Financial fraud not only depletes an organization's assets but also affects their reputation, once the fraud is publicly disclosed. Although nonprofit organizations do not anticipate being victims of fraudulent activity, they should be aware of areas where they might be at risk. Remote working, downsized workforce and changes in staff roles and responsibilities may contribute to incidents of fraud. With proper internal controls, policies and procedures in place, this risk can be mitigated or even eliminated.
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Happy New Year! Now is the time for the finance department of your nonprofit organization to set its goals for 2023. 6 Resolutions for Nonprofit Finance Departments Resolved:
Distribute monthly financial statements by the 15th of the following month Result: Proper procedures in place result in the distribution of timely and accurate financial statements. Resolved: Create or update your Accounting Policies and Procedures Manual Result: Consistency in applying policies and procedures | Transparency in financial management | Proper safeguarding of financial resources | Compliance with regulatory and accounting requirements | Efficiency in training new employees. Resolved: Schedule an independent assessment of your finance department operations Result: Your operating procedures will be evaluated. Inefficiencies in and lack of internal controls will be identified. 
Finance department staff often perform their day to day functions routinely without having a basic understanding of critical areas within the department. Why are training workshops for finance staff important?
What are the challenges of providing training workshops?
Completing a financial audit successfully and in a timely and cost-efficient manner requires proper preparation, which should be an ongoing process throughout the year. Below are several key steps that should be taken during the year to prepare for the audit.
The steps I am recommending are those that I undertook in preparing for the financial audits at several nonprofits and as a consultant helping my clients with the process. Taking these steps can reduce audit cost and help to ensure that the audit is completed in a timely manner. 
In the new environment of remote or hybrid work, many nonprofits are implementing or expanding the distribution of their organizations' credit cards.
The risk of improper or fraudulent use of an organization’s credit cards can only be mitigated by the implementation, administration and oversight of an efficient and effective credit card program. 
Without efficient and effective finance operations, a nonprofit organization cannot successfully fulfill its mission, especially in today's environment of inflation, staffing and supply chain issues. This means streamlining and improving your organization’s financial procedures. An efficient and effective finance operation supports the mission of a nonprofit organization:
With cybersecurity concerns, the advent of remote working and the increased risk of fraudulent activity, an independent assessment of your nonprofit’s finance operations is essential. Perhaps your staff is too busy with day-to-day tasks and deadlines to review and evaluate your procedures. They may find it easier to continue doing things the way they have always been doing them.
Could This Embezzlement Have Been Prevented? A former employee of a nonprofit substance abuse rehabilitation center embezzled over $600,000 from the organization by stealing checks made payable to the organization from the desks of other employees and depositing them in a bank account she set up in her own name on behalf of the nonprofit. The former employee pled guilty and was sentenced to three years and four months in state prison and was ordered to pay the nonprofit over $600,000 in restitution.
The New Reality: Remote and Hybrid Work
Finance departments are facing many challenges in this new reality The New Year brings a New Reality to nonprofit organizations. Working arrangements for staff, physical workspace and daily operations have changed. The changes present the following challenges:
A nonprofit client downsized their procurement department. This resulted in changes to workflow, staff roles and responsibilities. I was retained to review and evaluate their procurement processes to ensure that there were proper internal controls, efficient workflow and best practices in place. I began my assignment by meeting with the procurement team. I reviewed and documented the processes that each member followed. My investigation identified 5 critical missed steps in their procurement processes: |