Misuse of Funds and Fraud Protection Policy

Walsall Community Active Projects CIC

Company number 17051741

Misuse of Funds and Fraud Protection Policy

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1. Statement of Intent

Walsall Community Active Projects CIC has a zero-tolerance approach to fraud, bribery, theft and misuse of funds. We will take all reasonable steps to prevent wrongdoing, detect it quickly if it happens and respond firmly when it does.

This policy supports our Financial Controls Policy, Conflict of Interest Policy and Whistleblowing Policy.

2. Definitions

• Fraud: dishonestly making a false representation, failing to disclose information or abusing a position of trust, to make a gain or cause a loss.
• Theft: dishonestly taking something belonging to another with the intention of permanently depriving them of it.
• Bribery: offering, giving, requesting or receiving something of value to influence a decision.
• Misuse of funds: spending money for a purpose other than the one for which it was given, including restricted grant funds.
• Money laundering: concealing the origin of money obtained from criminal activity.

3. Legal Framework

We comply with:

• The Fraud Act 2006
• The Theft Act 1968
• The Bribery Act 2010
• The Proceeds of Crime Act 2002
• Money Laundering Regulations 2017 (as amended)
• Companies Act 2006 and CIC regulations

4. Our Approach

We will:

• Set clear financial controls (see Financial Controls Policy)
• Train staff, volunteers and trustees to recognise risks
• Promote a culture where people feel able to raise concerns
• Investigate any concerns promptly and fairly
• Report serious matters to the police, funders and regulators as required

5. Common Risks

Risks we are alert to include:

• Internal fraud: false invoices, fake expense claims, misuse of company cards, payroll fraud.
• Procurement fraud: fake suppliers, kickbacks, or paying inflated prices in return for personal benefit.
• Grant fraud: false claims for funding, misuse of restricted funds, or overclaiming for activity that did not happen.
• External fraud: scam emails, fake invoices from external parties, payment diversion fraud, phishing.
• CEO and impersonation fraud: criminals pretending to be senior staff to authorise urgent payments.
• Cash handling: skimming cash takings or under-recording income.
• Charity and CIC scams: fraudsters approaching us pretending to be funders or beneficiaries.

6. Preventing Fraud

Our key prevention measures include:

• Segregation of duties wherever possible
• Two-person authorisation for payments above £500
• Regular bank reconciliations
• Independent examination of annual accounts
• Robust recruitment and DBS checks
• Training in fraud awareness
• Clear procedures for handling cash, cards and online payments
• Up-to-date cyber security measures
• Verification of supplier bank details directly with the supplier before payment
• Always being suspicious of urgent or unusual payment requests, even from senior people

7. Restricted Funds

Grant funds given for a specific purpose are particularly sensitive. We will:

• Record restricted funds separately in our accounts
• Spend them only on the agreed purpose
• Provide accurate reports to funders
• Return underspends or unused funds where required
• Never move restricted funds into general use without the funder's written consent

8. Bribery and Hospitality

We will:

• Not offer or accept bribes, in any form
• Decline gifts or hospitality that could influence our decisions, in line with our Conflict of Interest Policy
• Record any gifts or hospitality above a nominal value (£25)
• Avoid arrangements where private benefit could be confused with organisational benefit

9. Money Laundering

We will:

• Carry out reasonable checks on the source of large or unusual donations
• Not accept cash donations over £1,000 without making and keeping a record of the donor
• Report any suspicions of money laundering to the National Crime Agency through the Founder

10. Reporting Concerns

Anyone who suspects fraud, theft, bribery or misuse of funds must report it immediately to the Founder or, where the concern involves the Founder, to the Chair or another Director. They can also use our Whistleblowing Policy.

Anyone raising a concern in good faith will be protected from any form of retaliation.

11. Investigating Concerns

Concerns will be:

• Acknowledged within 5 working days
• Reviewed by a senior person not involved in the alleged matter
• Investigated fairly and confidentially
• Documented in writing throughout

Where appropriate, the person under investigation may be suspended from duties pending the outcome. Suspension is not a disciplinary action and does not imply guilt.

12. Outcomes

Depending on the findings, we may:

• Take no further action where no wrongdoing is found
• Strengthen controls or training
• Take disciplinary action up to and including dismissal
• Remove a volunteer or trustee from their role
• Refer the matter to the police, the CIC Regulator, HMRC or other authority
• Recover funds through civil action
• Notify funders, where misuse of grant funds has occurred

13. Reporting to External Bodies

We will report:

• Suspected criminal offences to Action Fraud (0300 123 2040) and, where appropriate, the police
• Significant incidents to the CIC Regulator
• Misuse of restricted funds to the relevant funder
• Suspected money laundering to the National Crime Agency
• Data breaches arising from fraud to the Information Commissioner's Office

14. Records

Records of all concerns and investigations will be kept securely for at least 6 years, longer for serious matters, in line with our Data Protection Policy.

15. Training and Awareness

All staff, volunteers and trustees receive fraud awareness training as part of induction, with refreshers every two years. Those with financial responsibilities receive more detailed training.

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Policy Review

This policy was adopted on 14 February 2026 and will be reviewed annually, with the next scheduled review in February 2027. It will also be reviewed earlier if there are significant changes in legislation, guidance, or our activities.

All staff, volunteers and trustees will be made aware of any updates and asked to confirm they have read and understood the revised version.

Signed on behalf of the Board