Fraudulent cash handling in charities

25 October 2016

Charities typically handle large volumes of cash, from cash transactions in stores, to cash collections from fund raising or collections. Fraudulent activity, or theft, of this cash therefore has a significant impact on them, both from a financial and reputational standpoint. 

By having robust measures in place, charities can mitigate the risk of allegations against staff or volunteers. 

Fraud connected to cash handling typically occurs as a result of one, or all of the following:

  • where internal controls are weak;
  • lack of a segregation of duties; and
  • overriding of management controls.

It is highly unlikely to completely eradicate the risk of loss to fraud or theft in relation to cash handling, however taking action will help alleviate most risks.

Five actions to consider

  1. Cash handling procedures should be routinely audited, with occasional unplanned/ unnotified reviews.
  2. Promote cash handling policies and procedures that ensure that cash is received and deposited in a secure, timely and effective manner.
  3. Provide cash handling training to employees, incorporating associated policies and procedures.
  4. Ensure that cash is secured in a safe or drop box before banking and is not kept in uncontrolled areas.
  5. Employees or volunteers should not have control over two or more steps in the cash handling /banking procedure.