The Scottish Charity Regulator (OSCR) has recently issued guidance to charities about how to reduce the risk of fraud in their charity. The guidance focuses on the duty of trustees and some of the risks to which charities are particularly vulnerable, and provides practical advice on how to mitigate the risks. It encourages trustees to report any notifiable events to ensure they show the situation is being dealt with.
Where fraud occurs in a charity, OSCR will focus on ensuring that the trustees have acted appropriately in the circumstances and will look into whether there are suitable procedures and policies in place to protect the charity's assets. If trustees have failed to comply with their duties, OSCR will deem this misconduct and has powers to take action where appropriate. If a trustee has acted reasonably and honestly OSCR is unlikely to treat it as misconduct.