The Charity Commission has urged larger charities to test their resilience against fraud with the help of a free self-assessment tool.

The 29-question Self-Assessment Fraud Resilience (Safr) Tool, designed by accounting firm PKF Littlejohn, allows charities to establish how well they are protected against fraud.

The tool aims to identify each charity’s understanding of the nature and cost of fraud as well as whether it has a strategy in place to address the problem and whether it has a counter-fraud structure that will help it implement its strategy.

It will also assess which charities take pre-emptive and reactive actions to counter fraud and the extent to which fraud is addressed and managed like any other business issue.

Sarah Atkinson, director of policy and communications at the Charity Commission, said: “The public, grant funders and commissioners expect charities to be rigorous in their protection of charity assets - using this tool is one way for trustees to demonstrate that they take the risks seriously.”

The tool is currently aimed at larger charities with an income of over £1m but according to Atkinson, the regulator is working with programme designers to develop a similar system for smaller charities. 

The programme was designed using large databases managed by the Centre for Counter Fraud Studies at University of Portsmouth.

The Commission said it has circulated the Safr tool to 6,700 charities with an income of above £1m and is appealing for charities to compete the assessment before the end of March.

Charities will receive instant results on their resilience to fraud, giving them a rating out of 50 and telling them how well they have scored against the hundreds of other organisations across the sector who have already measured their fraud resilience. Charities will also receive an estimate of how much they lose to fraud each year.

Caron Bradshaw, chief executive of Charity Finance Group, said: “Charities always need to be vigilant against fraud and this tool is a useful way for charities to test their counter-fraud strategies. Fraud is constantly evolving, and charities need to regularly review their financial controls and strategies to meet new threats.

“At a time when resources are tight, charities need to be aware of fraud risks and ensure they are adequately protected.”