Charity insider frauds – the need to encourage staff to challenge and report

27/04/2018

The Charity Commission has just published the findings of a study which found that cultural factors contributed towards 70% of insider frauds.  These factors included placing excessive trust in individuals and lack of challenge and oversight.  The Commission is therefore encouraging all charities to challenge the behaviour of their staff, volunteers and trustees, directing them to be vigilant and speak out when they have any concerns rather than turn a blind eye.

Previous research by the Commission identified that one third of all frauds suffered by charities are suspected of being committed by charity staff, trustees or volunteers.  This is therefore a very significant risk, which combined with the most recent study above indicates that almost a quarter of all frauds suffered by charities are committed by insiders due to their being excessive trust and insufficient challenge in the organisation.

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