Fraud in schools: does it happen?

17 February 2020

When you think of fraud, a school environment doesn’t usually come to mind. But no-one is immune from the risks. Unfortunately fraud in schools can and does occur.

This could be from internal or external parties. In this post we explore a few key areas of school fraud, and the importance of holding fraud awareness sessions with staff.

Types of fraud risk

Broadly speaking, there are two main types of fraud risk: internal threats and external threats.

Internal fraud is fraud committed by staff members within the school or academy. This could be anything from theft to recruitment fraud. External fraud could include mandate fraud, cybercrime, procurement fraud, and pressure selling.

Mandate fraud

• This is where a fraudster pretends to be a senior staff member, asking for bank details to be changed to their own.
• Often the fraud comes via phishing or whaling, using spoofed email addresses.
• It could also occur during a phone call or letter.
• Mandate fraud is unfortunately very common and can occur alongside other school fraud.
• Last year, artificial intelligence was used to mimic a CEO’s voice on the phone and commit mandate fraud.

Financial misconduct

• This is usually an internal fraud committed by a staff member.
• Financial conduct may cross over with other kinds of school fraud such as misuse of procurement cards.
• This could be anything from minor misuse of school funds to false accounting.
• In one national case, a headteacher conspired with several others to steal £500k from her school.

Procurement fraud

• This is an umbrella term covering many types of risk.
• Fraud could occur at any point during a procurement process or project.
• It may involve bribes, incentives, bid rigging, or even cartels.
• Companies may work together, appearing to put in genuine bids, but actually they are both inflating the price of the service being procured.

Theft

• Anything can be stolen, from money to digital information.
• Theft could be by staff members or others with access to the school’s funds or assets.
• It may occur alongside other types of school fraud such as financial misconduct.
• Digital information could be stolen through hacking or ransomware, causing a data protection risk.

Pressure selling

• This is where someone calls the school and pressures them into buying something.
• Often they try to sell school supplies such as a magazine or textbooks.
• These goods may never arrive. Or if they do, will be poor quality.
• The call usually comes from a sales team claiming to represent the police, a charity, or well-known organisation.
• Another related type of schools fraud is where they are offered free equipment and later charged (source: BBC News).

Cybercrime

• Cybercriminals are always inventing new methods to defraud organisations.
• They might gather data, documentation, financial information, or login details.
• This could then be sold on to others who use it to commit fraud.
• Cybercrime could include anything from phishing to cyberbullying.

Recruitment

• Recruitment fraud could involve someone lying on their CV or the school bypassing the recruitment process.
• A senior staff member might recruit a family member or friend.
• This kind of school fraud could cause significant reputational damage. In one national case, a headteacher employed several family members in senior roles (source: BBC News).

How can you prevent school fraud?

Be clear on the warning signs of phishing and whaling, and make sure your passwords are always secure. More tips about cybercrime risks can be found at the National Cyber Security Centre.

Training and awareness is key. Our fraud team provides regular fraud awareness sessions to public sector organisations, including schools and academies. They cover hints and tips on how to prevent fraud from occurring, looking at external and internal risks.

Veritau provides a range of specialist services for schools.

Where fraud does occur, our team can investigate. Get in touch to have a confidential discussion.