a checklist for you to help you to keep up to date with all your responsibilities. Hope you will find it useful!  Don’t forget that we are here to guide you through if you need any help!

Have you:

  • filed your Charity Commission Annual Return?
  • had your annual accounts examined?

If you are a charitable company, have you –

  • filed your annual accounts with Companies House?
  • checked when you should complete your Companies House annual return?
  • NO REMINDERS ARE SENT OUT THESE DAYS!
Have you:
  • registered with the Information Commissioner’s Office re Data Protection Fees?
  • checked when your insurance is up for renewal?
  • planned how to continue delivering services under conditions of COVID?
  • established working from home procedures, and will you need to change contracts of employment?
  • thought about how you will recruit new trustees and hold meetings?
  • started preparing your annual budget? If you need any help, do contact DCAS
 …..and finally – don’t forget to feel a sense of pride for all the work your charity does, and the important role charities play in the life of Derby!

Safeguarding and protecting people

Charity Commission LogoProtecting people and safeguarding responsibilities should be a governance priority for all charities. It is a fundamental part of operating as a charity for the public benefit.

As part of fulfilling your trustee duties, whether working online or in person, you must take reasonable steps to protect from harm people who come into contact with your charity.

This includes:

  • people who benefit from your charity’s work
  • staff
  • volunteers
  • other people who come into contact with your charity through its work

10 actions trustee boards need to take to ensure good safeguarding governance

Click on the picture below

10 Actions Safeguarding

More detailed information and advice can be found here

Charity Fraud Prevention Week – Taking Action

Charity Fraud Awareness Week 2021TAKING ACTION

If you suspect that your charity has fallen victim to insider fraud you should act promptly.

  • Refer to your response plan which should explain how, when and by whom the suspected fraud will be investigated, reported and resolved. It might include engaging external professional support.
  • Report the incident to your relevant national law enforcement agency. In the UK this is Action Fraud (England, Wales and Northern Ireland) or Police Scotland (Scotland only).
  • Report matters promptly to your charity regulator. For reports to the Charity Commission for England and Wales treat it as a serious incident. Use the online form to make your report, stating what happened and how you’re dealing with it.

BUILDING YOUR CHARITY’S DEFENCES

Checklist – Ask yourself:

  • Do we have a workplace culture in which fraud is never acceptable and everyone knows it? (An essential part of preventing fraud is to have the right ‘tone at the top’.)
  • Do we talk openly about fraud and is it clearly explained in our anti-fraud, bribery and corruption policy?
  • Is a whistleblowing policy promoted and supported widely within the organisation?
  • Are we developing standard operating procedures that reduce risk and encourage honesty? Are we making sure they are being followed?
  • Do we perform pre-employment screening of new recruits and in-service checks for established employees? Do we expect our partners to do the same?
  • Are we sharing our knowledge with other organisations so that known fraudsters cannot simply job-hop?
  • Do we offer support to employees in difficulty? (Desperation and dissatisfaction are common causes of fraud.)
  • Do we keep registers of gifts, hospitality and conflicts of interest? Are they transparent and reviewed regularly?
  • Do we provide mandatory anti- fraud and corruption training?
  • Is there a response plan for when an insider fraud does happen?

Charity Fraud Awareness Week 18-22 October 2021 – Insider Fraud

Charity Fraud Awareness Week brings together the charity and not-for-profit sectors from around the world to raise awareness and share good practice in tackling fraud and cybercrime.

Fraud HelpsheetGetting to know your staff

Performing proper due diligence in all staff and recruitment matters is an essential part of getting to know the people who work for you. It can greatly reduce the risk of insider fraud.
 

What is Insider Fraud?

This is when someone exploits their role or occupation for personal gain by deliberately misusing the organisation’s assets and resources. It often includes the abuse of trust.

Fraud can be committed by anyone, whether:

  • a trustee;
  • an employee (temporary or permanent); or
  • a volunteer.

This person may act alone or in collusion with someone else. Sometimes criminal gangs will deliberately seek out people ‘on the inside’ to help them commit fraud, for example by asking for information on how to bypass controls.

Warning Signs

Certain kinds of individual behaviour can be red flags for insider fraud. For example:

  • an aggressive or bullying manner that makes colleagues unwilling to challenge their behaviour;
  • a tendency to be over-protective of their work or to take on additional tasks beyond their job description;
  • asking to use someone else’s log-in details because they have forgotten their password;
  • an unwillingness to take holidays or be away from the office for more than a day or two at a time;

A very useful helpsheet, kindly prepared by Cifas and the Fraud Advisory Panel, can be downloaded here

Case studies of inside fraud in charities can be found here

Trustee Expenses and Payments

Trustee ExpensesThe concept of unpaid trusteeship has been one of the defining characteristics of the charitable sector, contributing greatly to public confidence in charities. This does not mean that a trustee can never receive any payment or benefit from his or her charity; there are sometimes good reasons why it can be in a charity’s interests to make a payment to a trustee. Trustee boards need, though, to minimise the risks to their charity’s reputation and operation.

Expenses are normally refunds by the charity of costs a trustee has had to meet personally (or which have been met on his or her behalf) in order to carry out trustee duties. In some cases, these expenses may be paid in advance. A refund of properly incurred expenses is not a trustee payment, nor does it count as any kind of personal benefit.

Some types of payment are often confused with expenses, when they are actually trustee benefits which HMRC will consider can be taxed as income. They can only properly be paid out of charity funds if there is suitable authority for doing so.

A charity can pay a trustee for the supply of any services over and above normal trustee duties. The decision to do this must be made by those trustees who will not benefit. They must decide that the service is required by the charity and agree it is in the charity’s best interests to make the payment and must comply with certain other conditions

More detailed information and guidance can be found in this document

Does Your Charity Need an AGM?

AGM imageNot all charities have members or need to have an AGM. The governing document should be checked to see if an AGM is required. A charitable company is only required to hold an AGM where stipulated in its articles of association. If the governing document does not require an AGM, the charity trustees may wish to call one (perhaps calling it a users’ meeting to avoid any confusion with a formal AGM).

Whether the charity is required to have an AGM or simply organise a users’ meeting, the charity trustees are only bound to act on decisions taken by the members where the governing document directs that those matters have to be decided at such a meeting. It is important that charity trustees are clear about the status and purpose of the AGM and that this is clearly communicated to those attending.

Unless the governing document states otherwise, the notice of the AGM will need to be sent to all the members of a charity and to any other people entitled to receive them. Some charities may be required to have an AGM or users’ meeting but not have a membership (for example, a village hall charity). In these cases, the instructions in the governing document about advertising the meeting must be followed. The governing document may state the number of days notice that must be given for calling an AGM. If it does not, reasonable notice should be given.

The commission recommend that copies of the charity’s annual report and accounts are either sent to each member, or made available at the venue prior to the start of the meeting (a company must send copies to all of its members). Anyone can by law request a copy of the accounts from the charity at any time. The charity is entitled to charge a reasonable fee for this.

The governing document may specify the information to be contained in the notice calling an AGM and company law imposes certain requirements in this respect. In all cases the commission recommend, as a minimum, that the notice calling the AGM sets out:

  • the date and time of the meeting
  • the venue
  • the details of the business to be considered (which will probably be mandatory items at this stage as members resolutions may not have been received)
  • an invitation to propose resolutions, and
  • if appropriate, requests for nominations (or the names of proposed nominees) for officers to be elected

More information and guidance can be found here

Watch out for CEO/BEC fraud

 CEOfraudWhat is CHIEF EXECUTIVE OFFICER (CEO) Fraud? 

CEO fraud, also known as Business Email Compromise (BEC), is a type of fraud that is enabled via social engineering. Social engineering is the manipulation of situations and people that results in the targeted individuals divulging confidential information.

CEO fraud involves the impersonation of a senior figure (usually the Chief Executive Officer) with subsequent requests for transfers of funds.

How does CEO fraud happen? 

CEO fraud is a request, often made via email, purporting to come from a senior person in the company, normally to the finance officer, requesting an urgent payment. 

The request may outline that the transaction is confidential and sensitive in order to discourage further verification. The fraudster may pick occasions when the real CEO is out of the office, or on holiday, preventing the financial officer from checking the validity of the request.

How can I help to prevent CEO fraud? A checklist: 

  • Any payment requests with new or amended bank details received by email, letter or phone should be independently verified. This includes internal emails from senior management that contain payment requests. Fraudsters can spoof email addresses to make them appear to be from a genuine contact, including someone from your own organisation.
  • Don’t be pressured by urgent requests, even if they appear to originate from someone senior – remember this is a common tactic adopted by fraudsters.
  • Be cautious of how much information you reveal about your company and key officials via social media platforms and out-of-office automatic replies.
  • Consider removing information such as testimonials from your own or your suppliers’ websites or social media channels that could lead fraudsters to knowing who your suppliers are.
  • Regularly conduct audits on your accounts
  • Make all staff aware of this type of fraud, particularly those that make payments.  
  • Ensure warning messages are understood and that appropriate checks, actions and processes are followed to ensure requests are genuine.
  • Sensitive information you post publicly, or dispose of incorrectly, can be used by fraudsters to perpetrate fraud against you. The more information they have about you, the more convincingly they can purport to be one of your legitimate suppliers or employees. Always shred confidential documents before throwing them away
 What to do if you suspect you’ve fallen victim to impersonation fraud 
  • If you believe you’ve fallen victim to a CEO fraud attack, contact your bank immediately. They will try to recover the money from the fraudster’s bank account. The quicker you alert your bank, the greater the chance of recovering the funds. 
  • Report it to ActionFraud – the police’s national fraud and cyber crime reporting centre. Even if you’ve not suffered any financial loss, this will allow the police to analyse trends and help them to prevent fraudsters exploiting other companies. You can file a report via their website at www.actionfraud.police.uk
  • Charities affected by fraud should also report it to the Charity Commission as a serious incident.
  • Where appropriate, the Charity Commission can also provide timely advice and guidance.