ALTHOUGH Charity Fraud Awareness Week is over for this year the Australian Charities and Not-for-profits Commission is urging charities to continue to take measures to protect themselves against fraud.
According to the Australian Charities and Not-for-profits Commission (ACNC) the most common areas of charity non-compliance are private benefit for a charity’s responsible persons, duties of responsible persons – particularly poor financial management – and fraudulent or criminal activity.
In 2018-19, the ACCC’s Scamwatch received 996 reports of fake charity scams, with reported losses of $300,395 across the financial year.
ACNC Commissioner Gary Johns said all organisations were at risk of fraud and charities were just as likely to be targeted by fraudsters as private corporations.
“Charities are not immune to fraud,’’ he said.
“Just because a charity’s purpose is to do good, does not mean everyone who interacts with that charity has the same noble aim.
“The trust and goodwill that charities rely on makes them vulnerable to exploitation, especially if they fail to put preventative measures in place.’’
He said it was more effective to prevent fraud from occurring than to investigate and take remedial action afterwards.
“Not all charities will be able to withstand the financial loss and reputational damage caused to them if they fall victim to fraudsters.
“But all charities can assess their risk of being targeted by fraudsters and take measures to reduce that risk.
Assistant Charities Minister Zed Seselja said it was important for the vibrancy of the charities sector that people talked openly about fraud.
“It’s up to everyone involved in charities to talk openly about fraud – the only people benefiting from silence on fraud are the perpetrators,’’ he said.
“If you think something is not right, report a concern to the ACNC.”
Implementing a fraud prevention strategy and applying data security mechanisms and strong financial controls, are measures charities can take to help prevent fraud.
The ACNC has resources to support charities to protect themselves from fraud.
The recently released Governance Toolkit includes modules to help charities manage risks including financial abuse, cybersecurity and working with partners.
Charity Fraud Awareness Week, an international initiative designed to raise awareness and help prevent fraud in the charity sector, finished on October 26.
