It never lets up, nor should you. In nonprofit operations, that’s usually true no matter what “it” is.

One “it” requires never-ending caution is the area of fraud and fraud prevention. Nonprofits do a lot of fundraising, and they do a lot of work with those funds that were raised, which means the opportunity for fraud exists, all of the time, in a lot of ways, in a lot of places.

During the Summit for New Risk Champions in St. Petersburg, Fla., Melanie Lockwood Herman of the Nonprofit Risk Management Center emphasized the importance of anti-risk controls. She added that the presence of such controls correlates with significant decreases in cost and duration of occupational fraud schemes.

Herman offered 16 anti-fraud measures and said that organizations that implemented any of them experienced considerably lower losses and time-to-detection spans. The measures are:

• Rewards for whistleblowers;
• Job rotation/mandatory vacation;
• Surprise audits;
• Formal fraud risk assessments;
• An anti-fraud policy;
• Fraud training for employees;
• Fraud training for managers and executives;
• A hotline;
• Employee support programs;
• An independent audit committee;
• Management review;
• An external audit of internal controls over financial reporting (ICOFR);
• Internal audits;
• Management of certification of financial statements;
• Code of conduct; and,
• External audit of financial statements.