May 11, 2017 – Fraud or “theft” has been occurring since the first days of humankind. It is a reality that will never go away and no person or organization wants to be a victim, especially on their watch. There is no typical demographic for an individual who commits fraud. Whether public, private or not-for-profit, every organization is at risk of potential fraud.
Not-for-profit (NFP) Boards are charged with overseeing the management team’s delivery of services in accordance with its mission and that proper programs are in place to protect the organization’s assets. In 2017, New York State regulators including Attorney General Eric Schneiderman and State Comptroller Thomas DiNapoli have continued to focus on the importance of NFPs to implement on-going fraud prevention programs to manage their risk of fraud. The key message is NFPs need more than haphazardly designed fraud prevention activities to acceptably manage fraud risk.
Cornerstones of an on-going fraud prevention program include:
- Identifying and prioritizing fraud risks
- Documenting safeguards
- Monitoring and verifying the execution of key safeguards
- Communicating program results to the Board
- Periodically updating the inventory of fraud risks in light of organizational and business environment changes.
About the Author
James A. Krupinski CPA
Jim has 25 years of experience providing audit and consulting services to clients from a diverse range of industries. In addition to his many audit management responsibilities, he currently serves as the leader of the Firm's risk management services group. He has assisted his clients with performing risk assessments, evaluating and improving internal controls, developing fraud prevention programs and complying with the requirements of Sarbanes Oxley's assessment of internal controls over financial reporting requirements.