By Lucy Morgan, Breast Cancer Now
Why do you take fraud seriously as a risk?
At Breast Cancer Now, we have a zero-tolerance approach to fraud, theft, bribery and corruption. We pride ourselves on conducting our work and business dealings honestly and ethically, in line with best practice in charity corporate governance.
We’re committed to developing a strong anti-fraud culture, and to keeping opportunities for fraud, bribery and corruption to an absolute minimum. Staff responsibility for fraud sits under Breast Cancer Now’s chief operating officer, delegated to associate directors of legal and finance.
What do you do as a charity to mitigate the risk of fraud?
We have various measures and processes in place at Breast Cancer Now to reduce the risk of fraud.
Our fundraising team has in place a ‘red flag’ process whereby potential frauds can be identified on our customer relationship management (CRM) system and followed up with emails and calls. I believe this provides a level of protection for Breast Cancer Now as it can cause suspected fraudsters to move on. It would be helpful to have a central repository of information about frauds and suspected frauds for the charity sector, but this does not exist at present.
After the revised auditing standard for fraud ISA (UK) 240 came into force in 2022, we created a robust governance process, including a detailed Fraud Response Plan and a fraud risk assessment (which teams must complete for their area prior to our review). We annually review and update our policies on anti-fraud, conflicts of interest, gifts and hospitality, anti-money laundering and acceptance, refusal and refund of donations. We completed a counter-fraud gap analysis tool kindly shared by one of our sector colleagues which highlighted further areas to add to our fraud action plan (this is our working document). Our HR team brought in an anonymous whistleblowing tool.
We purchased online anti-fraud training for all our staff, and the fundraising team runs fundraising fraud training. Both of these are annual requirements for staff in the organisation, to ensure everyone is alert to potential risks and knows how to act if they encounter potential fraud.
We enforce segregation of duties in our approvals, both financial and contractual. As part of our annual audit, any fraud is reported to our board’s Finance & Investment Committee. The total value of losses, including specific details of any individual loss above £10,000, are also reported annually. We report to our regulators as required, particularly the Charity Commission, Action Fraud, and the ICO. We also have a Risk and Governance Committee which oversees our risk management, regulatory reporting and whistleblowing.
What action did you take to ensure compliance with the Economic Crime and Corporate Transparency Act which came into force on 1 September this year?
To ensure our compliance with the Economic Crime and Corporate Transparency Act, initially we attended sector training and read legal updates including the ‘What does ECCTA mean for charities?’ help sheet published by Charity Fraud Aware which was extremely helpful:
We assessed where fraud could potentially take place that could benefit our charity and what we should do to prevent this. Our highest risk area is face-to-face fundraising, around which we already have extensive measures and monitoring, so we concluded that we don’t need further action in this area. As we don’t have shops, we don’t have to manage the risk of inflated gift aid claims. We have updated our policy and informed staff and volunteers that over-exaggeration of for example, our green credentials, or what a donation could achieve could potentially mean Breast Cancer Now commits a criminal offence. Unfortunately, our online provider for fraud awareness training has wound up, so we are currently looking into how to update our all-staff training with a view to getting this set up as soon as possible.
What anti-fraud resources have been useful to you?
The Charity Finance Group online information has been extremely helpful, and I joined two groups, Prevent Charity Fraud, and the Fraud Advisory Panel, and attended both groups’ conferences. The groups and individual members of the groups have been incredibly helpful and I am grateful to them all for this.