Tackling Charity Fraud- the Fraud Advisory Panel issues new report and guidance for trustees and senior managers


The Report, entitled ‘Tackling Charity Fraud: Prevention is better than Cure’ was published on 22 March by the Fraud Advisory Panel which works in conjunction with the Charity Commission.

Three points are identified in the report as compelling reasons for trustees to become educated in fraud prevention. The first is the fact that fraud is currently believed to cost the charity sector as much as £2.3 billion per year. Secondly, due to the sheer number of incidents reported to police, not all incidents will be investigated and even less will lead to a conviction. Thirdly, charities should be extra-vigilant as they are often seen as soft targets by fraudsters, and yet the potential reputational impact of becoming a victim of fraud as a charity is staggering.

The Report highlighted the importance of those in senior management positions within charities taking responsibility for anti-fraud agendas and setting an example to all within the organisation to demonstrate that fraud will not be tolerated under any circumstances.

To avoid the increasing risks surrounding fraud and cybercrime, the Advisory panel suggests that charities ensure that all passwords within their systems are unique, anti-virus software is updated, and staff are informed not to click on links in unsolicited emails. Charities should also consider obtaining cyber insurance to cover the costs incurred if a cyber security breach occurs.

If trustees detect fraud within their organisation, they must be prepared to mitigate the effects, call the police, and communicate with social media. The Report suggests that charities should have policies in place so that they have a pre-prepared plan of action in the event that a fraud situation occurs. Trustees must comply with their legal obligations at all times, and if they feel that they are struggling to handle a situation, they should turn to the Charity Commission for guidance and support. All serious frauds must be reported to the Charity Commission.

The Fraud Advisory Panel has also released additional resources to help charities to tackle the risk of fraud. These include checklists, case studies and infographics which can be used to train staff and beneficiaries.

If you have any questions or require any advice on the issues discussed in this article please contact Amanda Maskery on: (0191) 226 7838 or amanda.maskery@sintons.co.uk.


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