Latest research on charities and fraud: some improvement in levels of protection

But more needs to be done

PKF Littlejohn partnered with the Centre for Counter Fraud Studies at University of Portsmouth  to produce the new report ‘The Resilience to Fraud of the Charity Sector in England and Wales 2015', which is the most extensive and comprehensive report yet undertaken into how well charities are protected against fraud, building on a similar report published in 2010.

Self-Assessment Fraud Resilience (SAFR) tool

Fraud resilience is a measure of how well organisations protect themselves against fraud (originally sponsored by the Government's National Fraud Authority) with a rating of 0 (worst) – 50 (best). PKF Littlejohn and the University of Portsmouth worked with the Charity Commission to develop a charity-specific version of the Self-Assessment Fraud Resilience (SAFR) tool which was released for use in February 2015. The Charity Commission publicised the existence of this tool to all charities and invited them to complete it.

This report, with a foreword written by Oliver May, Head of Counter Fraud at Oxfam Great Britain, is based on the analysis of data provided by 392 charities in England and Wales who completed the SAFR tool; it highlights the current position and compares it with what was found five years ago.

Slight improvement since 2010

Overall, the charity sector achieved a mean score of 26.1 (24.2 in 2010) and median score of 26.5 (25.0 in 2010) out of a possible 50. Excluding the worst 10% and the best 10% of the 392 charities who used the SAFR tool, the scores ranged from 10 to 40.5. This represents a slight improvement since 2010.

Jim Gee, Partner and Head of Forensic and Counter Fraud Services for PKF Littlejohn, and co-author of the report, said:

“This report shows that the charity sector in England and Wales has made some improvements to its protection against fraud. However, progress has been slow and more needs to be done urgently as the general extent of fraud grows and its cost increases. The report sets the agenda and provides an evidence base for further progress.”

Professor Mark Button, Director of the Centre for Counter Fraud Studies at University of Portsmouth, and co-author, said:

“The charity sector in England and Wales is markedly less well protected than organisations from the public sector and the private sector. Given that the effect of fraud in the charity sector is to deprive important charitable purposes of the full extent of the donations which are made, it is vital that urgent action is taken to improve levels of fraud resilience.”

For more information about the report and to download a copy please click here.




About the authors:

Jim Gee is a Partner and head of Forensic and Counter Fraud Services at PKF Littlejohn, the accountancy and business services firm and Visiting Professor and Chair of the Centre for Counter Fraud Studies at University of Portsmouth, Europe's premier research institute concerning fraud.

During more than 25 years as a counter fraud specialist, he led the team which cleaned up one of the most corrupt local authorities in the UK - London Borough of Lambeth - in the late 1990s; he advised the House of Commons Social Security Select Committee on fraud and the Rt. Hon. Frank Field M.P. during his time as Minister of State for Welfare Reform; between 1998 and 2006 he was Director of Counter Fraud Services for the Department of Health and CEO of the NHS Counter Fraud Service, achieving reductions in losses of up to 60% and financial benefits equivalent to a 12:1 return on the costs of the work.

He has worked with organisations from 38 countries to counter fraud in Europe, the Americas, Asia, Australasia and Africa. He has also advised the Chinese Government about how to measure, pre-empt and reduce the financial cost of fraud.

Professor Mark Button is a Director of the Centre for Counter Fraud Studies at University of

Portsmouth.  He has written extensively on counter fraud and private policing issues, publishing many articles, chapters and completing four books with one forthcoming: Private Security (published by Perpetuity Press and co-authored with the Rt. Hon. Bruce George MP), Private Policing (published by Willan), Security Officers and Policing (Published by Ashgate), Doing Security (Published by Palgrave), and Understanding Fraud: Issues in White Collar Crime (to be published by Palgrave and co-authored).

He is also a Director of the Security Institute, and Chairs its Academic Board, and a member of the editorial advisory board of ‘Security Journal'.  Mark founded the BSc (Hons) in Risk and Security Management, the BSc (Hons) in Counter Fraud and Criminal Justice Studies and the MSc in Counter Fraud and Counter Corruption Studies at Portsmouth University and is Head of Secretariat of the Counter Fraud Professional Accreditation Board (CFPAB).

About PKF Littlejohn

PKF Littlejohn is the London member of PKF UK, the national accounting firm with over 1,000 partners and staff in 20 offices and a turnover of £78m.  Based in London's Canary Wharf, PKF Littlejohn advises organisations from across the charity and not for profit sector in both the UK and internationally. 

PKF Littlejohn's Forensic and Counter Fraud Services team is staffed by expert specialists with a high-level national and international track record built up over many years. We have advised clients of many different types and sizes, including governments, major national and international companies and high profile charities.