Fraud Reporting, Catherine Hayes, National Fraud Authority

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Catherine's presentation focusing on the new estimate of fraud in the Charity Sector - derived from a survey of 10,000 charities.

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  • Public sector = 3.5 x the £6 billion spending cuts proposed by the Conservative Government Housing Benefit budget Private sector = 500,000 average paid FTE jobs Individuals = 2 weeks food shopping for every family in the UK Charity Sector = Every penny income raised last year by: Comic Relief £74,360,207 Children in Need £39,000,000 Cancer Research £500,000,000 MacMillan £119,000,000 Oxfam £318,000,000 NSPCC £152,210,000 Christian Aid £104,621,000 Total £1,307,191,207
  • No Less than £10,000 – 91% £10,001 to £100,000 – 88% £100,001 to £500,000 – 77.7 % £500,001 to £5,000,000 – 72.9 % £5,000,000 plus – 70.7%
  • Basic / without outliers £0 to 10,000 – 4.4% / 2.6% £10,001 to £100,000 – 4.0% / 2.8% £100,001 to £500,000 – 3.0% £500,001 to £5,000,000 – 4.0% / 1.6% £5,000,000 plus – 1.7%
  • Fraud Reporting, Catherine Hayes, National Fraud Authority

    1. 1. <ul><li>Working Together </li></ul><ul><li>To reduce the harm caused by Fraud </li></ul><ul><li>Catherine Hayes, </li></ul><ul><li>Head of Measurement and Analysis </li></ul><ul><li>The National Fraud Authority </li></ul>
    2. 2. Fraud is a Serious Crime <ul><li>The National Fraud Authority is an executive agency under the Home Office. </li></ul><ul><li>Aim to reduce the harm done to the UK by fraudsters. </li></ul><ul><li>Co-ordinate the fight against fraud. </li></ul><ul><ul><li>Wider Government </li></ul></ul><ul><ul><li>Private industry </li></ul></ul><ul><ul><li>Not-for-profit sector </li></ul></ul>
    3. 3. A nnual F raud I ndicator 2011 Fraud Loss £38.4 billion
    4. 4. Why the AFI is different Fraud reported to the Police Fraud identified but not reported Unidentified Fraud
    5. 5. Charities are victims of fraud <ul><li>Annual income of £53.2 billion </li></ul><ul><li>Reliant on altruism, trust and honesty </li></ul><ul><li>Low level of fraud awareness </li></ul><ul><li>No fraud loss data exists </li></ul>
    6. 6. NFA survey of 10,000 charities
    7. 7. Charities’ perceptions of fraud <ul><li>63% - “ My charity is not at risk from fraud” </li></ul><ul><li>63% - “ My charity has sufficient policies to deal with fraud” </li></ul><ul><li>68% - “ My charity would benefit from guidance on how to prevent fraud” </li></ul>
    8. 8. Internal Fraud <ul><li>Over 85% respondents thought all types of internal fraud unlikely. </li></ul><ul><li>Theft of inventory - 9% </li></ul><ul><li>Expenses or personal benefits fraud – 5% </li></ul>
    9. 9. External Fraud <ul><li>Over 80% respondents thought all types of external fraud unlikely. </li></ul><ul><li>Unauthorised use of charity name - 8% </li></ul><ul><li>Grant fraud – 3% </li></ul>
    10. 10. Has your charity been a victim of fraud?
    11. 11. Who committed the fraud? 47% Internal 23% External 30% Uncategorised
    12. 12. Did your charity report to the police?
    13. 13. Did you report anywhere else? <ul><li>Bank </li></ul><ul><li>Charity Commission </li></ul><ul><li>Action Fraud </li></ul>
    14. 14. We’ve never experienced fraud <ul><li>66% </li></ul><ul><li>“ My charity is not at risk from fraud” </li></ul><ul><li>90% </li></ul><ul><li>“ All people connected with this charity are honest and trustworthy” </li></ul>
    15. 15. “ 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
    16. 16. £1.3 billion per annum Fraud loss 2.4% of Charitable Income
    17. 17. 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
    18. 18. How to prevent fraud <ul><li>Action Fraud - www.actionfraud.org.uk </li></ul><ul><li>Charity Commission Compliance Toolkit: </li></ul><ul><li>Protecting Charities from harm, Chpt 3, Fraud and financial crime. </li></ul>www.actionfraud.org.uk
    19. 19. Charities supporting fraud vulnerable groups
    20. 20. Help us, help you The NFA want to reduce the harm caused by fraud
    21. 21. For further information: Catherine Hayes Head of Measurement and Analysis Unit The National Fraud Authority tel: 020 3356 1051 email: [email_address] website: http://www.attorneygeneral.gov.uk/nfa www.actionfraud.org.uk

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