Conne, there will inevitably be some expenses - and with any charity event, all of us find that there are complimentary tickets given, to local dignitaries or big names in the charity - the free tickets are given with the aim of promoting the profile of the charity. You can also expect some legitimate expenses in the admin of an event like this - although there are volunteers, a great many other people who work for charities are paid on the payroll. One of these has been me in the past, I was a paid employee of a registered UK charity.
What I don't understand is what you mean. Your nephew raised £17K for the charity with the various events, and gave it to the charity. Did he specify what they should do with it, are you saying they can only tell him what they did with £14K? if so the other £3K will very likely have gone into overheads. How does he know that someone/several people have stolen the money?
It need investigating with a letter to the Chief Exec of the charity, for a start. I'm not sure if the Charity Commissioners cover where you live, but there will be something similar. If he's sure of his facts he could tell the newspapers, but he'd need to be very sure. I'm very concerned that you have named the charity, when there seems to be no proof that the money has been trousered by the charity workers.