Auckland charities are being offered free fraud prevention workshops after a string of high-profile cases in which charities were ripped off by former staff members.
Examples include Leanne French who stole $282,000 of funds that were raised to help the deaf, while working for the Hearing Association; while former Government minister Roger McClay ripped off World Vision and Keep New Zealand Beautiful by claiming $25,000 in travel expenses when he had flown at the expense of the taxpayer.
The Charities Commission has teamed up with accounting firm BDO to present free fraud detection and prevention workshops in Auckland - in Takapuna, Auckland Central and South Auckland, as part of a nationwide series.
This follows the release of the Not-For-Profit Fraud Survey in March revealing that 'reported' fraud was 12 per cent - though the real figure is likely to be much higher with 57 per cent of respondents not reporting fraud to the police.
"The overwhelming response to these workshops indicates a very high level of concern among charities in New Zealand about the risk fraud poses," says Charities Commission Chief Executive Trevor Garrett.
"The Commission is seeking to provide support to help safeguard charities against this risk with sound preventative measures, in turn boosting their ability to raise funds and ultimately focus on their charitable work."
There are 4657 charities in the central Auckland area alone who are registered with the Charities Commission, and the region's sector is worth more than $4.47 billion annually to the local economy.
A key concern discovered of the Charities Commision is that most respondents considered fraud prevention a low priority.
"While 86 per cent of respondents considered fraud to be problem for the sector, only 8 per cent consider fraud to be a problem for their individual organisations," says BDO National Audit Director Mark Bewley.
He said only 28 per cent have implemented a fraud control policy.
"This apparent disconnect between accepting fraud and taking action is a real concern and indicates that fraud, deception and lack of transparency may be costing charities nationwide a lot more money than is being reported."
The survey also highlighted that online fraud is now the most 'devastating' threat to charities with significant increases in amounts being stolen via electronic funds transfer and internet banking. The average value of online fraud was $370,000, enough to cripple most not-for-profit-organisations.
The workshops aim to show charities how to reduce those risks and show them how to recognise and prevent fraud, as well as be seen as open and transparent in the eyes of the public
"Fraud is an issue that affects every organisation, whether corporate, government or not-for-profit," says BDO's Andrew Sloman.
"But for a not-for-profit organisation in particular, the potential impact is severe. Even a 'small fraud' of less than $10,000 would have a major impact for many and the funds will generally come straight off the bottom line and never be recovered," says Mr Sloman.
"Fraud can also have a significant impact on the public's trust and confidence in a charity, and its ability to fundraise and carry out its work. So it is crucial that appropriate internal controls are in place to minimise the risk of fraud."
WHAT How to Prevent Fraud in Your Charity
WHEN Takapuna June 18 1-4pm, Bruce Mason Centre
cnr Hurstmere Road and the Promenade