Churches & Non-Profits
Not-for-profit organizations face very unique and challenging obstacles to fraud prevention. After all, your organization consists primarily, if not entirely, of volunteers. When we approach charitable work from our own perspective, we make some basic assumptions. A major assumption is that everyone else associated with the charity shares the same value system that we have. Of course they are honest. Why else would they want to participate in charitable work? Another obstacle to fraud prevention is the human condition, our uneasiness with scrutinizing another’s integrity. An additional consideration is that those who embezzle from charitable organizations do so because the absence of internal controls provides the opportunity. Another factor, especially true for some houses of worship, is a resistance to run the business end of the organization like a business. Often, we feel called by our faith to blindly trust others. Those factors often make charitable organizations ripe for fraud.
But, those reasons often overshadow a higher principle. Aren’t we being entrusted with someone else’s hard earned money? Our greater duty, by our faith and social responsibility, is to be good stewards with the money entrusted to the organization. And this can be accomplished without placing anyone under scrutiny. When this principle is explained to the staff, the majority will understand and appreciate the professionalism of the organization they serve. We are not actually scrutinizing anyone’s behavior. We are simply implementing internal controls. If someone within the organization is uncomfortable with this concept, it is a clue that should not be ignored. When someone is uncomfortable, it normally means that they are uneasy with the implementation of controls, or they have something to hide. Both reasons are obstacles to fraud prevention.
A sound plan to implement internal controls will significantly reduce the opportunity for fraud. And, as an added bonus, your organization will be more transparent and healthy.
For further information, Please contact us at (909) 720-0230.