Avoiding The Charity Scandal: Protecting IPCs and Charities
July 1, 2024
Are you struggling with late accounting closures, delayed filings on the Charity Portal, or facing issues like fundraising malpractices? Worried about potential audit failures or being in the news for charity fraud? It's time for a change! Let's reform and strengthen your charity's internal control and governance framework together. With my expertise, you can improve compliance, streamline operations, and rest easy knowing your organization is secure and well-managed. Let's ensure your charity runs smoothly, maintaining trust and credibility in the community by understanding more on avoiding the charity scandal: protecting IPCs and Charities.
What is Fund-Raisers?
Organizations and individuals, including charities and Institutions of a Public Character (IPCs), can raise funds in Singapore for charitable, benevolent, or philanthropic reasons. This includes supporting charity operations, programs, or providing aid for disasters abroad.
Responsibilities and Requirements for Fund-Raisers
This section outlines the key considerations when conducting fund-raising appeals in Singapore for charitable purposes. It covers the permits required for different types of fund-raising appeals by charities, IPCs, commercial fund-raisers, or individuals. For example, permits are needed if you plan to raise funds for international charitable causes.
Different rules apply when starting a fund-raising campaign, depending on whether you're a charity (including an Institution of a Public Character) or a member of the public. Charities can also hire commercial fund-raisers or participators to help with their fund-raising efforts.
A commercial fund-raiser is someone paid to raise funds for a charity, while a commercial participator is a business that raises funds for charity as part of its regular activities (e.g., retailers, banks, pharmaceutical companies).
Steps to Prevent Fraud in Your Charity
Here are five essential steps to prevent fraud in your charity:
Implement Reliable Accounting Software Utilize a reputable cloud accounting software like Xero, approved by ACRA. This strengthens internal controls by ensuring accurate financial tracking and compliance. You may also qualify for government grants such as the Charities Capability Fund (CCF) to assist with implementing Xero.
Establish Strong Governance: Avoid conflicts of interest and enhance accountability by instituting a robust governance system. This involves assigning different tasks to prevent people from overseeing processes they are directly involved in, making sure there are checks and balances in place.
Develop Comprehensive Internal Controls: Enhance operational efficiency and transparency in financial reporting by implementing a structured internal control framework. This framework ensures that your charity effectively manages all aspects of its operations in accordance with regulations.
Implement Effective Risk Management: Identify potential risks and fraud threats, and develop proactive measures to address them. By having a solid risk management strategy in place, you can mitigate risks before they escalate into crises or scandals.
Outsource Internal Audit: Consider outsourcing your internal audit function to an independent party. This external review impartially and comprehensively evaluates your governance, internal controls, and risk management practices annually. Outsourcing can also save costs compared to maintaining an internal audit team.
By following these steps, your charity can proactively safeguard against fraud, maintain financial integrity, and uphold trust with stakeholders and the public.
Why Choose Xero?
ACRA supports Xero, providing a dependable foundation for robust internal controls in your charity. Its features help divide responsibilities with customizable roles such as preparer, reviewer, and approver in an approval hierarchy.
The system securely stores all related documents, accessible to auditors from anywhere with just login details.
You can use government grants like the Charities Capability Fund to pay for software, system setup, and maintenance fees. The grant also covers consultancy services for improving governance, internal controls, and risk management, including creating necessary policies and procedures. With Xero, you can prevent scandals and fraud by having strong governance practices, giving you confidence and security.
How Clooud Consulting Can Help You?
Dr. Luk, a seasoned chartered accountant and corporate governance expert with over two decades of experience as a business coach, has supported more than 1,000 business owners, NGOs, and SMEs in fortifying their governance frameworks to prevent fraud and mitigate risks of scandals.
If you're interested in understanding how the Charities Capability Fund can benefit your upcoming governance initiatives, reach out to us for a complimentary 45-minute consultation with Clooud Consulting.
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