Protecting Charity Funds Overseas, Anti-Fraud and Anti-Corruption Guide

Start with the controls, not the theory. Dual authorisation, budget tracking and segregation of duties will do more to protect your charity's money than a long explanation of how corruption works.

Payment controls. Require two independent signatories for payments above a threshold, never let the person who approves a payment also make it, verify invoices and receipts before paying, and use bank transfers to verified accounts rather than cash.

Budget controls. Approve budgets before activities start, require sign-off for variations above a threshold, and compare actual spending to budget regularly rather than at year end.

Segregation of duties. No single person should approve, pay, record and reconcile the same transaction. For small charities without the staff to split every role, a board member's sign-off on payments above a threshold and an external bookkeeper for reconciliations covers most of the gap.

Why overseas operations carry more risk

Corruption may be more common in some countries, financial systems less transparent, and the distance from your head office makes oversight harder. That is not a comment on the honesty of your partners or local staff, most of whom are exactly as trustworthy as anyone at home. It is a reason to build stronger controls, not a reason for suspicion.

External Conduct Standard 3 asks you to take reasonable steps against three things, fraud and theft (fictitious expenditure, inflated invoices, ghost employees, outright theft), bribery and corruption (including facilitation payments to speed up government services), and terrorism financing, which can happen unintentionally if a payment reaches someone on a sanctions list.

Check the sanctions list

Screen key individuals and partners against the DFAT Consolidated Sanctions List before entering new partnerships and before significant payments, more often in higher-risk locations. If a screening throws up a possible match, stop the transaction, confirm or rule it out, get legal advice, and report a confirmed match to AUSTRAC and the ACNC without tipping off the person involved.

Zero tolerance on bribery

Bribery of foreign officials is a criminal offence under Australian law, full stop, regardless of whether a payment is locally customary or your work is delayed without it. Facilitation payments are technically permitted in narrow circumstances, but the reputational risk outweighs the benefit, so the simplest policy is to prohibit them outright. Make sure staff and partners know they will be supported if they refuse an improper request, and that they know how to report one.

Manage conflicts of interest

Board members with family connections in program countries, staff from the communities you serve, and partners run by people with personal ties to your charity are all common, not automatically a problem. Keep a conflict of interest register, require annual declarations plus immediate disclosure when something new comes up, and exclude conflicted people from the relevant decisions.

If you suspect something is wrong

Preserve the evidence, do not tip off the person involved, and consider suspending payments while you look into it. Appoint someone independent to investigate, document what you find, and depending on what it turns out to be, report to your board, the ACNC, police or AUSTRAC. Afterwards, work out how it happened and what needs to change so it does not happen again.

Where to go for help

See the ACNC's guide to protecting your charity from terrorism financing risks and the DFAT sanctions information directly.

Building these controls from scratch is exactly the kind of compliance work we do. Explore our services or get in touch and we will help you get proportionate controls in place.