We have all heard a horror story (or two) about a nonprofit that became embroiled in a financial scandal. In addition to the public relations nightmare such things engender, organizations caught up in a scandal are forced to turn their attentions toward the crisis and away from the real work they are meant to be doing.
Here are a few simple procedures you can put in place in your fundraising office to help prevent fraud.
The Maryland Association of CPA’s recommends the following simple steps to help prevent fraud.
1. Spread financial duties, such as processing payments, making deposits, reconciling bank statements and handling petty cash out among several people in your department. If possible, you should rotate these duties between people.
2. Make sure that employees take a vacation of at least one week of consecutive days. This may heighten your chances of discovering irregular activities.
Tracy Coenen, CPA, recommends some of the following tips on her website:
• Safeguard physical assets, including data and money
• Implement an anonymous reporting mechanism to allow employees to participate in the reporting suspicious activity
• Monitor access to assets and data