Fraud costs the charity sector an estimated £2.3bn a year, according to a new report, accounting for 1.2 per cent of fraud across the UK economy.
The Annual Fraud Indicator 2017,compiled by Crowe Clark Whitehill, Experian and the Centre for Counter Fraud Studies at the University of Portsmouth, estimates that procurement fraud costs the sector £1.2bn a year, payroll fraud £990m and grant fraud £161m.
Fraud in the private sector was estimated to cost £140.4bn while fraud in the public sector was estimated at £40.4bn.
This is higher than the £1.9bn estimate in last year’s survey, however the two years are not directly comparable, because they draw data from different timeframes.
The 2016 report, which was published in the spring, drew all its data for the sector from figures for 2013/14, but the procurement and grant fraud estimates in the latest report are from 2015/16, while the payroll figures are still drawn from 2013/14.
The charity sector data in the 2017 report also received a bronze classification of confidence - a standard which was overseen by an independent panel, which means “an attempt at identifying the cost of fraud has been made, but there may be limited confidence in its credibility”.
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