Charity fraud update

Lately we have seen a rise in fraudulent activity in the not for profit sector. We often hear of charities falling victim to frauds, both internal and external and individuals using charities’ brands and name to collect monies taking advantage of people’s good nature.

What can be done about this? Well more often than not, charities will not have the benefit of an in-house fully skilled counter fraud resource. Most don’t actually need this, but to dispel a key myth, most fraud is not identified or reported by the fraud team or by the auditors. In most occasions, it will be reported by staff, often not appreciating actually what, or the extent or scale of their suspicion, they report.

In this charity fraud update we discuss some of the common risks that charities can be exposed to and look at how they can result in an increased risk of fraud. We explore how charities can mitigate exposure to these risks and look at ways in which they can better protect themselves against fraudulent activity.



Facilitate a strong control environment - trust is not a control

13 November 2015

Lately we have seen a rise in fraudulent activity in the not for profit sector. We regularly hear of charities falling victim to frauds, both internal and external and individuals using charities’ brands and name to collect monies using peoples good nature .

Risks of electronic banking

13 November 2015

Cash theft is one of the most common types of fraud in not for profit entities, with cash donations being a key income stream in many charities.

Authorisation and review of journals

13 November 2015

When internal controls have been bypassed and a fraud has been committed, the guilty party will often attempt to cover their tracks. A typical method of concealment is to use journal postings.

Understanding the role of volunteers

13 November 2015

Not for profit entities are reliant on an environment of trust and honesty, which may be appealing to would be fraudsters as charities are seen to be extremely respectable, providing a veil for them to hide behind.

Disguising poor results

13 November 2015

Fraud is not only the physical theft of assets but can also be in the form of manipulation of financial results to present a picture the fraudster wishes the readers to see.