Catherine's presentation focused on the new estimate of fraud in the Charity Sector.

1. Working Together
To reduce the harm caused by Fraud
Catherine Hayes,
Head of Measurement and Analysis
The National Fraud Authority

2. 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

3. Annual
Fraud
Indicator
Private
2011 Public Sector
Fraud Loss £12.0
Sector
£21.2 billion
£38.4 billion
billion
Charity
Individuals Sector
£4.0 billion £1.3 billion

4. Why the AFI is different
Unidentified
Fraud
Fraud identified
but not reported
Fraud reported
to the Police

5. 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

6. NFA survey of 10,000 charities

7. 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”

8. Internal Fraud
• Over 85% respondents thought all types of
internal fraud unlikely.
• Theft of inventory - 9%
• Expenses or personal benefits fraud – 5%

9. External Fraud
• Over 80% respondents thought all types of
external fraud unlikely.
• Unauthorised use of charity name - 8%
• Grant fraud – 3%

10. Has your charity been a victim of fraud?
Don't know Yes, in the last
4.8% 12 months
4.9%
Yes, but not in
the last 12
No months
84.8% 5.6%

11. Who committed the fraud? 47% Internal
23% External
30% Uncategorised
20 18.6
18
15.9
16
14.2 14.2
14
11.5
12 10.6
10
8
8
6
3.5
4 2.7
2 0.9
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12. Did your charity report to the police?
Don’t know
8%
Yes
30%
No
62%

13. Did you report anywhere else?
• Bank
• Charity Commission
• Action Fraud

14. 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”

15. Estimate of fraud
against the Charity Sector
“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

16. Fraud loss
2.4% of Charitable Income
£1.3 billion
per annum

17. How does this compare to other estimates?
Tax Tax credits
Telecommunications sector
2.1%
3.0% 2.4%
(£460 million) of tax
(£15 billion) of total (£730 million) of turnover (£30 billion)
credits expenditure
net tax liabilities
Benefits Top down NHS Bursaries
0.7% estimates of 2.7%
(£12.4 million) of expenditure (£460 million)
(£1 billion) of benefit undetected fraud
expenditure (£148 billion)
Mortgage fraud General insurance sector
TV licence fee evasion 6.2%
0.7%
(£1 billion) of the gross mortgage
5.2% (£2.1 billion) of annual total net premiums in
(£196 million) with £3.6 billion collected the general insurance market (£34 billion)
market (£144 billion lent in 2009)

18. 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

19. Charities supporting fraud vulnerable
groups

20. The NFA want to reduce the harm
caused by fraud
Help us, help you

21. 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