pdf fraud reporting, national fraud authority

Working TogetherTo reduce the harm caused by Fraud

Catherine Hayes, Head of Measurement and AnalysisThe National Fraud Authority

Fraud is a Serious Crime

• The National Fraud Authority is an executive agency under the Home Office.

• Aim to reduce the harm done to the UK by fraudsters.

• Co-ordinate the fight against fraud.

Wider Government

Private industry

Not-for-profit sector

Annual Fraud Indicator 2011

Individuals£4.0 billion

Charity Sector

£1.3 billion

Public Sector£21.2 billion

Private Sector£12.0 billion

Fraud Loss

£38.4 billion

Why the AFI is different

Fraud reported to the Police

Fraud identified but not reported

Unidentified Fraud

Charities are victims of fraud

• Annual income of £53.2 billion

• Reliant on altruism, trust and honesty

• Low level of fraud awareness

• No fraud loss data exists

NFA survey of 10,000 charities

Charities’ perceptions of fraud

• 63% - “My charity is not at risk from fraud”

• 63% - “My charity has sufficient policies to deal with fraud”

• 68% - “My charity would benefit from guidance on how to prevent fraud”

Internal Fraud

• Over 85% respondents thought all types of internal fraud unlikely.

• Theft of inventory - 9%• Expenses or personal benefits fraud – 5%

External Fraud

• Over 80% respondents thought all types of external fraud unlikely.

• Unauthorised use of charity name - 8%• Grant fraud – 3%

Don't know4.8%

Yes, in the last 12 months

4.9%

Yes, but not in the last 12

months5.6%

No84.8%

Has your charity been a victim of fraud?

Who committed the fraud?

18.6

15.9

14.2 14.2

11.510.6

8

3.52.7

0.9

0

2

4

6

8

10

12

14

16

18

20

Other

Employee - manager

Volunteer

Employee – non manager

Don’t know

Beneficiary

Contractor / Supplier

DonorTrustee

Partner organisation

47% Internal

23% External

30% Uncategorised

No62%

Don’t know8%

Yes30%

Did your charity report to the police?

Did you report anywhere else?

• Bank• Charity Commission

• Action Fraud

We’ve never experienced fraud

• 66%

“My charity is not at risk from fraud”

• 90%

“All people connected with this charity are honest and trustworthy”

“In your opinion, how much fraud against your charity could be undetected?

Please provide your estimate as a percentage of your charities’ annual income…”

767 respondents

Estimate of fraud against the Charity Sector

£1.3 billionper annum

Fraud loss 2.4% of Charitable Income

How does this compare to other estimates?

Telecommunications sector 2.4%

(£730 million) of turnover (£30 billion)

General insurance sector 6.2%

(£2.1 billion) of annual total net premiums in the general insurance market (£34 billion)

TV licence fee evasion 5.2%

(£196 million) with £3.6 billion collected

Tax

3.0%(£15 billion) of total

net tax liabilities

Tax credits 2.1%

(£460 million) of tax credits expenditure

Benefits

0.7%(£1 billion) of benefit

expenditure (£148 billion)

Mortgage fraud

0.7%(£1 billion) of the gross mortgage market (£144 billion lent in 2009)

NHS Bursaries 2.7%

(£12.4 million) of expenditure (£460 million)

Top down estimates of

undetected fraud

How to prevent fraud

• Action Fraud - www.actionfraud.org.uk

• Charity Commission Compliance Toolkit: Protecting Charities from harm, Chpt 3, Fraud and financial crime.

www.actionfraud.org.uk

Charities supporting fraud vulnerable groups

Help us, help you

The NFA want to reduce the harm caused by fraud

For further information:

Catherine Hayes Head of Measurement and Analysis Unit The National Fraud Authority

tel: 020 3356 1051 email: catherine.hayes@attorneygeneral.gsi.gov.uk website: http://www.attorneygeneral.gov.uk/nfa

www.actionfraud.org.uk