Reading email scam in national news – warning to charities

Article date
4 May 2017
Primary interest
Voluntary sector

The Guardian newspaper and BBC News published articles in the last few days on how a local Reading youth football club fell victim to conmen via an email scam, losing over £28,000! The sad fact is that fraudsters sent emails to the treasurer masquerading as the chairman of the organisation and asking the treasurer to make payments for false invoices.

We all understand the pressure on volunteer treasurers and trustees, who are of course giving their time freely and with good intentions to benefit the local community, but is that enough? In this modern age, financial risk has increased as a result of cyber fraud and increased demands on time, perhaps leaving Trustees open to error, albeit without harmful intent.

Is it enough to say “I thought it was the chairman, I didn’t intentionally give the money away”?

Whilst we may sympathise with this response from a personal perspective, legally the treasurer is still accountable for the loss. The duties placed on a trustee are to ensure that the charitable resources are not handled negligently. Moreover, if you have any skills or experience, such as an accounting background, then the duty of care will be higher for you, i.e. it will be of a reasonable accountant in those circumstances.

So what’s the answer? It definitely shouldn’t be to fear becoming a treasurer or trustee. If that was the case, it would mean that the sector would lose some of its best people. The Voluntary and Community sector relies upon the goodwill and skills of the volunteers, especially trustees, who in the main are exercising their duty of care above and beyond what is required. However, to sleep well at night and ensure that our charities and community groups remain in operation for generations to come and are free from the malicious intentions of fraudsters, we as charity managers, trustees and anyone working in the sector would be wise to adopt a ‘business-like’ approach to financial procedures. Having a clear process in place, with limits on delegated authority for withdrawals and payments, together with dual signatories, is by no means a taxing activity and can be put into place quite quickly and painlessly. It really is as simple as that! Simple but absolutely essential.

RVA can help you to implement or improve your existing financial procedures, get in touch on advice@rva.org.uk or call us on 0118 937 2273.

You can also work towards the Safe and Sound Quality Award and have peace of mind that you have good governance in all aspects of the organisation and its work. Check out this article Getting the recognition your charity deserves on how local Reading charities have benefited from this Quality Award, and how your group could similarly benefit.

If you would like training on financial procedures, our next training course is on 12 June – Don’t Panic – Introduction to Book-keeping.

We also offer regular Trustee Training, our May course is fully booked, but booking is now open for the September course.

If you’re concerned about your accounts, late filing or feeling overwhelmed, don’t sit on it! Give us a call and we can guide you through the process.

Sources:

Full Guardian article available here

BBC article available here

Charity Commission Guiodance CC3 – The Essential Trustee – What you need to know

Charity Commission CC8 – Internal Financial Controls for Charities

RVA factsheet – Accounting and Reporting.