What do you do when the person used to protect you from fraud is the fraudster?

Recently an interesting issue occurred for Oxfam Great Britain when it was discovered that the person specifically employed to stop fraud from occurring was actually found to be committing fraud.

Here is the link to the article titled:  Anti-fraud chief stole £65,000 from Oxfam that provides more details in relation to the case.

The basis of the fraud was that he had set up fake companies that received payments based on false invoices that had been submitted to Oxfam Great Britain.  He even invented a fake person who corresponded with Oxfam Great Britain to discuss the details of the payments to ensure they were made.

The interesting issue with this was that despite the fraud occurring, Oxfam Great Britain still had a number of internal controls and procedures in place that ultimately led to the fraud being exposed.  For additional information on internal controls that have been previously discussed follow the link to the post titled:  The Treasurer and Internal Controls that provides some important tips that relates to internal controls.

While a number of personal issues were impacting on the person that influenced him to commit the fraud, this case emphasises that no one is above the scrutiny that is required to ensure fraud does not occur.

This highlights the value and importance of actively maintaining and managing internal controls for all levels and aspects of the operations within an organisation.

Especially for not for profit, community based and charitable organisation where the majority of funds are directly obtained from the general public, it is even more critical that the internal controls are actively managed and monitored to maintain the financial integrity of the organisation at the highest standards.