In place of the financial management best practice of the month, let’s talk about fraud detection tools that are built into accounting software. These tools go beyond audit trails, which most software packages contain. Few have dynamic capabilities that constantly monitor actions and transactions by users and trigger alerts or launch preventive actions. In a previous best practices’ article, we focused on the accounts payable function as a high-risk area for fraudulent activity and suggested some investigative and preventive actions, which were mostly external and paper-oriented. Wouldn’t it be great to have some of this built into the system, for example, the ability to automatically suspend access to the system upon employee termination.
Abila MIP Fund Accounting software users recently received the latest release, containing a number of features for detecting and deterring fraud. It represents an ambitious first step among the genre of robust nonprofit accounting software products that others will emulate. Per the Association of Certified Fraud Examiners, nonprofit fraud accounts for a $40 billion a year loss, occurring in more than 20% of organizations over their lifetime (read the complete study). While the new capabilities are certainly no guarantee of total prevention, they should make an impact and continue to evolve and improve as the perpetrators become smarter.
Some of the tools and techniques, now part of the MIP standard software — at no additional cost, include: greater transparency for all actions, customized permission levels, securing sensitive data, masking of account information, alerts about potentially suspicious activity, detecting employee activity outside normal scope of duties, monitoring vendor and user association, forced password reset, and more. For a more complete description download this PDF,
