The majority of UK charities admit fraud is a major risk, but are still failing to carry out basic tasks in order to protect themselves, according to a report published by the Charity Commission.
More than 3,300 charities took part in the Charity Commission's survey into fraud awareness, resilience and cyber security in the sector. Over two thirds of charities agree that fraud is a significant risk. So-called 'insider fraud' is recognised as one of the biggest threats, the report stated.
The survey found that 85% of charities think they are doing everything they can to prevent fraud, but almost half do not have robust protections in place. Just 30% of charities have a whistleblowing policy, and only 9% have a fraud awareness training program.
In its report, the Charity Commission said: 'The findings show charities are not always recognising how vulnerable they are, and are not consistently putting basic checks and balances in place. The gap between awareness and practical action poses a threat to charities' valuable funds, and to public trust and confidence in the sector.'
The Commission recommended a handful of simple steps that charities could take to protect their funds, including introducing and enforcing basic financial controls. They should also make sure no single individual has oversight or control of financial arrangements, as effective segregation of duties is a crucial method of preventing and detecting fraud.
In addition, staff, volunteers and trustees should be encouraged to speak out when they see something they feel uncomfortable about.