With another Charity Fraud Awareness Week over it once again reminds us that the risk and threat of fraudulent activities is only increasing.
The latest statistics released show a worrying rise in known fraud within the charity sector.
Of 120 UK charity leaders polled 43% had been victims in the last 12 months which is 7% higher than the same survey in 2022.
Not only do cyber criminals continue to circumvent our systems by using increasingly intelligent methods to appear genuine, sadly almost half of these frauds were carried out by staff or volunteers within the organisation with misappropriation of cash or assets accounting for 42% and fraudulent staff expenses making up 35%.
The cost of living crisis is being sourced as the main driving factor with the expectation that incidences are only likely to increase in the coming year as individuals feel financial strain.
Of those charities who identified as victims of fraud nine out of ten experienced a financial loss.
For 65% of charities this loss was less than £10,000 but those charities who experienced more than £10,000 loss had more than doubled from last year at a concerning 43%.
Additionally, 23% of charities in that category suffered losses between £100,000 and £1m with a further 4% losing more than £1m.
The Charity Commission regularly updates its guidance to assist in the prevention of fraud and
has significant resources available such as templates, helpsheets, e-learning and webinars.
It is the responsibility of the trustees to maximise the strength and effectiveness of counter-fraud defences regardless of the size of the charity. It should form part of trustee training and induction and trustees need to ensure they are asking the right questions of management and following their own internal procedures.
At Rickard Luckin our Charity and Not For Profit Team are experienced not only in compliance but also in Business Consultancy. Our team can help you review your systems and procedures, identifying potential weaknesses and making recommendations for improvements. These can be tailored to your needs and presented in a practical format for use by management and trustees. Please contact us if you are concerned and find out how we can help you to mitigate your risk.
If you have any questions about the above, or would like more information specific to your circumstances, please enter your email address below and we will get in touch: