Not-for-profit Fraud Survey

Having been around the non-profit sector for a number of years, I have seen some activity that has made my hair turn grey, and it’s good to see that BDO have released survey results on fraud in the sector.

Some interesting findings from the BDO Not-For-Profit Fraud Survey 2012 are summarised below:

HOW MUCH IS LOST TO FRAUD?

• 12% of organisations suffered fraud in the past two years

• Specifically, 75 organisations suffered 330 frauds in the past two years

• Fraud totalling $2,916,616 was reported, with the average fraud being $8,838

• Of the respondents who experienced fraud, 49% had suffered fraud previously

• Almost one in three organisations with turnover exceeding $10 million suffered a fraud

• 25% of respondents who experienced fraud believe the full value of the fraud was not discovered

• Main factors contributing to fraud occurring were breaches of trust and overriding of internal controls

• The most common type of fraud reported was cash theft (40%)

• The average online payment fraud was $370,000

• The average duration of each fraud was 14.5 months.

 

Who commits fraud and why?

The typical fraudster was a female aged in her forties and was a paid employee in a non-accounting role

• Only 9% of frauds were committed by volunteers

• Collusion was present in 20% of frauds reported, with a typical colluder being a female aged in her thirties or over fifty and a paid employee

• Respondents indicated that financial pressure and maintaining a lifestyle were the most common motivators for fraud.

Click here access the full survey results visit

 

BDO have also produced a policy and procedure toolkit, which has been receiving positive feedback to from those who attended the Fraud Workshops they did with the Charities Commission.