This week marks the second annual charity fraud awareness week which aims to raise awareness and help charities to combat fraud. The Fraud Advisory Panel have produced a supporters pack which can be found here.

Last year fraud cost the charity sector an estimated £2bn and 800 cases of fraud in charities were reported to the police. The Panel is encouraging charities to:

  • Look out
  • Listen out, and
  • Speak out

To keep #charityfraudout

A number of course and initiatives are ongoing for the week. More details can be found on the website here

The role of Trustees

It is important that Trustees understand their roles and responsibilities in relation to the detection and prevention of fraud within their charities.

The advisory Panel has 10 Questions which it recommends trustees should ask to ensure they are considering fraud appropriately:

  • Do we understand what fraud is and what our responsibilities are
  • Do we conduct an annual fraud risk review
  • Do we have sufficient tests, checks and observations of work in progress
  • Do we have an anti-fraud policy and code of ethics
  • Do we have a response/recovery plan so that people know what to do. What are the ‘golden hour’ processes.
  • Do we understand our financial systems and data and what ‘normal’ looks like
  • Do we encourage our staff to voice concerns
  • Do we promote fraud awareness and understanding with our employees and volunteers
  • Do we have regular and honest discussions with our delivery partners
  • Do we conduct appropriate pre-employment checks

By answering these questions, it should help you identify areas of weakness which can be mitigated.

What to do when things go wrong

In the aftermath of discovering a fraud, the next few steps can be critically important, so what should be done:

  • Act fast to minimise the damage
  • Know who you need to inform (within the charity and external parties)
  • Act on your response/recovery plan
  • Preserve the evidence. You will need this for your own internal investigations and possible external reviews e.g. court action
  • Calculate the losses and be prepared to use more than one legal route to recover them
  • Seek professional legal advice where appropriate
  • Remember to inform the Charity commission and follow its regime for reporting serious incidents.

Clear and positive action can really help to minimise the impact of fraud on the charities beneficiaries and its reputation.

If you have any questions or concerns please feel free to contact your local Bishop Fleming representative.


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