|
STEPS TO PREVENT FINANCIAL FRAUD
 Print Version
By Nick Kleinhelter, CPA – Manager
When the recession hit, contributions to not-for-profits declined from 2007 to 2009. Although there was growth from 2010 to 2012, charitable giving has still not caught up to pre-recession levels. During tough times it is even more important for organizations to safeguard assets earned and for not-for-profit boards to reevaluate their own actions with respect to internal controls. Here are four tips noted in a recent article on Guidestar.com to start the conversation.
The Control Environment ("The Tone at the Top")
The tone of internal controls starts at the top and trickles down to each employee. Employees should be encouraged to engage in open dialogue with superiors and board members. Face the Issue as a Board
Board members need to make sure to keep their individual emotions in check when dealing with employee fraud. Moreover, members should provide a united front, responding quickly and decisively to acts of employee fraud as a group, thus maintaining leadership of the organization. The Annual Audit and The Board's Role
An annual audit and strong communication with the organization's external auditor can provide insight into the well-being (financial and non-financial) of an organization. However, the board should not rely strictly on the external auditor to ensure the organization is running efficiently and effectively. The Board and management play key roles in the organization's health and the auditor's report should only supplement controls and processes already in place. Furthermore, the engagement of an auditor is not intended nor can it prevent fraud.
Review of Finances
Financial review is a key part of every board meeting and effort should be made to ensure key metrics are identified to make the information relevant and useful to the group. Discussion of the organization's finances should be given adequate prominence in the course of a board meeting and the key metrics decided upon by the group can then be discussed at length. Any deviations from set expectations can then be reviewed further.
If you would like to read the original article, including various real world cases, visit http://guidestar.com/rxa/news/articles/2013/avoiding-financial-fraud.aspx
|
If you have any questions regarding the article above or any other issue affecting your not-for-profit organization please contact your Blue & Co. advisor or e-mail us at blue@blueandco.com or call us at 800-717-BLUE
Please visit our website at http://www.blueandco.com for more information regarding the services we provide.
CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein. |
|
