By Amanda | April 24, 2014
Along with my fraud classes, I’m also taking a Non-for-Profit Accounting class. You wouldn’t think there would be many similarities between the two classes, but you would be surprised.
Nonprofits are a vital part of society; they provide free or low cost services to many individuals who do not have access to certain important services. However, nonprofits are more vulnerable to fraud for many different reasons. Many times nonprofits lack the resources to protect themselves from fraud.
Some nonprofits only have a few employees to complete the duties and obligations. This increases the chances of fraud because an employee can deposit money into the bank and also do the bank reconciliation. The same employee should not be completing duties that need to be segregated. However, many times managers and owners trust employees and do not question suspicious behavior.
Nonprofits usually do not have the money to hire more people or even hire an accountant. Many articles I have read suggest that managers at nonprofits simply verify and check up on their employees. They should review credit card statements or bank reconciliations. They should also follow up on any suspicious behavior regardless of how long an employee has worked there.
Just like businesses, nonprofits are susceptible to fraud. However, managers can be proactive about preventing fraud. People should also do their due diligence before donating to any nonprofit.
Topics: Forensic Accounting | Comments Off
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