In our recent green lights ahead report we discussed the need for the charity sector to introduce further counter-fraud measures to protect against external and internal threats. 61 per cent of charities report that they have not fallen victim to fraud. However, it is important to differentiate between awareness of fraudulent activity and actual exposure. Often charities will not have the proper assurance processes in place to get a full picture on whether fraud is occurring in their organisation.
While internal audit teams are a useful tool, charities should carry out a fraud and resilience risk assessment if they are to fully appreciate their fraud landscape. This helps the charity understand its risk profile and guide action to tackle threats. While mitigation measures should protect against external threats, such as procurement chain fraud, false invoicing and misuse of grant monies, charities should also recognise that a significant proportion of fraud is internally initiated. Cases of individual employees diverting funds, stealing cash and setting up false suppliers regularly hit headlines.
For advice on how to tackle specific types of fraud in charities, read more:
- Cyber fraud risks for charities
- Fraudulent cash handling in charities
- Fraud and recruitment of charity volunteers
- Internal fraud risks
To help you assess the effectiveness of your current processes we have developed a charity fraud and bribery resilience review. Complete the form below for a member of our counter-fraud specialists to discuss this with you in more detail.