Blogs/Vlogs

International Fraud Awareness Week

25 October 2019

It is International Charity Fraud Awareness Week this week and the Charity Commission are aiming to raise awareness of the key risks affecting the sector and to promote and share good counter-fraud practices.

They have released details of a research study from early this year which asked 3,300 charities about fraud awareness, resilience and cyber security.

Headline results

  • 69% of charities think fraud is major risk to the charity sector and internal (insider) fraud is recognised as one of the biggest threats.
  • 58% of charities think cyber-crime is a majority risk to the sector and 30% of cyber-crimes were identified by internal IT controls.
  • Over half (53%) of charities affected by fraud in the past two years knew the perpetrator.

Despite these headline statistics many charities perhaps remain too complacent. Over a third indicated that they did not believe their organisation to be vulnerable to any of the most common types of charity fraud and 85% think they are doing everything they can to prevent fraud, but almost half don’t have any good-practice protections in place.

Basic financial controls

All organisations should have basic financial controls in place such as at least two signatories to bank accounts and cheques, and ensuring that no one individual has oversight or control over any area of the financial systems. Segregation of duties is an extremely effective method of both preventing and detecting fraud. This is, however, only the beginning and charities need to develop robust controls to protect themselves.

The Charity Commission are promoting two useful resources:

  • The Cyber Security: Small Charity Guide provides simple, free or low-cost steps to improve cyber security.
  • The Board Toolkit is relevant for larger charities. It helps boards and senior managers understand cyber security from a governance perspective, making it easier to have productive conversations with technical colleagues.

Other helpful UHY blogs

We regularly cover fraud in our charity blogs, and you may find the following other articles useful:

Fraud against charities reaches £2 billion a year. What can be done?

Is your charity at risk from fraud?

Beware of the supplier bank account fraud

Cyber-crime guidance for charities

How charities are responding to cyber security threats

 We can help

UHY have the expertise to help you review whether your systems and controls are adequate, and we are able to advise and recommend where improvements can be made.

If you have concerns about fraud and how to reduce the risk to your charity, or if you would like to discuss any other aspect of your charity, please contact me or your nearest UHY charity sector expert.

Alternatively, you can read more about the services we provide to charities here.

* source of data is Charity Commission at https://www.gov.uk/government/news/new-research-reveals-the-biggest-risks-to-charities

 

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