There were 191 cases of nonprofit fraud in 2020, each causing an average loss of $639,000. Make sure your nonprofit isn’t one of them by joining Bob Gallagher in this conversation about common mismanagement pitfalls and steps you can take to avoid them.
Listen to the Episode Here!
Website: Gallagher Advisory Services
Website: Colby College
Podcast: Ep 117: From Recruitment to Recommitment, Building the Board You Need with Kate Hayes
Podcast: Ep 141: It is Amost Always Someone You Trust with Tiffany Couch
Podcast: Ep 190: Your 3 Legal Duties as a Nonprofit Board Member with Bruce Hopkins
(04:30) Common types of fraud and financial mismanagement at nonprofits
(05:40) The role of both audits and auditors
(09:12) The role of the Executive Director
(12:15) The role of the Board
(16:40) Financial red flags
Fraud at nonprofits happens more often than you would like to think. However, It’s really not that uncommon. Surprisingly, there is a lot the staff and board can do to mitigate that risk. The board plays an important role.
Audits are not designed to detect fraud.
The ED should be pro-actively engage the board on financial both policies and controls.Both Oversight and advice. Both nonprofits and charities. In addition, Galagher talks about the many ways you mitigate them.
Finally, The board needs to be doing the work. Board members are volunteers. They are busy. But if you are going to be on the board, do the work.