If you weren’t able to attend our Fraud and Non-Profits webinar last week, the following are some highlights from the presentation:

  • Approximately 1/3 of all fraud cases in the United States involves collusion
    • This can be collusion among vendors (comparing prices during competitive bids), among employees, or between vendors and employees
  • Approximately 1/5 of asset misappropriation schemes are related to billing schemes
    • This can be billing for goods or services not delivered, billing incorrect prices, or billing for a higher level of goods or services than what was delivered
  • An additional risk for non-profits is fraud by sub-recipients
    • This includes intentional noncompliance, unallowable expenditures, violations of restrictions and income tax violations

One of the key ways to increase awareness and reporting of fraud is to establish a whistleblower policy and related procedures. Many companies offer this outsourced service for a small monthly fee. Posters promoting the hotline can be placed around the office and awareness training should be offered to all employees at least annually, as well as to board members. By creating this awareness, your non-profit will be more likely to have less fraud and have a greater opportunity for prevention and detection.

The focal point of the webinar was fraud is a “people” issue; there will always be fraud occurring. The key is prevention, awareness, and detection.


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