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OSCR investigation leads to conviction of trustee for embezzlement

Governance | Vibeka Mair | 12 Sep 2011

A woman, who was the sole trustee of a public hall in Scotland, has been found guilty of embezzling £800 in charitable funds, after a  three-year inquiry by the Office of the Scottish Regulator (OSCR) into the Scalloway Public Hall Trust uncovered the fraud.

According to the Shetland News, the woman, Sandra Reynolds, was initially charged with embezzling over £8,000, but the charge was reduced when she appeared in court.

OSCR’s inquiry started in 2008, when a complaint was made about Scalloway Public Hall Trust and its trustees.

OSCR investigation into the charity established that one individual was in sole management and control of the charity, no meetings had been held for some time, the hall was not being cared for sufficiently, and financial procedures were grossly inadequate, including the signing of blank cheques.

During the inquiries OSCR also found evidence that charitable funds had been misappropriated. It prepared and submitted a report to the Crown Office and Procurator Fiscal Service and criminal proceedings were initiated.

In July, the sole trustee, Sandra Reynolds appeared at Lerwick Sheriff Court and admitted defrauding the local hall between 2009 and 2010 after all her fellow trustees had resigned.

Shetland News reported that procurator fiscal Duncan Mackenzie said Reynolds had treated the hall like “her own personal fiefdom” and the rest of the trustees left as they could not work with her.

He added that a lack of financial controls gave Reynolds the opportunity to take money from the charity to pay her own bills, and it was only when OSCR investigated that the fraud was discovered.

However, Reynolds' defence lawyer Tommy Allen said his client had tried to keep the hall going alone when everyone had left and had been overwhelmed. She had paid back £200 and had brought the remaining £600 to court.

Sheriff Graeme Napier fined Reynolds £500 and ordered her to pay over the £600 in compensation.

He said that while she probably felt she should never have been left in sole charge of the hall, what she had done amounted to “a significant breach of trust”.

An OSCR spokesman said that Scalloway Public Hall Trust now has a management committee in place.

He added that OSCR had considered whether to take court action to ban Reynolds from acting as a charity trustee in the future.

However, it decided that the cost of further action would outweigh the benefit to the public since Reynolds is banned from acting as at trustee, by virtue of her criminal conviction, for a period of five years under the Charities and Trustee Investment Act 2005.

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Directory: Office of the Scottish Charity Regulator (OSCR)