Regulators across the charity sector are becoming increasingly assertive. Recent cases highlight weaknesses in oversight, financial control, and trustee accountability. For many boards, these developments are a timely reminder that good governance is not just about compliance – it’s about protecting purpose, people, and public trust.
In this blog, we share lessons from recent enforcement and advisory cases, offering practical guidance for charities.
- Strengthening financial oversight
The case of Cardiff Sixth Form College shows that even well-known, high-performing organisations can face serious governance challenges. Allegations of theft and false accounting – amounting to several million pounds – revealed weaknesses in oversight, conflicts of interest, and basic financial controls.
Key takeaway:
Sound financial governance relies on structure, not success. Trustees and senior leaders should ensure that financial processes are transparent, responsibilities are clearly delegated, and all key decisions are properly documented.
Charities should consider:
- Establishing clear approval pathways for significant transactions
- Regularly reviewing related-party relationships
- Preparing and filing statutory accounts in a timely manner
- Implementing internal audit processes to make financial activity visible and verifiable
These measures protect not only funds but also the integrity of the charity’s mission.
- Ensuring trustee understanding and accountability
A Scottish case involving Dudgeon Park Community Centre highlighted the risks of weak board governance. Trustees were found to have acted outside their charitable purpose and failed to maintain adequate records – with some individuals unaware they were even acting as trustees.
Key takeaway:
Governance begins with understanding. Trustees are ultimately responsible for compliance, reporting, and the ethical use of funds. Without proper induction and training, even well-intentioned boards can drift into regulatory difficulty.
Charities should consider:
- Providing trustee training and induction programs
- Conducting governance reviews to clarify statutory duties and financial responsibilities
- Ensuring boards align decision-making with both the charity’s values and mission
A well-informed board is a confident, accountable board.
- Maintaining compliance in a complex regulatory environment
Recently, three small charities were named by the Office of Financial Sanctions Implementation (OFSI) for failing to respond to regulatory correspondence. No fines were issued, but public naming alone caused reputational harm.
Key takeaway:
Regulatory compliance is an active process. Charities must maintain accurate contact details, monitor official updates, and respond promptly to oversight bodies.
Charities should consider:
- Developing compliance calendars to track regulatory requirements
- Assigning responsibility for monitoring and responding to official communications
- Ensuring small administrative lapses are identified and addressed before they escalate
Proactive compliance is far less costly than correcting errors after the fact.
- Protecting fundraising integrity and reputation
Regulators have issued warnings over fraudulent communications and misleading fundraising practices, particularly among some Community Interest Companies. These incidents underline the reputational risks when public trust is eroded.
Key takeaway:
Charities must actively oversee all fundraising activities, especially when outsourced. Transparency, verification, and adherence to the Code of Fundraising Practice are essential.
Charities should consider:
- Reviewing fundraising governance frameworks regularly
- Monitoring third-party fundraising providers
- Establishing clear internal reporting channels
- Providing staff and volunteers with training to identify and report fraudulent activity
Strong oversight ensures that fundraising activities protect, rather than jeopardise, public trust.
Building confidence through better governance
Across these cases, one message is clear: strong governance and financial stewardship are non-negotiable. Regulators now expect charities to demonstrate not only compliance but also proactive risk management and ethical leadership.
Charities should consider:
- Strengthening internal controls
- Reviewing obligations and responsibilities regularly
- Creating a culture of transparency and accountability
Whether reviewing governance structures, preparing for an audit, or enhancing trustee confidence, strong governance protects more than your charity’s finances – it safeguards its purpose.
Get in touch
If you’d like to discuss how your charity can strengthen its governance, financial oversight, and readiness for audit, get in touch with charity specialist, and PM+M partner, Ceri Dixon, by clicking the button below.
