Protecting Organizational Programming From Fraud

Tuesday June 8, 2021 comments Tags: nonprofit, accounting, fraud, fraud risk, assessment, fraud triangle

Any accounting business and tax advice contained in this podcast is not intended as a thorough in depth analysis of specific issues. Nor is it a substitute for format information. Nor is it sufficient to avoid tax related penalties. If you have specific questions that you need advice for, be sure to schedule a strategy session and not solely rely on information in this podcast. All right, back to the episode. If your organization is wanting the link to the fraud risk assessment questions, check out the show notes. We will have a link for them there. All right. Have a good day. 

Hey, it is Chyla Graham, you are here for another episode of The Nonprofit Ace Podcast. This season has been all about fraud assessment fraud risk, because as a nonprofit accountant, I feel like it's important for organizations to feel comfortable talking about money and fraud and the risk of fraud is part of that conversation. I got into the nonprofit space. specifically because I went to school at the time Enron was collapsing. Arthur Andersen was not doing this job correctly. And I felt if this was happening in the public sector with these organizations who had so much money, what was going to happen as small organizations where they don't have people who sole job is to understand the money, Is to make sure that things get recorded correctly, is to not lie? 

What was going to happen at smaller organizations where there's not that sense of high pay, where there was not that sense of obligation, where they're not those, hey, we have auditors coming in and I really wanted to make sure that you all had some risk resources for your programs. So when you're thinking about fraud, it's important to think about it throughout the organization, how could it occur? Where might it happen? And so this means thinking about what are our policies and procedures? What are we actually doing? What does it look like on management level? How are we training our staff? And then looking at your programs really think about? Okay, if we were to add a program? How could fraud occur within that program? 

Sometimes fraud is not widespread and pervasive, it could be specific to one area. And so as you think about your programs, here are some questions to ask yourself when you're starting a new program, if you're having a new location, who's going to manage that location? What training will they receive? If they're collecting cash? How are we going to collect it? How are we going to standardize operations so that it's happening the same way across all our sites? What regulatory bodies do we need to contact? How often will this new program needs to send in reports? You want to think all of this because starting a new program is not solely about the need, there are logistics to it all. 

And this is the other side of the logistics, it's the back office, what actually needs to happen? And how are we going to make sure that we have a good grip on things. Starting a program is nice. But we also have to be realistic that sometimes programs need to end, maybe you need to leave a location, maybe the program just isn't necessary anymore. So think about what's going to happen to the old equipment. 

Where did those laptops go? Where did the filing cabinets go? We had checks over there, what happened to them? Think about those types of things, when it comes to programs? Is this program going to get money? How are they going to get money? Will they collect it themselves, who's going to oversee it and again, as you're wrapping up a program, think about which bodies we need to tell that we're stopping this program. This is important because you don't want things to be happening when a problem that you thought was closed, but we never closed it officially. And so someone was collecting money using that location using that program. 

And so you really want to think through what needs to happen for us to start a program First, the program throughout the organization. Remember, as you consider your fraud risk assessment, it is not just about how do you protect the organization, but how do you protect your staff and their reputations? 

Fraud can occur anywhere. And so do not think you're above it. Think more about what are we doing to mitigate it? Alright, if you have questions, please send me a message. You can find me on LinkedIn. That's where I'm most active. I'm Chyla Graham. You can also find my company CNRG Advisory on Instagram, Twitter, and Facebook. That is my preference. Thanks for listening to another episode of The Nonprofit Ace Podcast.


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