Social Purpose and Non-Profit Organisations: Fraud Risk Assessment

Sean McGurk
12/09/2022

Fraud and the responsibilities of governing bodies

Why is tackling fraud important to Boards

The Australian Charities and Not-for-profits Commission (ACNC) has highlighted that fraud is a serious problem that Boards can’t afford to ignore, with surveys revealing that up to 15% of not-for-profit organisations suffered a fraud event in the previous two years. Fraud poses a serious risk to valuable funds, as well as sensitive data, and can damage the good reputation of social purpose organisations, affecting public trust and confidence in the sector.

Boards are the custodians of their social purpose organisations and have a duty to manage their organisation’s resources responsibly. They have legal duties and responsibilities to safeguard their organisation and to ensure that its funds and assets are protected, properly used and applied, and accounted for. The public needs to be sure that money donated to social purpose organisations is used properly and goes to the causes for which it is intended.

In this document references have been made to ACNC guidance. Although this is issued specifically for charities, it also identifies good practice which can be applied for all social purpose organisations.

For more information, please speak with your adviser or get in touch with the Crowe Audit team.

Social Purpose and Non-Profit Organisations: Fraud Risk Assessment