Next week is Charities Fraud Awareness Week, established in the UK and aimed at empowering charities to talk about and prevent fraud. Charities generate significant income – more than $140 billion per year – which can make them vulnerable to fraud if they have inadequate controls over finance and governance.
Fraud surveys conducted in the Australian not-for-profit sector over the past decade have found between 10% and 15% of not-for-profits had suffered fraud in the two years previous.
We have identified that the main factors leading to fraud are breaches of trust and a lack of satisfactory controls. Over half the allegations of fraud received by the ACNC have related to the conduct and activities of senior and entrusted members of the charity, including the chief executive officer, directors, and financial officers but fraud can be committed by anyone involved with a charity.
We have a wealth of 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.
It is in everyone’s interests that the sector is robust and fraud aware. We encourage charities and stakeholders in the sector to use the opportunity to examine their fraud processes and to participate in the week by following the campaign on social media and sharing useful resources under the hashtag #CharityFraudOut.
We will be posting on social media and hosting a webinar that looks at fraud awareness and ways for charities to mitigate fraud. You can also register for the free online hub for charities to join in the discussion and online events.
CPA Program Not-for-Profit Scholarship
CPA Australia and the Australian Scholarships Foundation are offering up to five scholarships for managers or financial officers at registered charitable not-for-profit organisations.
The scholarships will allow recipients to enhance their knowledge and skills to further contribute to the management and accountability of charitable not-for-profits.
This is a great opportunity for people in charities to get additional relevant training which can help meet the often-complex charity obligations.
Applications close Monday 28 October. Find out more about the scholarships and apply.
Not-for-Profit Governance Forum
Last week I presented at the Governance Institute’s Not-for-profit Governance Forum in Sydney and Brisbane. Governance is a critical element in protecting charities from fraud and an area where we have found some charities benefit from extra support.
It was great to see a wide range of organisations in attendance and hear directly from people involved in charities about some of their concerns and the challenges they face.
ACNC input to the Australian Accounting Standards
We made a recent submission to the Australian Accounting Standards Board on Amendments to Australian Accounting Standards - Disclosure in Special Purpose Financial Statements of Compliance with Recognition and Measurement Requirements (ED 293).
The additional disclosure requirements proposed will provide more details in the special purpose financial statements that some charities submit as part of their Annual Information Statements. We believe this is a positive step towards greater transparency, accountability and good governance.
To coincide with Charity Fraud Awareness Week, we are focusing our next free webinar on charity fraud and how charities can protect themselves from mismanagement and wrongdoing, scheduled for Thursday 24 October.
I encourage people to attend to hear about the ACNC’s experience with fraud and what we expect of charities. If you can’t make it, a recording will be available on the website.
The November webinar will be held on Thursday 21 November and will cover reporting to the ACNC, including useful tips and tricks to help charities manage reporting obligations and prepare to submit the 2019 Annual Information Statement.
Register now for our next webinar.
The Hon Dr Gary Johns