Are charities really less affected by fraud, as a survey for the Fraud Advisory Panel suggested? Caroline Waddicor, trainer and investigator for consultancy Hibis, begs to differ. She feels charities have a big problem.
The very make-up of good people wanting to work for charities may make them more, not less, prone to frauds. And charities like any other organisation may stick their proverbial head in the sand rather than admit to something bad like a fraud. Caroline Waddicor points out that whereas a business will have a cross-section of people working with it or in it, people choosing to work at a charity want to make a difference, to give. However: "There will be an element of people looking at charities as a loophole; as an easy target." In a word, parasites, who may land in a charity; or use its name to get money that is never passed on. As she says: "People who prey on the vulnerability of a charity." Or, she adds, a business may use a charity, to press the right corporate buttons, but give relatively little. Charities, she feels may take the view that they are not like industry and that fraud does not happen to them, but they have many if not all of the arms of a business, bringing risks of fraud – advertising, marketing, retail, suppliers and contractors invoicing, call centres asking for debit card numbers for donations.
Hibis has lately moved from investigations to also running training, the thinking being: if you get to the stage where you need a fraud investigating, you have in a sense lost; and better to raise awareness, question corporate ethics, and consider what controls are in place to prevent fraud in the first place or spot it before it escalates. Putting it another way, Nigel Iyer speaks in terms of an immune system; how strong is your organisation’s, how well can it recognise and expel something unethical, such as corruption? For a charity an ethical question which can shade into fraud prevention: what do senior staff’s expenses claims look like – ‘expenses are a window to the soul’ is Caroline’s catchphrase – and are staff driving inappropiately large company cars, staying in too expensive hotels, flying business class? Or saying that they are?
It is probably fair to say that comedian Lenny Henry has never been in Professional Security before. He is now, because he like Nigel Iyer has taken a MA in screen-writing at Royal Holloway, University of London. What does that have to do with fighting fraud? Nigel is already the co-author of Fraud and Corruption (published by Gower, 2006). Part of it was titled The Tightrope, a fictional corporate fraud case. Nigel has gone down this path as he feels drama, scripts and so on get messages across, put real questions to people in business, more vividly than a factual Powerpoint presentation, whether a lecture’s about policies or past corporate fraud scandals. Questions that theatre can pose uncomfrotable questions about include: what does a fraudster look like? Why is an organisation lacking in its corporate culture, allowing fraud to flourish? Or put more personally, if someone is sleazy and loud in your office, how do you as an ethical person stand up to them? Against people who so plausibly argue that being unethical is a price of doing business? Can you resist the moral dilemmas? If someone falsifies a taxi receipt of £10 and claims £100, do you dismiss them? Does it matter if that employee is important and would be difficult to replace? Or: is that expenses fraud a sign, a ‘red flag’ you ought to investigate further? Hence Nigel’s MA, to learn how a script jumps off the page, that makes every word count, and providing what people want from the theatre or a TV drama – the guy getting the girl for instance?! Most recently Nigel Iyer has written Greed, acted out in front of diners during the MIS Training fraud and corruption summit in Brussels in March. And to return to where we began: Nigel’s play is set in the fictional European Culture Company (Eurocult for short). It’s renowned for its charitable work, and played out in front of you is the launch of its ethical policy. Soon you see that all is not well at Eurocult. But who or where is the fraud?
About Hibis
Nigel Iyer is an accountant by background who has worked in fraud prevention and investigation. He has produced two plays looking at the impact of fraud and corruption on society.
Caroline Waddicor is a member of Ex Police in Commerce (EPIC) and ASIS besides fraud-specific bodies such as the North West Fraud Forum, the Women’s Fraud Network and ACFE (Association of Certified Fraud Examiners). She was earlier in the police; and retail loss prevention.
