Nearly 10 per cent of charities with an income over £100,000 suffered fraudulent activity during financial year 2011/12, according to the National Fraud Authority’s latest report.

This year’s Annual Fraud Indicator only sampled charities with incomes over £100,000, and found that 9.2 per cent reported that they had detected fraud during the period.

And almost a quarter of these (23 per cent) suffered insider-enabled fraud.

A total of 1,599 charities took part in the survey, with the most common types of fraud being payment and banking (47 per cent of respondents), accounting (14.8 per cent) and identity (14.1 per cent).

Yet only a fifth of respondents said they had attempted to measure their fraud loss in the last financial year.

Out of the survey participants, 63.7 per cent had an annual income between £100,001 and £500,000; 28.1 per cent received £5001 to £5m and the remaining 8.1 per cent had an income of more than £5m.

The Annual Fraud Indicator's data suggests that of the fraud victims who suffered actual financial loss (excluding those that were able to recover it), an estimated £28.7m was lost to fraud during 2011/12, when extrapolated to all charities in Great Britain with an annual income of £100,000 plus.

This equates to 0.04 per cent of the income of all £100,000+ charities.

The full report will be available from the National Fraud Authority later today.

Commission: ‘Statistics are worrying’

In light of the report, the Charity Commission is urging charities to better protect themselves against fraud and financial crime.

Sam Younger, chief executive of the Charity Commission, said: “The Annual Fraud Indicator highlights that fraud is an issue across all sectors, and charities are no exception.

"It’s worrying that almost a quarter of those who have been victims of fraud have suffered insider-enabled fraud, and this is a timely reminder that it does happen and it’s not always outsiders who are the culprits.

"Trustees, staff and volunteers are the people on the ground who could help stop the opportunities for fraudsters by putting some financial risk measures in place. There should be a culture of counter fraud and risk management created by the trustees and, in larger charities, senior management, who should lead by example in adhering to the charity's internal financial controls and good practice."

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