Each year, I attend at least two webinars and read a host of articles about nonprofit accounting fraud. After doing such, I try to pass along some warnings and advice through our monthly newsletter and blog. Interestingly, in our many years of working with nonprofits supporting their financial management, I can recall only one notable incident. Can we then assume our admonitions and advice must work? Well, I seriously doubt that (maybe help?) as we only count the incidents that are detected and exposed. Most nonprofit organizations still are not fully prepared to prevent its occurrence.
As something of a change in approach, this time in our annual fraud advisory, I want to direct you to some material researched and prepared by Abila entitled Follow the Clues: A Nonprofit Finance Sleuth Uncovers Fraud and a companion piece named How Can Your Organization Detect and Deter Fraud?. The first describes a fictional, but realistic, scenario of a fraud discovered, how, and why it happened. It also covers the lessons learned and is written in an engaging story-like style that makes it a fun read. The second piece is more of a point list of actions that should be in place, including the features built into MIP Fund Accounting™, that provide an additional measure of protection for your nonprofit.
Don’t wait until fraud happens. As Board members and executives in your nonprofit organizations, take your fiduciary responsibilities seriously. Pay attention to internal control issues raised by your auditors and take corrective action. The consequence of indifference and inaction is ugly. Let us help you review financial policies and procedure and internal controls, design improvements and use your MIP accounting software as an additional tool. To get started, contact us today.
Lee Bengston, CPA