# Charities likely to have to tackle fraud even harder, say PKF

- Link: https://fundraising.co.uk/2004/06/22/charities-likely-have-tackle-fraud-even-harder-say-pkf/
- Published: 2004-06-22T23:00:00+01:00
- Author: Howard Lake

Many charities do not realise that they could soon be required to deal with fraud
in a different way and must review their systems in light of new government proposals,
argue PKF, the firm of accountants and business advisors.
Charities, like other 
businesses, can become victims of fraud. In the past such business losses have been
largely unknown to the authorities, say PKF, as some organisations have preferred
to write off their loss rather than commit further time and resources to investigation.
In future, however, this many not be such a straight-forward option.

PKF says that organisations, including charities, will be required to report frauds,
thefts, corruption and any other suspicions of criminal activity to the authorities
through proposals outlined in the Home Office White Paper “One Step Ahead – a 21st
century strategy to defeat organised crime” and through the creation of the Serious
Organised Crime Agency (SOCA).

Follow-up investigations by the Inland Revenue, Customs & Excise, Police or other
agencies may soon require charities to face up to and provide information on these
criminal losses.

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Charles Cox, partner at PKF said: “PKF recommends charities should review their 
ability to identify, monitor and deal with fraud, corruption, thefts and other criminal
losses. If business processes are found to be inadequate trustees should take urgent
action to improve them.”

To prepare for these likely changes, PKF recommends that charities should:

 * establish policies and a business culture that encourages reporting information
   about criminal losses to a central point in the organisation.
 * hold an in-depth preliminary investigation into all criminal losses, so that 
   if there is more going on than first ‘meets the eye’ trustees find out as soon
   as possible.
 * establish protocols to determine when criminal losses should be investigated 
   in more depth and to determine when these are reported to the authorities.
 * build business relationships with professional firms that have the necessary 
   expertise to investigate possible criminal losses so that they can obtain commercial,
   investigation and legal advice when they need it.

The warning follows the recent [disqualification by The Charity Commission of Peter Sainsbury](http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2004/06/20/nmart20.xml&sSheet=/news/2004/06/20/ixhome.html),
former head of the People’s Opportunity to Work Trust, for fraud.

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