OG 412 Reporting Suspected Crimes to the Police

Last reviewed:
3 July 2014
Last updated:
3 July 2014

Policy Statement/Overview

Criminal acts connected to the work or operations of charities or criminal acts by those involved with charities have the potential to do great harm to individual charities and/ or to the reputation and public trust in charities generally. We do not investigate crimes but issues of criminal conduct do come up in our casework. Criminal matters should be reported to the police or relevant regulator, whether that is by us or by the charity depends on the nature of the alleged crime. In some cases, such as suspected terrorism, we are required by law to report our suspicions.

Our Compliance Toolkit: Protecting Charities From Harm explores particular forms of criminal activity and how trustees may safeguard their charity from risks of exploitation by those with criminal intent. It is equally important for us to be clear about what we do if issues of criminality connected to a charity come to our attention.

In our experience the most common types of criminality that we come across connected to charities come in the form of theft or fraud and financial crime. However, we also deal with cases where criminals exploit the public trust and confidence in charities and those who work for them for other purposes such as harming beneficiaries or subverting a charity's activities for terrorist purposes. Our consideration about criminal matters also extends to those holding office within a charity who have committed a criminal act irrespective of whether the charity was involved. The nature of the regulatory issues we encounter may require us to pursue our inquiry or regulatory action concurrently with a police inquiry.

Summary of the guidance

Our responsibilities for reporting and to whom is set out at section B1.

Making a decision about whether we should run an investigation at the same time as the police can found in the Decision Matrix at section E3, with the key points on how to do this at section B2.

A chart of potential crimes we might be faced with can be found at section D1 and D2 highlights weaknesses that may be found in charity operations that could expose a charity to criminal activity. 

Casework Guidance

B1 What is our role when criminality is identified?

B1.1 Our role as charity regulator

Our role as charity regulator is to promote public trust and confidence and ensure compliance. This role includes investigating matters of misconduct or mismanagement (link) and to act to protect charity property or beneficiaries, this includes when a crime has taken place or is suspected. Our role does not extend to investigating an alleged crime itself. Where we uncover or suspect criminal activity we must ensure that our concerns are reported to the correct authorities and consider whether there are implications for the way the charity is being run (whether the alleged crime has arisen due to misconduct or mismanagement by the trustees or non-compliance by them) and the impact of such allegations on the charity's reputation and the public trust and confidence in the charity sector generally. We also tend to look ahead to resolve the problems and prevent further abuse. 

We may uncover suspected criminal activity as part of our casework or it may be reported to us from a number of sources including:

  • whistleblowers 
  • those who have legal or professional obligations such as reporting accountants or independent examiners - see our guidance in CC 32 for independent examiners
  • from the charity itself when reporting a serious incident
  • members of the public
  • donors
  • others connected to the charity such as ex-employees, volunteers, beneficiaries or supporters 

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B1.2 Our responsibility to report suspected criminal activity 

As civil servants we have a responsibility to comply with the law and uphold the administration of justice. This includes reporting crime or suspicions of crime to the police in the course of our work. In the case of suspected terrorist financing we have a specific statutory duty to report (see B1.3 below).

We should always advise trustees or others making reports to us about alleged crime to make a report to the police themselves.

The question of whether the police open an investigation has no bearing on whether or not we make the report. The police keep records of crimes reported and they will decide on whether or not to open an investigation.

The nature of the crime determines to which police authority we report. 

Police authorities include:

  • local police 
  • Action Fraud (the national fraud reporting centre) which links into the National Fraud Intelligence Bureau (NFIB) run by the City of London Police, being the lead force for economic crime in England and Wales
  • The Metropolitan Police's National Terrorist Financial Investigation Unit (NTFIU)
  • Regional Counter Terrorism Units
  • National Crime Agency (NCA)
  • Serious Fraud Office (SFO)
  • HMRC (Criminal Team and/ or Charities Team) 

We may also need to make reports to other principal regulators where we are dealing with exempt charities, for instance, the Department for Education where schools are involved. 

Our initial approaches to the police will usually be through the Intelligence Team in line with our Memorandum of Understanding with the Association of Chief Police Officers. The intelligence team will advise on who to contact, the information we provide and in some cases may make the initial contact. 

OG405 Sharing Information with other public authorities under the Charities Act 2011 highlights the action we take in sharing information. It considers the principles to which we must adhere in sharing information, including data protection and how sensitive or restricted information may be used.

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B1.3 Reporting terrorism offences

Section 19 of The Terrorism Act 2000 requires that we must report suspicion or belief of terrorist financing activity as outlined in sections 15 to 18 of that Act. Unlike other criminal matters, failure to report suspicion or belief of terrorist financing activity is, in itself, a criminal offence on our part. Such reports should be made to NTFIU using the single point of contact (SPOC) - the Intelligence Teams will confirm who the contact is. Further information about terrorism offences and approach can be found in OG410 Charities and Terrorism.

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B1.4 Reporting suspected fraud or financial crime

We provide detailed information for charities in our Compliance Toolkit where we explain our strategy for dealing with fraud and financial crime. In making reports to the police we need to understand and be able to describe the actions we have uncovered or been made aware of.

Fraud is a form of dishonesty involving, amongst other things, false representation, failing to disclose information or abuse of position, which has been undertaken to make a gain or cause loss to another.

Theft is dishonestly appropriating property belonging to another with the intention of permanently depriving the other of it. 

Examples of fraud and financial crime can include:

  • misuse of a charity's bank account
  • fraudulent credit or debit card transactions or charges
  • stealing or "skimming off" money from cash collections
  • theft from charity shops or other trading activities
  • fake fundraising events and requests for donations
  • fake grant applications
  • the creation of false invoices or purchase orders
  • falsely claiming for provision of services to beneficiaries that do not exist
  • using a charity's databases or inventories for personal profit or unauthorised private commercial use
  • identity fraud

The Fraud Act 2006 provides the legal basis for action against fraudulent activity.

If we suspect or detect fraud or financial crime in a charity and/ or by its trustees we must report it. It can be hard to work out exactly what offence may have been committed and it is not our role to decide this. Where we think a fraud related offence has been committed we will normally report it to the NFIB using the Action Fraud online report form. However, it is still possible to report frauds direct to the local police. Where the local police refer you back to Action Fraud we can insist on local reporting.

The police and Action Fraud have in the past declined to accept reports from us because we are not the victim of the crime. Other cases we have reported have been logged as an information report only and not recorded as a crime. This is incorrect. Action Fraud and NFIB have now accepted that the Commission can report a suspected crime directly. They accept that as regulator we are representing the public, who are the victims of a fraud in a charity. In addition, where the matter is "insider fraud" (ie someone in control of the charity and/or its assets) the perpetrator is not likely to report the fraud themself.   

Our report can be made using our Intelligence Team or by caseworkers where it is uncovered as part of an ongoing case.  Any report to NFIB should be made via Action Fraud using the online form. Even where case officers report the matter direct it may still be helpful to discuss the issue with the Intelligence Team, taking advice where necessary. When making a report case officers must tick the "victim of crime" category to ensure it is reported as a crime. It is possible that we will not hear back for several weeks, which is standard practice. Therefore, if the matter is urgent, the case officer should follow up their request via the Intelligence Team that has direct links with NFIB. Case officers must be prepared to provide a witness statement, understanding that this may result in them being a witness in a criminal trial. Information on making witness statements can be found in Investigations and Enforcement Desk Guidance.   

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B1.5 Making other reports to the police

In general terms our first approach is likely to be to the police force where the alleged crime was committed (this is set to change in 2014). The process begins by contacting the liaison officer for the force concerned. This person will not usually be involved in investigating the case but will provide us with a further contact name. Once we have this contact we need to establish whether the police are likely to take on the criminal aspects of the case. This should always be done by email (or letter if necessary) and should report our concerns of suspected criminality and why. We should always ask for a crime reference number. The email should be logged on file.

What follows the initial email will depend on circumstances but may include:

  • a telephone conversation to discuss the issues of the case
  • meeting with the police to discuss the case and review the evidence
  • further correspondence to the police outlining details of the case and outlining the evidence we have to support the view that a criminal act may have taken place

Although the police may agree to investigate they will not always take a case through to prosecution. A number of factors may influence this decision including the type of case, the adequacy of the evidence, length of investigation, pressure of other cases and the opinion of the Crown Prosecution Service that it is not in the public interest to pursue.

It is important to keep cases referred to the police under regular review and discuss progress both from our perspective and that of the police. In some cases the police may ask us to hold back on a temporary basis from action with our case; in other cases we may run our case concurrently with a police case particularly if there is an ongoing risk to charity property, assets or beneficiaries - see section B2 below about managing our concerns with risks to a police case.

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B1.6 Reporting Checklist

Our regulatory concerns in relation to reporting crime include:
Has the matter been reported to the police? If not, this should be done as soon as possible by us and/ or the charity. Log the crime reference number and the force dealing with the issue.
Is it a case of money laundering or terrorist financing? Have the trustees complied with the specific duty to report? We must also make a report in accordance with section B1.3 above.
Has the matter been reported to us as a serious incident under the RSI regime and logged accordingly? If not, the trustees need to make the report.

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B2 How we handle cases involving alleged criminal activity

B2.1 The role of the Intelligence function

The role of the Intelligence Team will depend on each case:

  • they may be the initial contact with the police to report crime and where the Commission has no open case on the matter, they will be the only point of contact with the police
  • if there is a live concurrent case and Intelligence are the contact point, they are responsible for ensuring caseworkers receive appropriate and timely information about their cases so that it can be used to enhance operational casework
  • the Intelligence Officer may be required to provide a witness statement to the police about information we hold on the Register of Charities or in our role as regulator about a charity or someone connected to it. They might be asked to be a witness at any subsequent prosecution.
  • in cases where the concern is about a someone committing an offence who may already be disqualified as a trustee a case officer may request verification of disqualification or other circumstances from the Intelligence Officer (the procedure for requesting checks on individuals can be found in the Investigation and Enforcement desk guidance)
  • where it is a more in-depth case, the police may need to work with us more closely on matters to do with their investigation especially where we also have a relevant case open. It may be more efficient for direct contact with the police to transfer to the case office. The case officer must ensure that all subsequent disclosures are logged as sections 54 to 56 exchanges and the Intelligence Team informed. 

Nominated intelligence analysts will also act as counter-signatories for Disclosure and Barring Service checks (see OG510-2 Charity Trustees: Disclosure and Barring Service) and will produce intelligence reports on pre-investigation cases where requested.

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B2.2 Assessing the case in line with our Risk Framework

Each case will be considered on the basis of the circumstances and assessment of the evidence.  We use our Risk Framework to assess the seriousness of what is alleged.

Our approach to the case will also take account of whether:

  • the trustees have acted promptly and responsibly in dealing with the matter with proper management of the risks
  • the trustees have reviewed/ acted in accordance with the charity's policies and procedures and whether these are adequate in the circumstances or should be reviewed in the light of what happened
  • the circumstances give rise to any issues of misconduct and/ or mismanagement by the trustees or put at risk the charity's property, beneficiaries, activities or public trust in the charity, for which the trustees or the Commission needs to take action
  • in the case of financial loss, what action should be taken to recover that loss. 

We will consider whether the criminality raises regulatory issues including misconduct or mismanagement of a charity and/or risk to the charity that we need to protect.

This will depend on the:

  • nature of the criminality and seriousness of the offence 
  • extent to which trustees, officers, agents. employees or others have been involved
  • nature of any involvement and whether that involvement compromises their position within the charity 

We look at whether the evidence indicates: 

  • the criminality has taken place outside the charity
  • the charity is a victim of crime
  • the charity has enabled, allowed or facilitated criminality because the trustees or employees were negligent in carrying out their duties and responsibilities that left the charity vulnerable
  • deliberate actions to carry out or cover up a criminal offence 

Action we take will be designed to:

  • stop any criminal activity that may be taking place connected to a charity 
  • prevent recurrence by making sure the charity operates in a way that does not directly or inadvertently encourage criminal activity 
  • ensure that appropriate authorities are informed 
  • ensure trustees and others account for their actions in administering the charity where criminal activity has occurred   

Depending on what we find we may need to use our statutory powers. In all cases the trustees will be required to account for the situation and where appropriate we may use our powers to suspend or remove them from office. This may also apply to officers, agents or employees of the charity. In cases where the charity suffers a financial loss we may require money to be repaid.  

There may be some cases where the charity will wind up because of the extent of the criminal activity, the damage to its reputation or the damage it would cause to reputation of, or public trust and confidence in, charity generally.     

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B2.3 Concurrent Commission and Police action

Our regulatory role means that we may need to continue with action to investigate misconduct or mismanagement or to protect the charity's beneficiaries or property even where a police investigation is continuing or criminal proceedings have begun. In the past there has been confusion over whether we could continue to act whilst the police have an open investigation. The situation is that we can act but it is important that any action we take on our case should not prejudice the criminal investigation and good communication with the police is essential. See the decision matrix at section E3 which considers the overarching issues in taking the decision to pause the case or continue with concurrent action.

Points to consider are:

  • being clear about our role, in that we are examining regulatory compliance issues and not investigating the crime itself
  • why it is important for us to continue with our case even thought the police are investigating; this is usually because beneficiaries or assets may be at risk and we need to use our powers to protect them or prevent further abuse
  • the lines of inquiry the police intend to pursue and where we may need to put elements of our case on hold where it might prejudice police action. (This will not be indefinitely as the most sensitive periods are before suspects have been interviewed under PACE and before charges are brought.)
  • having discussed the case with the police we need to have written confirmation of what has been agreed in terms of progressing (or not progressing) the case
  • where we agree to put our case on hold the case officer must ask for regular updates on progress from the police and ask whether we may resume our action 
  • as a regulatory authority we may obtain evidence to further our own case that we may be required, or decide as it is relevant, to pass on to the police, this must be done in line with the policy outlined in OG405 Sharing Information with other Public Authorities under the Charities Act 2011. We may also need to label guidance clearly with "do not destroy" where it is likely to be needed as part of a criminal case
  • care needs to be taken when interviewing potential witnesses or suspects that our questions or their answers do not stray into a topic area that is being considered by the police
  • the action we take when a trustee is charged with a serious criminal offence because of their conduct at the charity (eg theft of charitable funds) and they are continuing in their role. (We need to consider whether to open an inquiry and suspend the individual from their position in the charity and take any other steps to protect the charity.)

Where it is decided that our action would prejudice a police case then we may temporarily put our case on hold (sometimes referred to as Stop the Clock), providing there is no danger to beneficiaries or assets, until the police action is complete or is at a stage where we may continue. We may want to use protective measures, such as restricting payments etc, until we can resume our inquiry. Once charges are brought we may need to request that the police evidence and witness statements are shared with us. Inquiry cases that involve police action will include handling of sensitive information and evidence. Any exchange of information will be subject to the provisions of section 54 to 59 of the Charities Act - see OG405.

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B2.4 Recovery of charity losses

It may be possible to recover charitable funds lost because of criminal activity in a charity, through:  

  • application to the court as part of a criminal case

or

  • civil recovery pursued by the trustees

Criminal cases which subsequently go to court allow us to ask for those assets to be recovered through the criminal proceedings under the Proceeds of Crime Acts. We should consider whether we or the trustees should make representations to the police for recovery to be made via the court as part of their criminal case. The police will have a procedure by which an application for a Compensation Order can be made.

Even though cases do not always get to court it does not mean that there is no case for restitution. It will be for the trustees to look at the circumstances of the loss and decide whether there may be a case for civil recovery from those who caused it. We would expect them to take legal advice on this.

In cases where the trustees are unwilling or unable (eg because they are the perpetrators of the crime) the Commission must consider restitution. 

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B3 Suitability to be a trustee, employee, agent or volunteer

Even where someone is convicted of a criminal offence occurring outside of the charity's activities it may have relevance to that person's position within the charity be it as a trustee, employee, agent (including volunteer) or officer. 

Trustees have responsibility for directing a charity's the affairs; they have a duty of care to the charity and its beneficiaries, ensuring that the charity is solvent, well run and lawfully delivering its charitable objects for the benefit of the public. Therefore, they must be suitable people to fulfil this position of trust and they must ensure that those working for the charity are also suitable people for the position for which they apply.  

Most criminal convictions do not automatically bar individuals from taking up a position as a trustee of a charity. The most common offences that would exclude a person from trusteeship would be those involving elements of dishonesty or deception; the most obvious being fraud or theft. In other cases the issue of whether a conviction affects a charity will depend on whether: 

  • there is a legal reason why a person is not considered suitable to hold the position (eg a person disqualified from trusteeship under the Charities Act or a person with a conviction related to child abuse applying for a regulated position)
  • the conviction raises doubts about the suitability of the person for the role (eg someone with a conviction for fraud applying for a Finance Director role)
  • the appointment of the person would bring the charity or charity generally into disrepute because of the nature of the conviction (this may also tie in with suitability considerations above)

Recruitment practices within a charity will need to take account of legal considerations for recruitment such as the Rehabilitation of Offenders Act 1974 and the time period for spent convictions -link  and human rights considerations. 

Other than in the smallest of charities we would expect recruitment and risk assessment policies to be in place that are appropriate to the nature of the work done by the charity. Policies and practice will give rise to highlighting what is relevant in a recruitment situation. Whether a person's criminal record affects their suitability to hold office depends on a number of factors, including:

  • whether the conviction or other matter (eg a caution) revealed is relevant to the position in question
  • when the offence took place and whether it is legally spent under the Rehabilitation of Offenders Act 1974
  • the seriousness of the offence or other matter
  • whether this is a single occurrence or a repeated pattern of behaviour
  • whether the applicant's circumstances have changed since the offence occurred
  • the circumstances surrounding the offence and any explanations provided

In some cases the person may bring a positive insight to the role because of their experience (eg someone with alcohol related convictions in an alcoholic rehabilitation charity). It would then be the responsibility of the trustees to manage any risks and public trust and confidence issues, if any, associated with the individual in carrying out the role. 

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Case Studies

D1 Examples of how criminal activity might occur in a charity

Charities can in certain circumstances make themselves vulnerable to exploitation by those who wish to use the legitimate structures and processes of a charitable organisation for illegal purposes. 

Circumstances Possible misuse
Use of offshore bank accounts by one or more trustees to place funds held in the name of a charity. Offshore bank accounts take money held in the charity's name outside the UK banking system's regulatory regime and can make it easier for illegal funds to be made to look like charitable funds and for charitable funds to be transferred elsewhere.
Charities doing business with private commercial concerns owned by charity trustees. Such a situation may be incompatible with a trustee's duty to act gratuitously but further it could be an indication of a sham charity set up by individuals to cover up movement of money or to advance business rather than charitable interests.
Charity bank accounts opened in the name of a charity but with only one signatory who may not even be a trustee. This allows charity funds to be manipulated by one person and can make it easier to disguise illegal funds being added or removed from the account.
Request from a donor of large amounts to return a donation or part of it because it was made from the wrong bank account. This may seem like an honest mistake from a donor (who may be a regular donor) but it can happen regularly across a number of charities and could disguise money laundering activity. In effect illegal money placed with the charity is returned from a legitimate source. 
Close working and joint financial responsibilities between a small number of trustees or trustee and employee to the exclusion of other trustees and staff members. Whilst working in cooperation with others is viewed as a positive thing it should not be done to the exclusion of others who have a right to information. Illegal financial dealings by one person very often require collusion with one or more individuals from within the charity.

 Loans to charities with agreement to repay at the sum loaned at a set date. This may also include loans made in foreign currency where the request is to return the loan in the form of a sterling cheque.

 

Whilst this arrangement allows a charity use of interest on the money loaned it is a tactic used by money launderers to place money with the charity and then receive what is in effect clean money from a charity.

UK based charities obtaining work permits for foreign nationals who work for the charity, charity's subsidiary trading company or a charity partner that delivers projects.

 

Use of permits for UK employment of foreign nationals require close monitoring to avoid permits being misused for smuggling of people and those who might use it as an opportunity to smuggle cash or drugs.

Use of commercial companies as a conduit to hold funds for charity work in areas abroad where no banking facilities exist.

 

This takes charity money out of the trustees' control. The money appears to be the property of the company and becomes vulnerable for use as such by the company. It is also subject to foreign banking systems in sometimes uncertain financial conditions.
Subsidiary trading company activity not properly monitored by the trustees. Insufficient controls and monitoring of trading activity can allow for money laundering activity where large sums can be moved in and out of accounts with false invoicing used as a device to cover the illegal activity. 
Use of aid convoys that cross national boundaries to disaster areas. Whilst convoys are a fast response to desperate situations their use needs to be properly arranged and monitored to ensure that they are not used for terrorist purposes, illegal trafficking of drugs, money or people, or manned by those seeking to exploit vulnerable beneficiaries. 
Solicitations to charities asking them to assist in the recovery of large amounts of money usually, but not exclusively, from bank accounts originating in Africa in return for a share in the recovered money.  These are scams known as "advance fee" or "419" frauds. The aim is to get a charity to hand over money, bank account details or even letterheads that can be used in further frauds.

Apart from the final example not all these circumstances automatically indicate that a crime has been or will be committed. Trustees, employees, volunteers, advisers and donors may act from the most innocent of motives. However, trustees need to alert to weaknesses in charity systems and how they make the charity vulnerable to abuse for criminal ends.

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D2 Indicators of potential problems

When we engage with charities, for instance when following up on complaints or compliance failures, examination of financial, administration and policy records may give us an indication of how the charity is run and where poor practice makes a charity vulnerable to abuse.

Examples of poor practices that may expose charities to greater risk of abuse including for criminal purposes include:

  • Trustees that are unaware of their charity's activities or delegate their decision making powers to others without proper control mechanisms to direct policies or activities, including those of subsidiary trading companies.
  • Trustee activities are dominated by one individual or small cliques.
  • Financial systems that are insufficient for the nature, frequency and level of transactions taking place .
  • Poor reporting on financial activity that fails to account for unexpected patterns of financial activity in the charity or a trading subsidiary.
  • Poor or ineffective financial controls.
  • Systems, policies and procedures that do not adequately support the charity's operations or outline responsibilities for those working for the charity.
  • Recruitment procedures for trustees or employees that are not sufficiently robust for the nature of the charity's work.
  • Insufficient control of charity property or activities carried out in the charity's name.
  • Use of unsolicited loans or acceptance of loans with unusual conditions attached to their repayment.

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Legal / Policy Framework

E1 Criminality and our jurisdiction

We always ensure that concerns about criminality are reported to the police and relevant law enforcement agencies.

The laws of a country set out which actions or omissions are criminal. These may include:

  • serious offences against the person, such as sexual assault
  • offences against the state, such as treason or tax evasion
  • wrongs perpetrated against the community
  • offences against property, such as theft or handling stolen goods 

The laws of England and Wales apply to all charities subject to the jurisdiction, whether registered or not. Sometimes actions committed by a charity as part of its overseas' activities may also result in the charity committing a criminal offence in the UK (in particular terrorism offences and offences under bribery and corruption legislation). 

In addition, breaches of another country's criminal laws by a charity are likely to raise regulatory issues in the UK (see the Compliance Toolkit: Protecting your Charity - Charities Working Internationally).

Charities that are not properly managed may be viewed as easy targets by criminals who wish to exploit them. Examples of potential fraud and financial crime are shown in our Compliance Toolkit: Protecting your Charity from harm - Chapter 3 Fraud and financial crime.

Our role as regulator and registrar of charities is to protect the public's interest in them. Through our work we identify and investigate apparent misconduct or mismanagement (link) in the administration of charities and work to resolve issues of concern. Our remit does not extend to investigating criminal activity or tax avoidance or evasion.

Not all cases of alleged criminality will be pursued by the police. Nevertheless, we may still have regulatory concerns even where the police decide not to pursue matters. The issues raised may give rise to misconduct and mismanagement by the trustees, including whether they have acted responsibly in dealing with the alleged criminality - see our casework approach set out at section B2.2.

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E2 Serious concerns and our risk framework 

Our Risk Framework sets out our approach where there are serious concerns of abuse in a charity. In the most serious cases we may investigate and open a statutory inquiry under section 46 of the Charities Act 2011. We have a range of statutory powers that we can use to stop abuse and protect charitable assets and beneficiaries, including:

  • information gathering powers which require us to obtain information or documents or require named individuals to meet us to answer questions
  • temporary protective powers which allow us to protect charity property for a temporary period while we continue investigating
  • remedial powers which allow us to implement long term solutions to problems often identified by an inquiry

We are not a prosecuting authority and the investigation of alleged criminal offences is the responsibility of law enforcement agencies. We work with other agencies, regulators and Government departments to help us pursue our objectives, or to complement their work and to avoid dual regulation. Where there is a problem within a charity that is being adequately addressed by another agency (or agencies) we will not substantively engage except insofar as we can add value, or have specific positive impact on the administration of the charity, and/ or the sector, which is outside the other agency's remit - see the decision matrix below.

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E3 Deciding whether to continue or pause our case action in the light of a police investigation

Great care is needed when dealing with cases where we know that criminal activity is suspected and being investigated. 

Decision Matrix
Police Involvement - Should we continue with our case action?
What do we want the intervention (by us and the police) to achieve? What must the Commission avoid? What action can we take? What are the criteria in making our decision? The action we take and why

Stop the criminal acts

Apprehend perpetrators and/or prevent them from acting in future 

Resolve the charity's regulatory issues that allowed criminal activity to occur in the first place

Prejudicing a police inquiry by undermining their case

Tipping off perpetrators

Finding ourselves subject to criminal charges by tipping off

A poorly focussed inquiry by us that will not allow us to address the regulatory issues

Continue with our inquiry/ regulatory action with clearly defined boundaries between the Commission and the police

Pause our inquiry/ regulatory action (Stop the Clock) following written agreement with the police, with a view to resuming our case at a particular point in the police investigation. This requires regular liaison with the police.

Close our inquiry/ regulatory action with no intention of reopening it as issues are or will be resolved as a result of police and trustee action.

Identifying the aims of our inquiry/ regulatory action:

  • protect beneficiaries
  • protect property
  • prevent people from acting
  • make the charity work properly
  • close the charity

What action do the police need to take?

To what extent can our aims be achieved if we continue with our action based also on the action to be taken by the police?

  • all aims achievable
  • aims achievable in part
  • aims cannot be achieved

Are some of our aims more important and pressing than others?

Continue our case because all the identified aims of the inquiry/ regulatory action need to be pursued immediately and can be achieved without prejudicing the police case

Continue our case because some aims need to be pursued immediately and can be achieved without prejudicing the police case

Continue with our case even where the aims need not be resolved at once but our action will not prejudice the police case

Pause our action because the police case is so serious and we could not achieve our aims (which do not need to be resolved at once) without prejudicing their action

Close our case because there is no further action for us

Simply because the police are investigating does not prevent us from acting. However, in continuing a case where the police are investigating we must agree where the boundaries lie between our case and theirs. We should be clear on what we want to achieve by our action and ensure the police are aware of this so that we do not prejudice their action.

Our action is based on the civil standards of proof, being the "balance of probabilities", not the higher standard required for criminal matters, being "beyond reasonable doubt". So, even if a person is acquitted of criminal charges of fraud or theft, regulatory charity law issues may nevertheless have occurred, for example, unauthorised trustee benefits or accounting defaults.

We should take care in reaching our conclusions before a criminal case is complete as they could prejudice a police prosecution. Anything we conclude in examining issues of misconduct or mismanagement is disclosable and could weaken a criminal case. For instance, if we say that a trustee acted in good faith or made an honest mistake, this statement could be used in defence of a criminal case.

Persons under police investigation may refuse to speak to us and we need to decide whether we can make conclusions on the evidence we have or whether we need to wait until the person becomes available. Often it may be appropriate to wait until a person has been formally interviewed by the police under PACE or has been charged with an offence. However, where the police investigate matters relating to a particular time in the past, it may not prevent us from asking trustees about the situation now; this would obviously depend on the type of alleged crime.

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E4 Other legislation

Whilst we do not prosecute on our own account we need to be aware of legislation that can be used by other authorities when criminal activity is suspected. Some legislation may place certain obligations on us or those who provide professional services to charities about the way information is handled

The Compliance Toolkit: Protecting charities from harm contains the following chapters:

Chapter 1: Charities and terrorism

Chapter 2: Due diligence, monitoring and verification of end use of funds

Chapter 3: Fraud and financial crime

Chapter 4: Holding, moving and receiving funds safely in the UK and internationally

Chapter 5. Protecting charities from abuse for extremist purposes and managing the risks at events and in activities

These chapters will highlight the legislation that applies in particular circumstances. Additionally, in Chapter 1 there is a link to External sources of further information and guidance. This contains other regulator information and details of potential criminal activity under terrorism legislation.   

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Q&A

F1 What do we mean by criminality?

This is anything set out in the laws of England and Wales as a crime. It is not our role to advise about or conclude whether a crime has been committed - that is for the police and Crown Prosecution Service. Section E1 looks criminality and our jurisdiction.

F2 What do I do if someone tells us about criminality but has not reported it to the police?

They should be advised to report their concerns to the police straight away and get a crime reference number. If the matter is so serious ( eg terrorism, immediate risk to life or major fraud) we should report the matter ourselves. See section B1.

F3 What must I do if I suspect as part of my case a criminal offence is taking place in a charity?

You must report your suspicions to the police or other relevant agencies for particular types of crime. Section B1 sets out to whom we should report and section B2 looks at how we use the intelligence function in making reports.

F4 Must I always report criminal activity to the Police?

Our policy is that suspected or detected crime must always be reported. There will be no need for us to make a report where the charity has reported the alleged crime and have a crime reference number. However, there are particular types of crime where we would report in any event. See section B1.

F5 Must I wait for a police case to be concluded before taking action?

No, but there are protocols for taking action whilst the police are investigating. Section E3 considers how we make a decision to continue or pause our case action and section B2.3 looks at what we must do where we have concurrent action with a police investigation.