Nonprofits and Fraud Study: Are Leaders Too Complacent About the Risk?
When pressed, nonprofit leaders said that there are significant issues when it comes to preventing and identifying and instances of fraud. Many leaders -- 43% -- said the cost associated with facilitating fraud risk assessment represents a real challenge in that regard. And almost a third (32%) admitted that background checks only go so far in prevention, as many fraudsters are first-time offenders. Further, 37% of financial officers listed collusion as a top challenge to preventing fraud, compared with only 5% of other executives.
"We believe it's worthwhile for nonprofit executives to ask themselves if they are overlooking fraud risks. It's easy to do, because one often doesn't see fraud as a problem until it happens, and, importantly, most nonprofits are not taking the risk assessment steps that would reveal how potentially vulnerable they actually are," Mr. McNee said.