News Blog Charity Fraud Awareness Week The 22 October begins Charity Fraud Awareness Week, so our finance Director, Dave Hawes, shares the knowledge on the problem of fraud and how charities can work to tackle it within their organisations. We’ve seen some activity in the press recently about individuals who work within charities who commit fraud. Is this a problem that’s particular to the charities sector? Unfortunately, fraud is present across society as a whole - particularly because technological developments have expanded opportunities for different types of fraud across all industries to take place. Fraud impacts charities as much externally as it does from within an organisation, so hopefully the publicity around recent cases will help promote greater awareness of this fact and act as a deterrent to those both inside and outside charities. Charities are not necessarily more vulnerable than any other types of business, but they may well be perceived to be as there does appear to be an increase in the attention fraudsters are giving charities. Charities will also potentially deal with more physical cash and may have strong and positive reputations which fraudsters may see as openings to exploit. Is fraud a result of systematic failure? What can charities do to minimise any risk to their funds being misappropriated? However good an entity's controls, be it a charity or company, there remains a risk of fraud. The most common weakness is the human element. Most external frauds will tend to exploit human weakness, while internal charity frauds could be defined as coming from human weakness. Therefore, training and awareness are cornerstones that need to be in place to help combat fraud and minimise the risk: but a risk will always remain. What steps can charities take to guard against cyber fraud? Cyber fraud is increasingly relevant, not just to charities or businesses, but in politics and national security too. A modern day thief is likely to see more opportunity and less risk in stealing through a cyber attack rather than physically robbing or stealing. Again, awareness is so important - most cyber attacks will need a way in, which will often be through human error such as opening a dodgy email. Aside from this having an up-to-date system and taking the basic learnings from things such as Cyber Essentials are vital. What is the impact of fraud on a charity? And how do charities recover from an instance of fraud? Fraud is likely to have a short term financial impact, which can potentially be significant, particularly in smaller charities that may not have the resources available to deal with it. However, for larger charities the reputational damage can be more significant and the loss in support is difficult to reverse. Essentially the impact on a charity is that they will be less able to support their beneficiaries. Recovering from a fraud needs a very honest and open appraisal of what has happened to minimise the risk of future frauds. It's also essential to be transparent with supporters, so they can understand what has happened and why. What steps does Devon Air Ambulance take to ensure the sums raised by fundraisers and donors are secure and go to where they are intended? Devon Air Ambulance has taken the Charity Finance Group Counter Fraud Pledge, and we are part of the Cyber Essentials scheme. We regularly review and refine controls, and work with both our auditors and other providers to apply an external perspective. As Finance Director, I am nearing completion of a course to become an Accredited Counter Fraud Specialist, and I aim to continue in reviewing the risks that we’re open to and managing these in the best possible way. We have internal training for staff and also carry out internal testing to make sure the high standards we expect are understood and applied. Everything we do flows from our strategy, and its basic focus is to use donors' money to provide an outstanding service to our patients, and it’s impossible to achieve this aim without first considering and managing potential fraud. Devon Air Ambulance is 100% independent of Government funding; every penny of our income comes to us through our supporters and donors. To find out more about how we look after that income, read this year's Annual Report and Accounts.