Grant misspend, misuse and fraud
What we will do to protect our staff, beneficiaries, trustees and donors:
At Hospitality Action (HA) we always endeavour to conduct our business and grant-making activities in a legal and ethical manner and we expect the highest standards of honesty and integrity from our staff, trustees, applicants and grant recipients.
We have in place safeguards and measures to protect our grants from fraud and we reserve the right to request sufficient supporting evidence to satisfy our requirements, corroborate information and allay any concerns we have surrounding false, inconsistent or missing information. Measures and safeguards include training staff to recognise fake or fabricated documents and verifying the existence and legitimacy of organisations and individuals detailed in any application or communications.
We review each case individually and the information below sets out what action we will take in different circumstances.
What it means and what we will do:
The term ‘fraud’ is used to describe the use of deception to deprive, disadvantage or cause loss to another person or party; or secure unwarranted personal gain. This can include theft, the misuse of funds or other resources or more complicated crimes such as false accounting and the supply of false information.
Fraud is a criminal offence and has a technical definition set out in the Fraud Act 2006 (which covers England, Wales and Northern Ireland. In Scotland criminal fraud is mainly dealt with under common law). Under the Fraud Act 2006 the criminal offence of fraud can be committed in three ways:
- fraud by false representation
- fraud by failing to disclose information
- fraud by abuse of position
Individuals can be prosecuted under the Fraud Act 2006 if they make a false representation, fail to disclose information or abuse their position. However, we understand that there are circumstances where funds are misspent or misused but that do not necessarily meet this definition of fraud. Below is a description of how we differentiate these, and the resulting differences in our response.
|What we mean by misspend, misuse and fraud…||The grant is spent on something that was not awarded, without our agreement to do so. However, the item meets a clearly identifiable need for the recipient, is within our charitable purpose and at an appropriate cost, given the total grant value.||1) The grant is intentionally spent on something outside of the grant purpose and outside of our charitable purposes.
2) Or, significantly less is spent on a single item than was awarded for it and the balance is used towards other costs/items.
|There is a deliberate and dishonest attempt to apply for a grant for people who do not meet HA’s criteria.
The grant is not intended to benefit the intended beneficiary or meet the stated need.
|What action we will take…||In the event of a grant being misspent we will advise the applicant that they should always notify us of any intention to re-purpose our award and that failure to do so in future may affect access to further support.||We reserve the right to withdraw or restrict access to our support in the future. Or, the amount misused may be deducted from future support.||We will Investigate every incident of potential fraud and report to the Charity Commission cases of potential/actual fraud against HA or any other individual or organisation. Where there is sufficient evidence, we will report attempts to defraud us of money to Action Fraud, and the Police. Where appropriate, we will take steps to recover the money.|