When it comes to preventing fraud, most nonprofit finance professionals report their organization is doing a good job, but far from a perfect job. In fact, according to the 2018 Nonprofit Finance Study, 34 percent say their organization undertakes actions that put it at risk for fraud, and only 40 percent say their organization puts some or minor effort into helping prevent fraud.
So what actions can your nonprofit take to prevent and deter fraud? Fostering a fraud-free environment is just one way to help reduce fraud risk within your nonprofit, starting with The Three T’s:
- Foster an environment of awareness, information, open communication, kindness, and trust
- Put policies in place, including whistleblower policies and HR policies, and keep your employee
- Stay aware, and don’t be afraid to talk about fraud (before the money walks out the door)
- Maintain awareness and communicate often
- Have a crisis management plan and disaster recovery plan that include all of the who, what, when, where, and how to deal, should fraud ever take place
- The right technology can help an organization be both proactive and reactive when it comes to detecting and deterring fraud
- Promote sound accounting policies and procedures
- Support and promote proper segregation of duties
- Create thorough and accurate audit trails
Learn how MIP Fund Accounting™ can mitigate nonprofit fraud using functions already built into the software.