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Charities Commission issues Alert and Offers Tips in Preventing Fraud

September 16, 2013

By Terrance S. Carter

Following the release in June 2013 of the UK National Fraud Authority Annual Fraud Indicator, the Charity Commission of England and Wales (“Charity Commission”) released an alert to warn charities of increasing levels of fraud. The Annual Fraud Indicator states that charities across England, Scotland and Wales lose approximately £147.3 million annually as a result of fraud, with the most common forms of fraud being banking, accounting and identity fraud.

The Charity Commission’s Alert advises charities to have financial controls and policies in place to prevent fraud and to deal with fraud should it arise. It also provides a brief list of “Top Tips” for charities regarding fraud prevention tactics. Tips include:

  • ascertaining the identity and legitimacy of organizations with which the charity works;
  • increasing online protection through firewalls and anti-virus programs;
  • understand the charity’s structure activities and area of operations that could affect risks;
  • create policies governing access, use and storage of electronic information;
  • maintaining proper vigilance and reporting suspicions; and,
  • developing a financial records system for receipt and use of all funds.

These practice tips will be of benefit to any charity as opposed to only those based in England and Wales.

For a detailed look at the 2013 Annual Fraud Indicator, see online at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/206552/nfa-annual-fraud-indicator-2013.pdf.

This article originally appeared in Carters Charity Law Update, July/August 2013 edition. It is reprinted with permission.

Terrance S. Carter is the managing partner with Carters Professional Corporation, and counsel to Fasken Martineau DuMoulin LLP on charitable matters. He is a member of Canada Revenue Agency's Technical Issues Group, past member of CRA's Charities Advisory Committee, Chair of the National Charity and Not-for-Profit Section of the Canadian Bar Association, and has been recognized as a leading expert in Canada by Lexpert and Best Lawyers in Canada.

Mr. Carter is also editor of www.charitylaw.ca, www.churchlaw.ca and www.antiterrorismlaw.ca and a consulting editor of Charities Legislation and Commentary 2009.



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