Protect your charity from fraud

by | Oct 29, 2019 | Audit, Charities

Cartoon fraudster or thief in mask with sack, how to prevent fraud and cyber crime

The Charity Commission is urging charities to protect themselves from fraud following publication of its research into fraud awareness, resilience and cyber security. The survey, conducted this year updates one carried out in 2009. Over 3,300 charities took part and, according to the Commission, the results suggest “many charities are not doing the basics to protect themselves”.

Here are some of their findings:

  • 69% of the charities taking part, think fraud is a major risk to the charity sector and internal fraud is one of the most significant threats
  • Of the charities affected by fraud in the past two years, 53% knew the fraudster
  • 85% of charities think they are doing all they can to prevent fraud, but almost half do not have any good-practice protections in place

The Commission is encouraging charities to protect themselves against the threat of fraud, not only to protect the funds they have worked so hard to gather, but also to retain and restore  public faith in a sector recently beset by scandal.

Basic steps to protect your charity from fraud include:

  • adhere to basic financial controls, such as having  two signatories for bank accounts and cheques and conducting regular bank reconciliations
  • separate financial duties, so that no single individual has control of financial arrangements
  • encourage everyone to speak out if they see things that make them feel uncomfortable

Another significant finding from the survey was that only 29% of charities reported cyber crimes to the police. The Commission has worked with the National Cyber Security Centre to look at protecting charities from cyber crime. They recommend charities back up data, protect from malware, keep smartphones and tablets safe, use passwords to protect data and learn to spot,  avoid and report phishing attacks. For more information, read The Cyber Security:Small Charity Guide.

As part of our role as specialist auditors for the charities sector, we can help your charity identify and manage risk. To see how we can help, contact us without cost or obligation.

For a round up of all the current issues affecting charities, please read our Autumn 2019 Charities Newsletter.