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2005-06 Community Fund Financial Statements – follow up report on actions taken by the Fund…

Sir John Bourn, head of the National Audit Office, reported to Parliament today that he had given an unqualified opinion on the 2005-06 Community Fund’s accounts. Last year, Sir John had qualified his opinion on the 2004-05 accounts on the grounds that the Fund’s systems did not include adequate checks to identify potential fraudulent applications.

Today, Sir John reported that he had considered the controls the Fund now had in place for assessing and monitoring grant applications and reviewed whether they operated effectively in practice, in coming to his audit opinion.

The Community Fund first identified possible fraud in grant applications in September 2004. The Fund now considers that around £1 million in grants under the Awards for All programme were the subject of fraud, and intends to write this off. The Fund also considers an additional £510,000 in grants under the main grant programmes was fraudulently obtained, with another £1.6 million thought to be in breach of grant conditions. The Fund is still considering what action to take in cases where a breach of grant conditions has been identified.

The Fund has taken measures to improve fraud controls, including system alerts in response to multiple applications. Sir John today recommends further steps which can be taken, including improvements to the sampling of grants selected for a visit and better analysis of the information the Fund already collect.

"The Community Fund have made progress in improving their controls aimed at ensuring lottery money is spent on the causes for which it was intended, but there is more still to do to reduce the risk of loss through fraud. When grants are fraudulently obtained, the real losers are the voluntary and charitable groups who could have put this money to good use."

Sir John Bourn

Notes for Editors

  1. The Big Lottery fund is due to take over the role of the Community Fund, as well as the New Opportunities Fund, over the coming months.
  2. Press notices are available on the NAO website, which is at Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  3. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 64/06