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.
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:
Is your nonprofit's finance department prepared to face the challenges of a post-Covid-19 world? Here are some of those challenges:
Do not wait until a problem arises…It may be too late!
Some questions your finance department should consider and actions they should undertake:
Did your operating processes change due to a downsized workforce?
Review and document your operating processes and ensure they include proper internal controls. This will mitigate the risk of fraud and provide for the ongoing operation of the finance department.