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Trustees defend practices after manager steals £150,000

Finance | Gareth Jones | 19 Feb 2008

Dorset Scope has defended its financial practices after a former finance manager admitted stealing £150,000 from the charity.

John Cunningham faces prison after he abused his role by creating false invoices from suppliers, meaning he didn’t have to spend any of his own salary.

In a statement, Paul Barnard, chief executive of the Poole-based cerebral palsy charity, stressed that on discovery of the fraud, the trustees had taken “swift action” to ensure robust financial procedures “continue” to operate.

He added that forensic accountants and new auditors had been brought in and that their advice had been acted upon.

Dorset Scope’s trustees have also initiated litigation proceedings in an attempt to recover the lost funds.

Cunningham initiated the deception just three months after taking up the post, continuing the practice for three years before handing himself in to police in January last year.

Among the items he purchased with charity funds were a £28,000 Lotus Elise convertible, a Lexus saloon and a Mitsubishi pick-up truck.  He also bought a BMW and Harley Davidson Fat Boy motorbike and paid for flying lessons.

Judge Christopher Harvey Clark QC told Bournemouth Crown Court that either the charity’s auditing procedures were “somewhat inadequate” or Cunningham was acting in a “particularly devious way”.

Granting Cunningham bail, the judge added: “You pleaded guilty to the theft of £150,000 from a charity. You know as well as I know that the only sentence that the court can pass in respect of such an offence is one of custody."

He is still awaiting sentence.

Cunningham is likely to face confiscation proceedings after his assets were frozen.

Ernese Skinner, policy and campaigns manager at the Charity Finance Directors' Group, told Charity News Alert that charities must always be vigilant.

"No-one is immune to fraud; charities should check they have appropriate HR and financial controls in place. This will differ depending on the size of the organisation.

"Auditors should encourage charities to implement internal controls that are in keeping with the scale of operations.

"For recruitment purposes the qualifications, selection and necessary training as well as the innate personal characteristics are important features to be considered."

She also advised the segregation of duties could help protect against one individual having sole responsibility for recording and processing transactions.

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