Increasing risks of financial crime impacting Australian charities and Not for Profits

What to do

There is a wealth of documentation plus accepted standards and guidance to assist Directors and committee members ensure their organisations have strong integrity frameworks in place in order to ensure compliance with obligations relating to financial crime.

The actions they must ensure are undertaken can be summarised into the following four key principles:

1 Risk identification and assessment
  Identify and assess risks annually and as operations change, which could include on a project-by-project basis; particularly regarding operations overseas
2 Adequate procedures
  Ensure that effective and proportionate procedures are in place to prevent, detect and respond to those risks
3 Communication
  Ensure that policies and procedures are effectively communicated to employees and suppliers and remain so through regular training and other activities
4 Monitoring and review
  Ensure ongoing monitoring of the relevance, existence and effectiveness of the overall integrity framework

The above elements should be documented in a Fraud and Corruption Control Plan or similar, which demonstrates the organisation’s compliance with obligations as well as being a practical working tool to be followed and referenced.

Particular emphasis should be placed on how Australian charities and other Not for Profits respond to risks, allegations and regulatory enquiries into alleged financial crime within their organisation. It is imperative that the Control Plan prescribes and guides what actions must be taken, including preliminary triage assessments, investigations, dealing with potential perpetrators, internal and external communications including with volunteers and donors, and how to respond and report findings to Government funding bodies and regulators.

Further key standards and guidance can be found in:

  • Australian Standards such as AS 8001-2008 Fraud and Corruption Control
  • ACNC Governance Standards and Guide to Fraud Prevention
  • Anti-Bribery Principles for Not for Profit Organisations issued by Transparency International UK.

Find out more about the rising risk of fraud and corruption in the charities and Not for Profit sectors: