Fraud hits a quarter of charities

Finance | 1 Oct 2006

A quarter of charities have had cash or assets stolen through fraud in the last two years, and 9 per cent have been defrauded more than once, according to new research. According to the annual PKF/CFDG risk survey, 90 per cent of charities have rolled out risk management measures such as risk policies, risk registers, business continuity plans and control assurance, but only one-fifth have all of these measures in place.

Of the 312 charities surveyed, nearly 50 per cent were concerned about the quality of their trustees. Particular areas of concern were the levels and mix of skills, the effectiveness of performance reporting and decision-making. Three-quarters of respondents were worried about recovering full costs under public service contracts and 68 per cent were concerned about providing pensions for their staff.

Richard Weighell, report author and head of PKF's risk services team, said: "Although it is heartening that charities have moved forward in the past year...many still have some way to go to implement their strategies fully and I am concerned that too many do not fully test procedures and policies. Given that a quarter of charities know they have been the victim of fraud in the last three years, and the real figure is undoubtedly far higher, no-one can afford to be complacent."

More than a quarter of charities believe their risk management is working effectively, half see their strategies as being part-embedded and 85 per cent see their risk management as continuing to improve.

Directory: Charity Finance Directors' Group (CFDG) | PKF (UK) LLP
Who's Who: Richard Weighell

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