Char­i­ties plagued by high amount of fraud ac­tiv­ity

Kapi-Mana News - - NEWS - By AN­DREA O’NEIL

Fraud costs Porirua’s char­i­ties $ 1 mil­lion a year, so ev­ery pa­per­clip and en­ve­lope must be ac­counted for, char­ity work­ers were told at a re­cent work­shop.

Staff from 30 char­i­ties around the Welling­ton re­gion gath­ered at Pataka on June 27 to hear re­sults of a transTas­man sur­vey on char­ity fraud, pre­sented by fraud ex­perts.

Porirua’s 178 reg­is­tered char­i­ties are worth $55.8m a year. About 1.7 per cent of that is lost to fraud, BDO au­dit part­ner Mark Bew­ley told the crowd. In the Welling­ton re­gion $40m is stolen a year.

‘‘That’s quite a big chunk of money, and at a time when ev­ery­body’s tight­en­ing their belts there’s huge fi­nan­cial im­pact,’’ Mr Bew­ley said.

About 60 per cent of char­i­ties are af­fected by fraud, he said. On­line fraud, in­volv­ing in­ter­net bank­ing, makes up just 4 per cent of fraud cases but costs the sec­tor the most – the av­er­age amount stolen is $370,000, Mr Bew­ley said.

‘‘It’s scary how fast that can be­come a very big num­ber.’’

Pay­roll and credit cards are other com­mon ve­hi­cles for fraud, he said.

The av­er­age fraud­ster is a woman em­ployee in her 40s, who feels she is not earn­ing enough and tries to keep up with the Jone­ses, Mr Bew­ley said.

How­ever, any­body who hits a rough patch in their per­sonal lives could be tempted to rip off a char­ity, he said.

Not only does fraud leave a big hole in a char­ity’s fi­nances, the re­sult­ing im­age dam­age makes it harder for the char­ity to at­tract fund­ing and do­na­tions, he said.

‘‘Not only do you have a hole you have got to fill but you’re of­ten on the back foot.’’

An un­apolo­get­i­cally strict of­fice cul­ture is es­sen­tial to pre­vent­ing fraud, Char­i­ties se­nior in­ves­ti­ga­tor Si­mon Humphries told work­shop at­ten­dees.

Staff tak­ing an en­ve­lope or print­ing per­sonal doc­u­ments at work should be re­garded as thieves, he said.

‘‘It’s steal­ing off peo­ple who give you money.’’

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