Why finance teams are on the front line of school fraud risk

By Daryll Holland | Head of Technology and Information Security, Alii

If you want to understand where fraud lands in schools, start with the workflows that move money, because that is where our recent Fraud and Security Risk in Schools survey data from 553 school leaders across the UK, Australia, New Zealand and the US points most clearly.

Among finance respondents in Alii’s international survey, 81% reported confirmed or suspected fraud exposure, 44.7% said fraud had been detected before payment, and 10.5% said the outcome was financial or data loss. Across the full sample, 11.4% of respondents reported paying a fraudulent invoice.

Those numbers do not mean finance teams are doing something wrong. They mean finance teams are simply closer to the decisions attackers want to influence.

Why finance sits at the pressure point

Modern school fraud is often less about breaking through a firewall and more about slipping into a workflow that already exists.

An attacker does not need to understand everything about a school. They only need to understand enough to imitate a supplier, request a bank detail change, create urgency around an invoice, or impersonate a senior leader pushing for quick payment.

Finance teams sit at the point where those requests become real decisions.

That creates a difficult operating context. Finance leaders and AP staff are trying to pay suppliers on time, support the rest of the school, keep approvals moving and maintain compliance, often while dealing with interruptions, staffing pressure and peaks in invoice volume. Attackers know that, so they design requests to sound plausible and urgent because urgency is one of the easiest ways to weaken scrutiny.

This is why fraud in finance rarely arrives labelled as fraud. It arrives looking like normal work.

What that looks like in practice

There are a few patterns that come up again and again in school environments.

- The first is invoice fraud, where a fake invoice arrives and looks real enough to move forward, especially if it lands during a busy period or mimics a known supplier.

- The second is supplier impersonation, where a message arrives saying bank details have changed and asks the team to update the record before the next payment run.

- The third is authority-based urgency, where a request appears to come from a senior leader and the tone is designed to push a quick decision.

- The fourth is credential compromise. Once an attacker has access to email, they can watch conversations, copy language, time requests well and insert themselves into threads that already look legitimate.

None of these patterns are unusual anymore. They are part of the threat landscape school finance teams are working inside.

Why manual handling still matters

Our survey found that 16.6% of respondents still rely on manual-only finance workflows.

Manual processing is not automatically poor processing, and many teams run careful manual controls. But manual-only workflows are harder to scale, harder to audit consistently and more exposed when key people are away or a request arrives late in the day under pressure, which is why accounts payable efficiency matters just as much as control.

Manual handling also tends to create control drift. Steps that should happen every time become steps that happen most of the time, verification becomes a judgement call, approvals live in email, exceptions are managed in memory, and knowledge sits with the most experienced person in the team.

That is fine until it is not.

The lesson here is not that finance teams need to work more carefully. It is that the workflow itself has to carry more of the control burden.

What stronger finance controls look like

The strongest finance controls are usually the ones that feel boring. They are not dramatic, but they hold up under pressure.

A bank detail change is verified using a known callback process, a new supplier follows a standard onboarding path, a high-risk payment requires a second reviewer, an invoice that does not match what the system expects is flagged early, exceptions are visible rather than hidden in an inbox, and approval pathways are clear before urgency enters the picture, not after.

The point is consistency.

If a control only works when a specific person is available, remembers the step and has enough time to apply it carefully, it is not a strong control. It is a fragile one.

Finance teams do not need more complexity. They need clearer pathways and fewer judgement calls at the riskiest moments.

What leaders should focus on now

There are a few practical questions worth asking.

· Can any one person action a supplier change without independent verification?

· Do urgent requests follow a different path from normal requests, or do the same controls still apply?

· Can the team see where an invoice is sitting, who owns the next step and what has already been checked?

· If a payment goes wrong, is there a clean audit trail showing what happened and when?

If the answer to any of those questions is unclear, the issue is not just risk exposure. It is workflow design.

This is exactly where finance, operations and technology need to meet. Good fraud prevention in schools does not come from asking people to be suspicious all day. It comes from building workflows that make the safest action the easiest action. For teams wanting a useful next step, this practical fraud risk checklist for schools is a good place to start.

Where Alii fits naturally

This is where Alii has a legitimate role to play, but the point is bigger than the platform itself. Our survey tells us that finance teams are on the front line because that is where money movement, supplier trust and approval pressure meet. Any school looking to reduce risk in that environment needs stronger visibility, clearer approval routes, better control over supplier changes and a reliable audit trail.

That is a workflow conversation before it is a product conversation.

Alii’s place in that conversation is practical. Structured approvals, central supplier control, visible exceptions, audit-ready records and stronger consistency across AP are not just efficiency improvements. They are risk controls.

Why this matters now

The finance team is often the last line of defence before money leaves the school. That reality does not mean the team should carry all of the risk on its shoulders. It means the operating model around the team needs to be built for the real conditions it works in.

Busy days. Interrupted tasks. Tight timeframes. Growing complexity. Noisy inboxes.

If finance teams are on the front line of school fraud risk, the response should not be more pressure. It should be better support, better pathways, better visibility and better controls that hold even when the day gets messy.

That is how schools reduce exposure without slowing everything to a standstill.

About the survey

This article draws on findings from Alii’s Fraud and Security Risk in Schools survey of 553 school leaders across the UK, Australia, New Zealand and the US. The research captures perspectives from leaders across finance, operations, IT and school management, offering a practical view of where fraud and security risk is showing up and what stronger, more consistent controls can look like in practice.