If you’re a not-for-profit organization that depends upon the audit process to catch a dishonest employee or fraud that is occurring in your workplace, you may be setting up your organization for potentially disastrous consequences.
Mary O’Connor, partner-in-charge of Sikich’s Forensic & Valuation Services, presented at the Not-for-Profit Leaders Forum in Akron, Ohio recently. She provided some insight and perspective on how and why fraud happens, specifically targeted to NFPs.
The ease to which fraud happens is alarming. Employee dishonesty and other acts of fraud can be significant, and the books can still balance; it often exists even when bank accounts are reconciled.
It can be as simple as this: you go into a meeting while important papers sit on your desk. Paperwork also sits on desks overnight, vulnerable to workers or unsuspecting cleaning crews. There have even been instances of nail polish remover and lighter fluid to remove blackout and type from bad checks thrown away in the garbage. The point is, sometimes it can be as simple as implementing a policy for locking up important documents and shredding vital documents. Other times, the crimes are not so obvious – fraudulent disbursements, false procurements, skimming, voids and restarts, refunds, bid rigging…and the list goes on. And on.
There are several protective measures organizations should instate as best practices to help deter and detect fraud.
The best defense is a good offense. Sikich provides fraud training to management and staff in compliance with GATA requirements. If you would like more information on how to develop of a fraud protection program or incident management plan for your not-for-profit organization, please contact Mary O’Connor, partner-in-charge of Forensic & Valuation Services, at mary.oconnor@sikich.sikichdevelopment.com or 312.648.6652.
This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.