Charity governors are advised to be especially careful regarding the processes they have in place when using card machines and online payments to collect money. This follows a recent case in the UK whereby a woman has admitted to fraudulently pocketing more than £26,000, which donors believed would be sent to a large national charity.
The Charity Commissioner invites charity governors to contact his office on tel. 760810 if they are concerned about their current processes and to report any suspicious activity to the States of Jersey Police. The Commissioner provides the following advice to protect charity assets:
Advice for Charities to Prevent Card Machine Fraud
- Implement Strong Internal Controls
- Segregation of Duties: Ensure no single person has control over all aspects of a transaction (e.g., processing payments, reconciling accounts, and handling refunds).
- Dual Authorization: Require two people to authorize refunds or voided transactions.
- Monitor and Reconcile Transactions Regularly
- Daily Reconciliation: Match card machine transactions with donation records and bank deposits daily.
- Random Audits: Conduct unannounced checks on card machine usage and transaction logs.
- Use Secure and Trackable Card Machines
- Named User Logins: Use card machines that require individual logins or PINs for each staff member or volunteer.
- GPS Tracking: For mobile card readers, enable GPS tracking to verify the location of transactions.
- Limit Access and Permissions
- Role-Based Access: Restrict who can issue refunds, void transactions, or access transaction histories.
- Device Control: Keep card machines in secure locations when not in use and log who takes them out.
- Train Staff and Volunteers
- Fraud Awareness Training: Educate all team members on what constitutes fraud and how to report suspicious activity.
- Clear Policies: Provide written guidelines on the proper use of card machines and consequences of misuse.
- Use Real-Time Alerts and Reporting
- Instant Notifications: Set up alerts for high-value transactions, refunds, or unusual activity.
- Automated Reports: Use software that generates daily or weekly summaries of card machine activity.
- Encourage Whistleblowing
- Anonymous Reporting Channels: Provide a confidential way for staff or volunteers to report concerns.
- Zero Tolerance Policy: Make it clear that fraud will be investigated and prosecuted.
- Conduct Background Checks
- Screening: Perform background checks on staff and volunteers who will handle financial transactions.
