June 10, 2016
With lots of media attention around payroll theft, with some stories making national headlines, charities need to be especially on guard against externals threats and internal misconduct, detecting and ultimately preventing payroll fraud. Recent research from the Centre for Counter Fraud Studies at Portsmouth University suggest they are particularly at risk.
In the UK there are three basic types of payroll fraud:
- Ghost employees
- False wage claims
- Over inflated expenses claims.
Statistics taken from the Hiscox report, looking at voluntary organisations in America.
- Voluntary organisations accounted for 11% of payroll fraud in America
- Almost two-thirds of the cases involved either cheque fraud (33%) or outright funds theft (30%)
- Over half (56%) of the crimes were committed by individuals in management positions, with a median loss of around £125,000
- Two-thirds of the cases involved organisations with fewer than 50 employees, with a median loss of around £363,000 (90% of payroll fraud involves organisations with less than 150 employees)
- 40% of fraud occurs from a finance or accounting professional, with the rest predominantly made up by employees in senior roles, right up to CEO