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Law firm tells Sheffield charities how to cut fraud

Measures to help Sheffield area charities cut the spiralling cost of fraud have been put forward by a specialist advisor.

, from Sheffield-based independent chartered accountants and specialist business advisors Hawsons, said that charities can sometimes be seen as soft targets mainly because many still rely on cash-based fund raising to a certain degree and often have fluctuating income streams which can make it easier to conceal a fraud.


“The problem is costing the ’s charities an estimated £147 million a year and we all lose. Charities lose money, donors lose confidence in giving, beneficiaries lose access to services, employees lose jobs and society loses the valuable contribution a makes to our communities.”

The most common internal frauds identified are usually unauthorised or deliberately misdirected electronic payments, theft of cash takings, inflated expense claims, and failure to remove leavers from the payroll or fictitious employees.

Externally, charities suffer most from cheque fraud, false payment requests, e-crime, phishing e-mails and identity theft.

Preventative measures that Simon, the firm’s charities and not-for-profit sector manager, is suggesting to charities include:

  • Research where your risks are and develop an anti-fraud policy;
  • Communicate anti-fraud measures to spread awareness among staff;
  • Develop a confidential whistle-blowing policy to encourage staff to report any suspicions;
  • Review recruitment procedures by checking references and considering pre-employment screening.
  • Try to consider whether the charity has appropriate segregation of duties in place.



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