Due diligence

Principles

Charity's funds and assets are only used in the furtherance of the charity's purposes and the Charity must avoid undertaking activities that might place the charity's funds, assets or reputation at undue risk.
Ensure all activities comply within the law and act in the best interests of the charity
Comply with the legal principles of duty of care and duty of prudence and maintain control of charitable funds
Ensure that the charity's funds are used properly, lawfully and in furtherance of the charity's purposes
Avoid undertaking activities that might place the charity's funds, assets, or reputation at undue risk.
Through a risk-based approach ensure a realistic and reasonable risk management strategy to identify and mitigate significant risks to the charity's funds and assets.
Exercise reasonable care over the selection, use, monitoring and conduct proper due diligence of the Charity's partners and beneficiaries
The use of charity money or property for unlawful purposes cannot in any circumstances be regarded as a proper use, and as well as being in breach of law, it is not acceptable for the Charity to carry out activities that are unlawful.

What is included

Due diligence are the practical steps needed to be assured of the provenance of charitable funds and confident that the people and organisations the Charity works with, and able to identify and manage associated risks.

'Due diligence' is essential in safeguarding Charity assets and means carrying out reasonable checks on those individuals, including partners and others that are contracted to work with it. There are three main areas due diligence will assess:

The beneficiaries of any Charity disbursed funds
The suppliers of services to the Charity
The members of the Charity

There are no formal controls to monitor donors as the maximum amount any single donor is able to donate is very low.

Intrinsically, the key areas of the due diligence assessment include:

operational procedures, controls and systems.
Financial controls
Risk to the reputation of the Charity
External risks
Compliance with the law and regulations
Suitability of appointment

Due diligence assessments

Monitoring of beneficiaries

Where the Charity gives money to partners and beneficiaries the Charity takes appropriate steps to verify that Charity funds reach the proper destinations and are used for the purposes which the Charity intended.

Due diligence involves judging the quality and completeness of initial information obtained and then deciding whether further checks or enquiries are necessary.

Those partner organisations' credentials, processes and systems are evaluated with best efforts to confirm the identity, credentials, and good standing of all beneficiaries.

	Direct evidence	Evidenced through observation	Comments
Describe how and for what purpose the donations will be disbursed
Percentage of donations disbursed for charitable purposes
Percentage of donations disbursed for charitable operations
Percentage of donations disbursed not used for charitable purposes or operation of the charity
Provide conflicts-of-interest policy and accompanying reporting policies
Provide vulnerable individuals policy including the support for Ensuring the safety of the ultimate recipients of the Charity Ensuring the safety of those delivering the charitable services
Provide details of the policy and procedures or practices in place to ensure compliance with the following laws: Money Laundering Terrorism financing Sexual offences against children Slavery and slavery-like conditions Trafficking in individuals and debt bondage People smuggling International sanctions Taxation Bribery

Direct evidence: where the beneficiary has provided evidence directly related to the due diligence question

Evidence through observation: where there is documentation available (reports, policies, etc.) confirming the nature of the beneficiaries’ processes and/or controls.

All due diligence evidence of partners and beneficiaries will be recorded and assessed by the members of the Charity. Only when two-thirds of the members agree that the partners or beneficiaries are suiable will they be approved.

Monitoring members of the charity

All members of the Charity must meet the following criteria on an ongoing basis and provide annual attestations that their status is still valid.

Over 18 years of age
Have no criminal record
Have never been discharged bankrupt
Is not on the ASIC banned and disqualified register
Agrees to abide by the constitution of the Charity including:
- The constitution
- The privacy policy
- The conflicts of interest policy
- All the laws stated in the applicable laws register
When engaged in the duties of the Charity follow the agreed processes, procedures, controls, and systems

The sample form is as follows:

Name		Date of membership
Date of Birth		Position
Address line 1		Appear on the ASIC banned or disqualified register (YES/NO)
Address line 2		Criminal record (YES/NO)
Address suburb		Agree to adhere to all policies of the ‘Flag of Ukraine’
Address state		Agree to adhere to all policies of the ‘Flag of Ukraine’
Country		Agree to adhere to all the laws stated in the applicable laws register of the ‘Flag of Ukraine’
Telephone number		Agree to adhere to all the agreed processes, procedures, controls, and systems of the ‘Flag of Ukraine’
Email address

Monitoring of suppliers of services to the Charity

There are minimal suppliers of service to the charity and therefore no formal due diligence is required other than the management of expenditure through the expenditure policy.