Back in the days when life was simple, so was occupational fraud, which means an employee defrauding an employer or using the employer to commit some kind of fraud.
Gone are those days, according to Melanie Lockwood Herman of the Nonprofit Risk Management Center, speaking during the Summit for New Risk Champions in St. Petersburg, Fla.
Herman said it is imperative for nonprofit leaders to understand the various kinds of schemes people will use when committing fraud. They generally come under three main headings: cash fraud schemes, accounts receivable schemes and inventory and other asset schemes. Here’s a closer look:
Herman also warned of fraud by vendors. This includes: Overbilling schemes, phony companies, collusion between vendors and employees, kickbacks, and illegal gratuities (that is, something of value given to an employee to reward a decision after it has been made).
As we celebrate our 36th year, NPT remains dedicated to supplying breaking news, in-depth reporting, and special issue coverage to help nonprofit executives run their organizations more effectively.