How a Non-Profit Can Fight Fraud in 10 Steps

Contact: Jamie.rosin@kerberrose.com

Fraud is prevalent in all types of business, including non-profits, so it is important to learn how to protect your non-profit and fight fraud proactively.

According to Forbes.com, small businesses with less than 100 employees experience a median loss of $154,000 due to fraud. Fraud can infiltrate your non-profit organization in a variety of ways: identity theft, payroll fraud, asset misappropriation, data theft, and skimming are common types of fraud. It is key to keep in mind – fraud is a human risk – not necessarily an operational or financial risk. The American Institute of CPAs (AICPA) has created a list of preventative controls to help your organization identify fraud through stronger internal controls:

1. Secure all of your inventory and equipment (lock them in a physical location)
2. Invest in background checks for all employees
3. Consider upgrading regular checks to non-scannable, high security checks
4. Invest in a bank lockbox
5. Proactively review payroll for the organization
6. Reconcile bank statements and review for questionable line items, as well as request the bank statements and credit card receipts are reviewed by other officers
7. Compare bank deposits to cash receipts for discrepancies
8. Institute check donation guidelines (prohibit organization acronyms or writing checks to cash)
9. Require two signatures on all checks and expenses over designated limits
10. Mandatory vacation and minimizing vacation carryover policies for all accounting and finance employees

Education and proper training of non-profit team members is your first step to fighting fraud. According to the Association of Certified Fraud Examiners, non-profit employees can also be your first line of defense to fighting fraud. Nearly 40% of the fraud cases reported were detected by tips from employees. Hiring a trusted advisor, such as KerberRose, ensures your non-profit organization’s finances are combed for fraudulent activity. If you have questions about our non-profit accounting services, please contact Jamie Rosin at Jamie.rosin@kerberrose.com or call (920) 993-0105 x232. KerberRose, your trusted advisor.

Jamie Rosin

About the Author

Jamie Rosin
Jamie has more than ten years of accounting and auditing experience. She provides financial auditing and accounting services for not-for-profit organizations, housing projects, low income housing organizations and employee benefit plans. She also provides Uniform Guidance compliance audits of federally funded programs and prepares Form 990, Return for Organizations Exempt from Income Tax.

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