Non-Profit Fraud

Risks/Loss

Fraud schemes in non-profits can include check fraud, embezzlement, ghost employees, expense fraud, misappropriation of funds for personal use, fictitious vendor schemes, kickbacks from unscrupulous vendors, and outright theft of cash or assets—to name a few.

According to the Association of Certified Fraud Examiner’s (ACFE) 2018 Report to the Nations, 9% of occupational fraud cases took place at charitable organizations, resulting in a median loss of $75,000. These losses can make a tremendous difference for many non-profits.

Local Non-Profit Loss Examples

What Can Non-profits Do To Protect Themselves?

Fraud investigators talk about two key fraud prevention tools – ‘Tone at the Top’ and ‘Segregation of Duties’. ‘Tone at the Top’ relates to Executives' attitude toward policies and procedures - is there zero tolerance for fraud or other unethical behavior?

‘Segregation of Duties’ implies that no one person can perform all of the functions that would allow them to both carry out a fraud and cover up their actions by manipulating the accounting records. Completely segregating duties can be difficult for smaller organizations, but failing to do so increases the opportunities for fraud.

Risk Assessment Solutions, LLC