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Blind trust is not a control, was among the messages coming out of the start of the Charity Fraud Awareness Week. Mia Campbell of the Fraud Advisory Panel (itself a charity) introduced the first webinar, on the basics. That was chaired by the chair of the UK Charities Against Fraud Group, Dave Carter, the head of global counter-fraud at the British Council.
Also speaking were charities and schools counter-fraud specialist Sophie Brown of BDO LLP; and like Dave Carter a former law enforcement man, Mark Jackson, the head of counter-fraud for the charity Christian Aid.
The webinar launched the Panel’s charity pledge, that has been signed by the British Council and more than 80 other charities. Briefly, those signing up have pledged to do six things: appoint a suitable person; ensure that trustees are aware of their legal duties; to consult, with staff, volunteers and trustees; create a written fraud policy; and perform checks and assess each year. Visit www.preventcharityfraud.org.uk.
The hour’s session ended with a top tip. “I guess my top tip would be, it is about visibility and engagement with the rest of the organisation, ‘because fraud is not going to be solved by the head of counter-fraud. It’s everyone’s responsibility. For Sophie Brown, she urged that charities carry out an up to date fraud risk assessment, considering the pandemic; because counter-fraud controls have changed; people have moved to different roles, and some roles may have disappeared completely. It’s important, she said, that charities are aware of their current fraud risks, and so be aware earlier of a fraud, to stop financial and reputational damage.
The last word went to Dave Carter’s tip was acceptance that fraud is going on, and is a matter of when not if; ‘whether you think it is or not’. “Please don’t assume that everything is as it should be.”
Earlier, Dave Carter echoed Sophie’s point that fraud should not be a taboo, dirty word among charities: “That’s actually the environment where fraud arises.” As he explained, if corruption is the disease, the cure is transparency; by talking about fraud against charities, openly and honestly, that leads to frauds being prevented and reduced.
Hence the annual Weeks by the Panel, that Professional Security has been backing since the mid-2000s, when few in charities did want to admit to a problem with fraud.
Sophie Brown reported findings of a survey that most, 65 per cent of those replying agreed or strongly agreed that the pandemic had increased the risk of fraud to their charity; mirroring the general spike in frauds reported to the UK official reporting centre Action Fraud. The most common fraud experienced against charities in the last 12 months was said to be payment diversion fraud; and then theft of cash or other assets, whether by staff or people unconnected to the charity. She suggested that fraudsters are trying all methods against charities; and urged charities to be vigilant.
Getting the basics right is more important than ever, she said. Dave Carter said that trust – and certainly blind trust – in staff was not a control, while he admitted that in the charity sector, ‘trust is the lubricant that gets everything done’. As in a workplace fraud anywhere else, staff may – for whatever reason – seek to take advantage of a lack of controls by line management; or they may be senior staff or they may have worked there for a long time.
For more about the Week, and other online sessions, visit https://www.fraudadvisorypanel.org/. Or register at https://preventcharityfraud.org.uk/events/ where you can sign up to hear the ‘basics’ session recording.
More on counter-fraud generally in the December print edition of Professional Security magazine.