Fraud by Charities Worth Millions Is Going Undetected

Article excerpt

THE GOVERNMENT'S spending watchdog has warned that failure to grant full access to the accounts of private and voluntary bodies that spend billions of pounds of taxpayers' money every year leaves the door open to fraud.

But in a Commons debate today, the Treasury will defy a demand from Sir John Bourn, head of the National Audit Office, for an automatic right to open the books of non-government bodies. Ministers have also been accused of behaving in a "constitutionally improper" way by David Davis, chairman of the powerful Public Accounts Committee.

The row will come to a head today as the National Audit Office highlights the case of the Focus Housing Association in the West Midlands where a pounds 1.6m fraud remained undetected for four years. An audit office investigation was delayed by six months because it had to negotiate the right to step in.

The problem has worsened in the past few years as a growing proportion of government funds has been spent by such organisations. These include the Housing Corporation, which spends more than pounds 1bn a year on social housing, and private contractors building hospitals and prisons, as well as a vast range of voluntary bodies that receive government grants. …