Scouts call in police to probe fraud that’s cost them £70,000
SCOTLAND’s Scouts have called in the police to investigate a large-scale fraud that has cost them more than £70,000.
Police Scotland and the Office of the Scottish Charity Regulator were called in after cash was found to be missing from head office funds.
An investigation, with outside experts, has begun into the finances of the Dunfermlinebased charity Scouts Scotland after the discovery of what the chief executive described as ‘fraudulent and unauthorised expenditure’.
The investigation comes only months after the Scouts were criticised for hiring an adviser who had been declared bankrupt and who is currently facing a string of fraud charges in England.
The country’s largest volunteer-led organisation, with almost 40,000 youngsters attending weekly, has taken the unprecedented step of warning all members of the shortfall.
The body, whose annual income fell by almost 10 per cent last year to £2.7 million, is battling to recover the missing money.
The full extent of the fraud will be disclosed to an Annual General Meeting later this month at the Scottish Police College in Kincardine.
Katie Docherty, chief executive of Scouts Scotland, wrote to the near12,000 adult volunteers, saying: ‘I want to bring to your attention to the annual accounts.
‘It relates to our internal financial systems and controls being overridden, which resulted in fraudulent and unauthorised expenditure over the last year.
‘The charity faced unexpected expenditure of £48,142 and an additional £22,250, required for the resulting professional costs.
‘This matter was reported to Police Scotland and the Office of the Scottish Charity Regulator as soon as it was discovered.’
She added: ‘In addition to the normal audit of our annual accounts, our leadership team carried out an in-depth financial investigation.
‘We engaged our new auditors to carry out agreed procedures on financial activity over the financial year 2017-18 and we are now confident that we have identified all potentially fraudulent or unauthorised expenditure.
‘We are working with our insurers and we hope to be able to recover at least some of the lost funds.’
The 108-year-old organisation had been enjoying one of its best decades and the board’s statement to the AGM spoke of celebrating ‘our 12th year of growth, and [we] now have 51,371 members in Scotland.
‘That’s 11,946 adult volunteers supporting 39,425 youth members to develop skills for life.
‘We’re really proud that the youth membership in Scotland has again grown faster than the rest of the UK, and all of our eight regions increased membership. We have introduced Scouting to some of the most deprived communities and offer more flexibility for both our young people and adults.’
The accounts show income in 2018 was down to £2,778,080 from £3,078,741 in 2017. The accounts contain one exceptional item, noting: ‘During the year, and in the two months following the balance sheet date, internal financial systems and controls were over-ridden.’
The report concludes: ‘Operational controls are now operating as designed. The board has also committed to a comprehensive review of internal financial controls.’
An Office of the Scottish Charity Regulator spokesman said ‘The charity have made us aware of the issues and we continue to engage with them on this matter’.
A police spokesman said: We are investigating a report of fraud at a charitable organisation based within Fife and inquiries continue.’
‘Financial systems were over-ridden’