New Forest

Be alert to threat of internal fraud

Charity decision-makers need to be alert to the threat of fraud within the organisation and take appropriate steps to reduce the risk.

The Charity Commission has cited figures suggesting that one third of fraudulent incidents against charities were suspected to involve volunteers, staff or trustees.

The Commission recently launched a major awareness initiative to promote fraud prevention and help charities develop anti-fraud cultures.

Charity specialist Michaela Johns, who provides advice and support to a range of not-for-profit organisations, says: “Insider fraud can be hugely damaging to any charity and the statistics suggest it may be on the rise.

“A breach can have a number of consequences: taking funds away that could be spent on beneficiaries; harming a charity’s hard-earned reputation; and denting donors’ confidence in the charity.

“It’s crucial that charity directors get to grips with good internal practices and effective housekeeping to significantly reduce the threat and take steps in order to reduce the impact should a fraud incident occur.”

Michaela advises:

  • Charities should undergo a “top to bottom” assessment of fraud risk exposure.
  • A corporate culture that reduces the risk of fraud – with a focus on motivating high performance rather than financial manipulation.
  • Ensure that employees/volunteers are appropriately screened before they join.

For further information on how to protect your organisation from internal fraud, please contact Michaela Johns on 023 8046 1256

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