Failure to Prevent Fraud Act: Why Multi-Academy Trusts Must Act Now

ECCT 2023’s New Corporate Offence Explained 

On 1 September 2025, a significant addition to the Economic Crime and Corporate Transparency Act 2023—the corporate offence of “Failure to Prevent Fraud”—came into force. Under this law, large organisations that “profit from fraud” committed by employees, agents, or associates—even unknowingly—can face criminal liability unless they had reasonable fraud prevention procedures in place (GOV.UK). 

Though this law currently applies to large organisations, regulatory trends consistently begin with enterprise-level mandates that then ripple down to smaller and medium-sized entities—including Multi-Academy Trusts (MATs). Trusts would be wise to act now.

What the Failure to Prevent Fraud Offence Means for MATs 

Senior prosecutors have been clear: organisations must embed robust fraud prevention systems or face unlimited fines and investigations. As the Crown Prosecution Service put it, “large organisations must act to put robust fraud prevention systems in place or leave themselves open to legal action” (Wired-Gov). 

New government guidance outlines a six-principle framework for “reasonable procedures”: 

1. Top-level commitment 

1. Risk assessment 

1. Proportionate, risk-based prevention procedures 

1. Due diligence 

1. Communication and training 

1. Monitoring and review 

Even though MATs may not currently be caught by the technical thresholds, regulators, auditors, and stakeholders will increasingly expect Trusts to demonstrate alignment with these principles. 

Why MATs Can’t Wait: Compliance Trends Cascade Down 

Anti-fraud, anti-bribery, and anti-tax evasion laws show a clear pattern: what starts with large corporations quickly becomes standard practice across smaller organisations. 

For MATs, that means: 

• Scrutiny will come sooner than expected — especially as procurement and financial management span multiple schools. 

• Reputation is on the line — demonstrating proactive compliance builds trust with parents, regulators, and communities. 

• Culture change takes time — embedding cohesive, consistent policies across schools and third parties can’t be done overnight. 

Automate to Comply: How a Purchase-to-Pay System Delivers Control & Trust 

To meet compliance and cultivate a fraud-resilient culture, MATs should move quickly to implement a cross-school, fully automated purchase-to-pay (P2P) system. 

The benefits are clear: 

• End-to-end visibility and control – every supplier, invoice, and purchase order runs through one platform, ensuring oversight at every stage. 

• Guardrails against fraud and error – automated checks block unauthorised spend, duplicate payments, and non-approved suppliers. 

• Consistent supplier management – due diligence and approvals are built once, then applied across the entire Trust. 

• Cultural embedding – reinforces compliance principles by design, from leadership oversight to periodic review. 

From Policy to Practice: Embedding Anti-Fraud Culture Across Your Trust 

The “Failure to Prevent Fraud” offence isn’t just another piece of legislation—it’s a call to action. For Multi-Academy Trusts, acting swiftly by implementing an automated, Trust-wide P2P solution ensures: 

• Compliance confidence under current and future regulatory expectations 

• A cohesive, transparent spending culture across all schools 

• Robust auditability and defence-ready procedures in the event of scrutiny 

By acting now, MATs can turn compliance into an opportunity—strengthening governance, reducing risk, and building trust across their entire community.