The fight against fraud for INGOs continues

Following the recent floods in Pakistan and the Ukrainian humanitarian crisis, both the Charity Commission and the Fundraising Regulator continue to urge safe giving, using established and trusted charities. By supporting registered charities people can go some way in ensuring their donations will be regulated in line with the charity law framework.

Even with these recommendations, the risk of fraud for INGOs is still wide-reaching and continues to increase in sophistication. The perfect storm of complicated local tax regulations coupled with local governments, partners delivering programmes and banks all potentially colluding means trustees need to ensure their charities adhere to policies and procedures to mitigate the risks of fraud. This should stem from trustees’ commitment to mitigating bribery and fraud as well as performing risk assessments, carrying out appropriate due diligence on partners and, more importantly, monitoring funds and visits (where possible) to assess the outputs of their programmes or grants.

The rise of cybercrime

From our recent benchmarking analysis, which will be published in a few weeks, 25% of trustees’ annual reports quite rightly include fraud and financial control as a risk. But this feels surprisingly low given the financial significance of these things.

In addition to the “traditional” fraud international charities are exposed to, cybercrime and global malicious emails are also increasing. Fraudsters have no empathy when it comes to the type of organisation they target, their interest is purely financial. This means INGOs are on the firing line just as much as other organisations. And the switch to more homeworking has heightened this risk as it creates further opportunities for fraudsters to bypass controls.

This week is Charity Fraud Awareness Week (17 – 21 October). This is an excellent opportunity for trustees to lead by raising awareness of fraud and cybercrime within organisations, particularly with staff. Policies, training, anti-money laundering courses, preventative procedures and overall awareness can all go a long way to mitigate this risk. The tools to fight fraud are there, it’s down to all of us to use them.


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