Mosaic LGBT+ Young Persons’ Trust, Charity Number 1166676

 

Policy Owner: FRG Committee

Review Cycle: 48 months or sooner if legislation/guidance changes

Next Review Date:  May 2028 (Updated and re-approved May 2024)

 

M Mindful

O Open

S Safe

A Agile

I Inclusive

C Community

Summary

 

This policy lays out how Mosaic LGBT+ Young Persons’ Trust handles fraud.

 

We also have a “Whistleblowing” policy that encourages all users of our services and the public to report any misconduct, law-breaking or failure to act by any of Mosaic’s staff or volunteers. 

 

You can always contact trustees directly if you have concerns or complaints or wish to “blow the whistle” on something that is going on, and we will help you deal with your concerns.

 

You can contact any of the trustees below:-

 

• Ken is the Chair of Mosaic’s board of trustees:   Ken.Batty@mosaictrust.org.uk
• Madi is the Vice Chair:  Madison.Pollard@mosaictrust.org.uk
• Jo chairs our Finance committee:  jo.wittams@mosaictrust.org.uk

 

1. Introduction

 

This statement aims to provide Mosaic’s policy on fraud, corruption and bribery and set out our responsibilities for its prevention. It also stipulates Mosaic’s commitment to prevent, detect, investigate and report fraud, corruption and bribery. Finally, it refers to the Fraud Response Plan, which outlines the actions to be taken if you discover or suspect fraud.

 

Mosaic’s Attitude to Fraud (including corruption and bribery)

 

• Like all organisations, fraud is an ever-present risk to Mosaic and, hence, must be a concern for all staff members, volunteers, and trustees. 
• Mosaic places utmost importance on good stewardship of resources and thus expects staff and volunteers to act honestly and with integrity and safeguard the resources for which they are responsible.
• Mosaic is committed to developing an anti-fraud culture and to keeping the opportunities for fraud, bribery and corruption to the absolute minimum. We will assess the risks of fraud, bribery and corruption, establish processes and controls to minimise these risks, and regularly review our control systems' effectiveness.
• Mosaic takes the most serious view of any attempt to commit against us.   We will take all fraud, bribery and corruption reports seriously and investigate them proportionately and appropriately.
• Where incidents occur, Mosaic is committed to transparency and compliance in reporting such incidents to management and trustees, donors and regulatory bodies as appropriate/required.
• Staff involved in impropriety will be subject to disciplinary and/or legal action, including prosecution, if appropriate. Mosaic treats attempted fraud as seriously as accomplished fraud.

 

2. Definitions and applicable laws

 

Definitions

 

Fraud is knowingly making an untrue or misleading representation with the intention of making a gain for oneself or another or causing a loss, or risk of loss, to another. 

 

The term fraud is often used to describe a wide range of activities, including deception, forgery, extortion, theft, conspiracy, embezzlement, misappropriation, false representation, concealment of material facts, and collusion. Broadly, fraud falls into three categories: false representation, failing to disclose information, and abusing a position of trust.

 

Other categories of fraud:

 

• Opportunistic fraud occurs when there is a lack of control or a culture where low-level fraud is ignored. This increases the opportunity for fraud to go undetected and provides the perpetrator with an easy target. 
• Organised crime is more often perpetrated by parties external to the organisation. These parties have a clear criminal intent and may work through a network to carry out fraud against several organisations. 
• Much fraud is ‘insider-enabled​​’, where the opportunity for fraud arises because someone connected with the charity is given access to the charity’s assets and systems or uses their ability to influence outcomes and decisions for their personal benefit. ‘Insiders will not only be employees and trustees but also include volunteers, who may form a significant workforce for many charities, together with consultants and other contractors. 
• ‘Externally enabled’ fraud may be harder to detect and is certainly more likely to be perpetrated with little advance warning, so it is important to consider where the potential target areas for your charity are likely to be. 
• Banking fraud: such as cheques being intercepted in the post and diverted to another fraudulent bank account; counterfeit cheques being presented with false signatures; or an external fraudster setting up standing order payments to his/her own bank account
• Identity theft: an increasingly common example of this is where a trader improperly uses a charity’s name to acquire donated goods through house collections which the trader then sells for personal gain 
• Cyber fraud: examples include computer viruses and hacking; malware; fake website and email scams; and phishing where the intention is to steal personal or financial data for fraudulent use
• Bribery is an offer or receipt of a financial or other advantage to encourage that person to perform their functions or activities improperly and dishonestly, in breach of trust in the conduct of the organisation’s business. A facilitation payment is a type of bribe. An example is an unofficial payment or other advantage given to a public official to undertake or speed up the performance of their normal duties. 
• Corruption is the misuse of entrusted power for personal gain. This would include dishonest or fraudulent behaviour by those in positions of power, such as managers or government officials. It would include offering, giving and receiving bribes to influence the actions of someone in a position of power or influence (e.g. in a procurement process), and the diversion of funds for private gain. Bribery can take many forms, from a straightforward request for payment in cash, a request for a favour or in-kind or ‘help’ such as an unusually large gift, or entertainment or hospitality. 
• Mosaic does not prohibit normal and appropriate hospitality, giving or receiving of a ceremonial gift or award. Any gift (including hospitality) higher than 25 GBP received because of a person’s association with Mosaic needs to be declared to the Chair of the Board or the Chair of the Finance, Risk and Governance sub-committee.
• A conflict of interest is where an individual has private interests that may or actually do influence the decisions that they make as an employee or representative of an organisation.  

 

Applicable laws

 

As a UK registered charity we undertake to comply with UK law relevant to countering fraud including Charity Law, the Fraud Act 2006 and the Bribery Act 2010. 

 

Trustees are required under charity law to safeguard the assets of the charity.

 

3. Internal control systems and responsibilities

 

a) Preventing fraud:

 

• Mosaic will seek to put in place efficient and effective systems, procedures and internal controls to encourage an anti-fraud culture, prevent and detect fraud, bribery and corruption. These are specified in the Financial Controls and Financial Approvals policies. 
• Mosaic requires all staff, volunteers and trustees to immediately report any incidents or suspicions of fraud, bribery or corruption to an appropriate manager or another person named below. Mosaic will support and not penalise anyone for raising a concern in good faith.
• All individuals who work for and with Mosaic, including volunteers and trustees, should understand their role, have adequate training to carry this out effectively and have proper channels for reporting and review of work undertaken. The Charity Commission recommends a series of online trainings on fraud and fraud related issues provided by the Fraud Advisory panel; these can be found here, including Insider fraud, Identity fraud, Fundraising fraud and Bribery and corruption.
• Mosaic will make all those receiving funds, including its suppliers, partners and contractors aware of this policy.

 

b) Responsibilities:

 

Trustees: 

 

• Trustees are responsible for establishing and maintaining a sound system of internal control that supports the achievement of Mosaic’s aims and objectives, while preventing and dealing with the risk of fraud (including corruption and bribery) - through the implementation of this policy.
• Should ensure that appropriate mechanisms for reporting fraud risk issues and suspicion or incidents of fraud or attempted fraud are established.
• Bring external support and expertise related to fraud management and investigation as needed.
• Take appropriate disciplinary and/or legal action against perpetrators of fraud.
• The Chair of the Board or Chair of the FRG sub-committee manage, alongside the Executive Director if appropriate, any investigations in the case that fraud, corruption or bribery occurs. 
• The Chair of the Board or Chair of the FRG sub-committee reports any serious incidents related to fraud, corruption or bribery to the Charity Commission and other relevant authorities.
• The Chair of the Board or Chair of the FRG sub-committee, alongside the Executive Director if appropriate, ensure that all actions while managing a (suspected) case are appropriately recorded internally (see 4.a.v below). 

 

The Executive Director:

 

• Has the overall responsibility for managing the day-to-day risk of fraud. 
• Prevents and detects fraud as far as possible.
• Ensures that agreed procedures are followed.
• Undertakes a regular review of the fraud risks associated with each of the key organisational objectives.
• Makes sure that all staff and volunteers are aware of the Charity’s Anti-Fraud Policy and know what their responsibilities are in relation to fraud.
• Ensures that appropriate anti-fraud training is made available to staff and volunteers as part of their induction and when required.
• Takes, alongside the Chair of the Board or Chair of the FRG sub-committee, appropriate disciplinary and/or legal action against perpetrators of fraud.
• Reports any fraud suspicion or incident to the Chair of the Board or Chair of the FRG sub-committee.
• Manages, alongside the Chair of the Board or Chair of the FRG sub-committee, any investigations in the case that fraud occurs.
• Staff and volunteers
• Have a duty to ensure that public funds, Mosaic’s reputation and its assets are safeguarded, when they are handling funds whether they are involved with cash, receipts, payments or dealing with suppliers.
• Should be alert to the possibility that unusual events or transactions could be indicators of fraud.
• Should alert their line manager where they believe the opportunity for fraud exists because of poor procedures or lack of effective oversight.
• Has a responsibility to report details of (a) any suspected or actual fraud, or (b) any suspicious acts or events, to their line manager, Chair of the Board or Chair of the FRG sub-committee.
• Assist in any investigations by making available all relevant information and by co-operating in interviews.

 

4. Reporting suspicions 

 

a) Reporting – internal

 

All staff must immediately report any suspected or actual instances of fraud, bribery or corruption. This includes offers to pay bribes, solicitation of bribes and demands to make facilitation payments. Failure to report could result in disciplinary action. 

Reports should be made to an appropriate manager or to the Chair of the Board or Chair of the FRG sub-committee, as appropriate. All cases will be treated with discretion and confidentiality (see section 4.c.)

Mosaic also requires all those receiving funds, including its suppliers, partners and contractors to report any suspected or actual instances of fraud, bribery or corruption involving Mosaic’s assets or staff.

Mosaic will support and not penalise anyone for raising a concern in good faith, even if it turns out to be unfounded. Any member of staff, volunteer or trustee who harasses or victimises someone for raising a concern in good faith will themselves be subject to disciplinary action.

Mosaic will maintain a system for recording: all reports (even anonymous) of actual or suspected fraud, bribery and corruption; the action taken; and the outcome of any investigation. It will use this information to inform its review of the risks and the effectiveness of its controls.

 

b) Reporting – external

 

• Mosaic will fully meet its obligations to report fraud, bribery and corruption to third parties. 
• Mosaic, as all charities with an income over £25,000 must report serious incidents to the Charity Commission. Please see guidance here.
• Mosaic will also inform Action Fraud as needed.
• In a case of fraud that results in loss of funds, Mosaic will report to all relevant donors according to the grant or donation agreement conditions.
• Please see Section 5. Fraud Response Plan for more details. 
• Whistleblower protection
• Mosaic recognises that the decision to make an allegation can be a difficult one to make. If you suspect fraud, corruption or bribery based on a reasonable belief, reporting this suspicion is for the benefit of Mosaic and the young LGBT+ persons and community Mosaic supports. 
• Mosaic will take appropriate action to protect and support a whistleblower who makes a serious allegation in the reasonable belief that it is in the public interest to do so from any reprisals, harassment or victimisation. 
• All allegations will be treated in confidence and every effort will be made not to reveal a whistleblower’s identity unless the whistleblower otherwise requests. 
• There are cases, such as disciplinary procedures or court proceedings that the whistleblower may have to give evidence in open court. 
• Mosaic will not, without the whistleblower’s consent, disclose the identity of a whistleblower to anyone other than a person involved in conducting the investigation.
• This policy encourages whistleblowers to put their name to a report when they have concerns, as anonymous allegations may be more difficult to substantiate/prove. However, if the whistleblower needs to decide between reporting a concern anonymously or not reporting it at all, they are encouraged to do so even anonymously using the Reporting concerns online form. 
• In case of an anonymous fraud report, the Executive Director, Chair of the Board or Chair of the FRG sub-committee will take into account the seriousness of the issue raised, the credibility of the allegation and the feasibility of investigating the allegation and decide further action. 
• No disciplinary or other action will be taken against a whistleblower who makes an allegation in the reasonable belief that it is in the public interest to do so even if the allegation is not substantiated by an investigation.
• Disciplinary action may be taken against a whistleblower who makes an allegation without reasonable belief that it is in the public interest to do so (e.g. making an allegation maliciously or for personal gain where there is no element of public interest). 
• Mosaic will take steps to minimise any difficulties which may be experienced as a result of making an allegation. For instance, if a whistleblower is required to give evidence in criminal or disciplinary proceedings Mosaic will arrange for them to receive advice about the procedure and advise on the support mechanisms that are available.
• Mosaic accepts that whistleblowers need to be assured that the matter has been properly addressed. Thus, subject to legal constraints, we will inform those making allegations of the outcome of any investigation. 

 

5. Fraud Response Plan 

 

General

 

• Mosaic will take all reports of actual or suspected fraud, bribery and corruption seriously, and investigate proportionately and appropriately. 
• The Fraud Response Plan sets out responsibilities for investigating fraud, bribery and corruption, the procedures for investigating and actions to be taken. 
• Mosaic will always seek to take disciplinary and/or legal action against those found to have perpetrated or assisted with fraudulent or other improper activities in any of its operations. For staff, this may include dismissal. It will also seek to recover any assets lost through fraud.

 

Response plan

 

• When someone is alerted to a potential incident of fraud, they should report it, irrespective of value or scale, immediately to the Executive Director, Chair of the Board or Chair of the FRG Sub-committee, who will record the incident and assess whether any further action or an investigation is required.
• The Chair of the Board or Chair of the FRG Sub-committee, in consultation with the Executive Director, will evaluate and assess the reported incident. They will advise on and coordinate an appropriate and proportional course of action. If deemed necessary, they will commission the services of external expert support and advice, including legal.
• The Executive Director, Chair of the Board or Chair of the FRG Sub-committee will draft the case investigation plan. They will then implement the investigation based on the plan and with necessary external support. 
• The Chair of the Board or Chair of the FRG Sub-committee will ensure that all necessary reporting to authorities takes place within the required timeframe. This includes updates to the reported case as investigation brings new evidence and actions are taken.
• The police may need to be involved in any criminal investigation. If so, they are to be involved at the outset of the investigation. The Executive Director, in consultation with the Chair of the Board and Chair of the FRG Sub-committee will agree whether police action is required. 
• Evidence must be carefully preserved, it should not be handled and no marks made on any original documents.
• Fraud investigators are likely to use specialist forensic software to secure electronic records and files. Members of Mosaic’s  IT support staff or external IT support may be informed and involved as required in order to assist in securing electronic evidence, while maintaining Mosaic’s core services.
• Mosaic will take all necessary and proportionate measures to recover any funds and/or assets lost. This may be through voluntary repayment, civil or criminal courts as appropriate, based on legal advice.
• Fraud, corruption or bribery is considered a gross misconduct by Mosaic and therefore will be grounds for dismissal or termination of contract, in addition to any legal action.
• Any open fraud case must be investigated and closed once the investigation is concluded. All cases' basic information should be kept on record and the number and status of fraud cases should be included into the annual internal report to the Board of Trustees and the Charity Commission.
• When fraud or loss can be attributed wholly or in part to a weakness or breakdown in Mosaic’s processes and procedures, the FRG sub-committee will ensure that improvements in systems are implemented without delay in order to prevent recurrence.  

 

6. Rights of persons involved in the investigation

 

• Mosaic is seeking to establish a culture that encourages the challenge of inappropriate behaviours at all levels. 
• Genuine whistle-blowers are protected by law.
• Mosaic will not tolerate the harassment or victimisation of a genuine whistle-blower and will treat such conduct as gross misconduct which may, if proven, result in dismissal.
• Members of Mosaic staff will be required to cooperate fully with any investigation.
• Mosaic will work within its disciplinary procedure and comply with employment law and related acts (including the Human Rights Act and the Policy and Criminal Evidence Act (PACE)).
• Potential suspects and interviewees will be advised of their rights, which include the right to be represented.